A Maryland Franchisor Surety Bond is a type of financial guarantee bond that is required by the Maryland Department of Labor, Licensing, and Regulation to protect franchisees from potential losses due to fraud or malfeasance by a franchisor. The bond guarantees that the franchisor will comply with all laws, regulations, and contractual obligations, and will not engage in any fraudulent activities. It also ensures that the franchisor will make all payments and perform all services as required by the franchise agreement. The Maryland Franchisor Surety Bond is typically required in the amount of $25,000 for each franchise location. There are two types of Maryland Franchisor Surety Bond: the Single Location Surety Bond and the Multi-Location Surety Bond. The Single Location Surety Bond covers a single franchise location and the Multi-Location Surety Bond covers multiple franchise locations. Both types of bonds provide assurance that the franchisor will abide by all laws and regulations and fulfill all contractual obligations.
Maryland Franchisor Surety Bond
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How to fill out Maryland Franchisor Surety Bond?
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States That Require FDD Registration or Filing California. Hawaii. Illinois. Indiana. Maryland. Michigan. Minnesota. New York.
The documents a franchisor must submit include: A Uniform Franchise Registration Application. A Franchisor's Costs and Source of Funds. A Uniform Franchise Consent to Service of Process. A Franchise Seller Disclosure Form. A Franchise Disclosure Document, with State Cover Page.
Maryland Franchise Registration and Disclosure Law The FDD with a state cover page. The Franchise Seller Disclosure Form. The Uniform Franchise Registration Application. Consent to Service of Process. The franchisor's costs and sources of funds. Copies of advertising and promotional materials. Consent of accountant.
Maryland is a franchise registration state and under the Maryland Franchise Registration and Disclosure Law franchisors must file and register their FDD before offering or selling a franchise in the state.
A surety bond is a contract between your business, a bond company, and the party requiring the bond. It shows your customers that your business has a solid financial history and a reputation for following through. If your company fails to follow through with its obligations, someone can make a claim against your bond.
Maryland requires a surety bond amount between $5,000 and $25,000, which can be obtained for a premium as low as $100 annually (based on a $5,000 liability).
Maryland's Business Opportunity Act requires that sellers must file a disclosure statement with the Securities Division before advertising or soliciting in Maryland. The seller also must provide a copy of the disclosure statement to the buyer at least 10 business days before an agreement is executed.
