Minnesota Franchisor Bond Guide
If you’ve been told you need a surety bond to sell your franchise in Minnesota, 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 Minnesota Department of Commerce, Securities Section
- Required Coverage: $1,000–$100,000
- Premium Rate: 1–10% based on credit score
Learn all about the bond requirements and process in this guide.
What Is a Minnesota Franchisor Bond?
A Minnesota franchisor bond is a type of surety bond that guarantees a franchisor will uphold laws and contract agreements.
The Minnesota Department of Commerce, Securities Section 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 Minnesota?
Minnesota franchisor bonds cost a small percentage of the bond amount, typically 1–10% 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 commissioner of the Minnesota Department of Commerce, Securities Section may require this surety bond from a franchise seller in lieu of an impoundment.
Your bond amount will be based on the value and number of franchises to be sold and total financial liability.
How Do I Get My Bond?
SuretyBonds.com provides the fastest and easiest way to get a Minnesota 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 email you the bond shortly after purchase. Be sure to file the bond with the Minnesota Department of Commerce, Securities Section as instructed.
If you have any questions, call our friendly surety experts at 1 (800) 308-4358 for assistance.
How Does a Minnesota 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 Minnesota Department of Commerce, Securities Section requiring the bond
- Surety: The provider issuing the bond
This holds you financially responsible for upholding the contract terms and all provisions of Minnesota Administrative Rules 2860.1900.
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?
These bonds expire annually. To renew your franchisor bond, simply pay your renewal invoice when prompted.
We’ll begin contacting you by phone and email 90 days before the expiration date.
