Illinois Franchisor Bond Guide
If you’ve been told you need a surety bond to sell your franchise in Illinois, you’re in the right place. This guide outlines the full bonding process and requirements.
Bond Overview
- Purpose: To protect potential buyers from insolvent or noncompliant franchisors
- Who Needs It: Franchisors without adequate finances to cover the expected liabilities
- Regulating Body: The Illinois Attorney General
- Required Coverage: $1,000–$250,000
- Premium Rate: 0.5–10% based on credit score
Learn all about the bond requirements and process in this guide.
What Is an Illinois Franchisor Bond?
An Illinois franchisor bond is a type of surety bond that guarantees a franchisor will uphold laws and contract agreements.
The Illinois Attorney General requires this bond as part of the licensing process for franchise owners without adequate finances to cover the expected liabilities
How Much Do Franchisor Bonds Cost in Illinois?
Illinois franchisor bonds cost a small percentage of the required bond amount, typically 0.5–10% based on credit score.
Exact rates vary based on personal credit score. Apply for your free quote now!
SuretyBonds.com offers the lowest available rates from our nationwide provider network with no added fees.
Who Needs a Franchisor Bond?
The Illinois Attorney General’s Administrator requires this bond for franchise sellers that do not demonstrate adequate financials to meet the franchise’s obligations.
A surety bond or escrow funds are required per the Administrator’s discretion to fulfill obligations as a protective measure for future franchisees.
How Do I Get My Bond?
SuretyBonds.com provides the fastest and easiest way to get an Illinois franchisor bond. Just follow these quick steps:
- Apply: Submit an online quote request form
- Quote: Receive your quote within one day
- Sign: Complete the indemnity agreement
- Buy: Purchase the bond online 24/7
We’ll mail you the bond via your preferred shipping method. Be sure to file the bond with the Illinois Attorney General as instructed.
If you have any questions, call our friendly surety experts at 1 (800) 308-4358 for assistance.
How Does an Illinois Franchisor Bond Work?
As with all surety bonds, a franchisor bond creates a legal contract between three parties:
- Principal: You, the franchise owner filing the bond
- Obligee: The Illinois Attorney General requiring the bond
- Surety: The provider issuing the bond
This holds you financially responsible for upholding all provisions of the Illinois Franchise Disclosure Act.
If you break the bond terms, harmed parties can file claims. The surety will pay valid claims up to the bond amount, but you are ultimately responsible for refunding the surety.
How Do I Renew My Bond?
This bond must remain active for a consecutive four-year term. Once the bond expires, you must repurchase the bond in order to maintain coverage.
