North Dakota — Franchisor Bond
Prepare North Dakota franchisor security from the franchise fee and the number of franchises expected to be sold in the State, subject to the published $25,000 minimum. The Department's financial-assurance direction determines whether to use a bond or another accepted arrangement.
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- Recorded state
- North Dakota
- Bond type
- Business Opportunity / Franchise Bond
- Category
- Business operations & taxes
What this bond does
Assure the franchisor's financial capability to provide the goods, services and other items promised for establishing and opening franchise businesses, with the published bond also securing covered legal compliance and damages.
- Who needs it
- The legal franchisor responding to North Dakota registration review and financial-assurance conditions. Match its franchise offering and agreements, rather than a franchisee's operating permit.
- Who it protects
- The published model names the administrator as obligee and contemplates assignment to franchise purchasers on sale. Its condition includes franchise-law compliance, payment of damages for covered violations or misrepresentations, and completion of promised offering obligations. Use the actual accepted undertaking for the named parties and assignment.
Your bond option
This is the option on record for this bond.
- Bond optionPurchase Now (opens in a new tab)Continue to our secure checkout partner, Propeller (opens in a new tab).
The bond amount describes the limit of the bond obligation, not the price. A listed amount does not establish what the requesting party requires. The premium is what you pay and must be confirmed for the actual option. An E&O limit, where listed, is separate errors and omissions insurance.
Sources
Have these ready
- Collect the actual financial-assurance direction and franchise registration application.
- Prepare the franchise fee and expected North Dakota sales count for the required calculation.
- Match the legal franchisor, agreements, administrator and purchaser-assignment provisions.
- Confirm the accepted registration-effective and bond-coverage dates.
- Identify the assurance choice in the NASAA EFD filing cover letter and franchisee disclosure.
Questions about this bond
Must every franchisor choose a bond?
The packet addresses financial capability after review of the franchisor's statements and initial obligations. It describes escrow, a qualifying parent guarantee, a bond and fee deferral as alternatives. Follow the actual accepted financial-assurance direction.
When can deferred initial franchise fees be collected?
The packet's deferral alternative requires both fulfillment of all initial obligations owed under the agreement or other documents and the franchisee's commencement of business. Scheduling training alone does not satisfy that condition; use the accepted arrangement.
What follows Purchase Now?
Propeller's North Dakota franchisor application opens in a new tab. Match the franchisor, actual financial-assurance direction, fee-and-sales calculation, accepted model and registration-based dates before finalizing. Execute and submit the bond with the actual registration filing and assurance disclosures; provider issuance does not approve the State application.