Financial Assurance Obligations

This infographic illustrates the financial assurance obligations for franchisors and franchisees when launching a new location. Franchise.Law created this infographic to help visually show the differences and similarities between each type of financial assurance obligation. Deferral and Escrow have similarities in the order of steps for a franchisor to collect their fees where the franchisor has to perform its pre-opening duties first. Posting a surety bond and a performance guaranty are similar in that they allow for a franchisor to collect their fees upfront, but these options come with other stipulations that can make these options less desirable. To learn more about financial assurance obligations, please visit our website for more information.