Florida Business Opportunity Bonds Explained
If you want to become a business opportunity seller in Florida, the Department of Agriculture and Consumer Services might require your to furnish a surety bond first.
This license bond– called a business opportunity bond– guarantees that you will run your business in compliance with state laws. The bond is required for the protection of your clients and should not be confused with insurance for your business. More specifically, you must stay compliant with the Florida Sales of Business Opportunity Act, which refers to sections 559.80 through 559.815 of the Florida Statutes.
If you are found to be in violation of the law and a third party suffers losses as a result of your action, a claim can be made against you to provide compensation to the affected party.
Read on below for more detailed information about these bonds. You can also check out our page on Florida surety bonds for other bonding requirements in the state. If you still have questions, don’t hesitate to call us at (877)-514-5146.
Questions about Florida Business Opportunity Bond
Who needs to get bonded as a business opportunity seller?
Florida law defines business opportunity selling as “the sale or lease of any products, equipment, supplies, or services which are sold or leased to a purchaser, to enable the purchaser to start a business for which the purchaser is required to pay an initial fee or sum of money which exceeds $500 to the seller.”
If your activity is defined as business opportunity selling, then you will be required to provide a bond as part of the licensing process.
How much does a business opportunity seller bond cost in Florida?
The minimum required amount for these bonds is $50,000. This is the bond’s penal sum, or in other words, the maximum coverage of the bond. The principal of the bond can only be held liable for damages up to $50,000.
However, this is not the bond’s cost. To get bonded, Florida business opportunity sellers need only pay a fraction of the total amount, called a bond premium.
Bond premiums vary between 1% and 3% for applicants with a good credit score. Those with a lower credit score will see higher premiums but rarely anything above 10%. Find out more on our bad credit surety bonds page.
How do I apply for this bond?
All you need to do is to submit our online application. It asks for some basic information about your business and takes just a few minutes to complete.
Afterwards, one of our surety experts will give you a personalized free bond quote, guide you through the next steps and answer any questions you may have. Under normal circumstances, your bond will be shipped to you between 24 and 48 hours after submitting your paperwork and payment.
How are claims handled for these bonds?
If you are a business opportunity seller in Florida, you must know in detail all the laws that apply to your occupation, as this will help you stay out of claims.
As per the language of Section 559.809 of the Florida Statutes, some of the activities which are prohibited include:
- Misrepresenting the total investment required to start and run the business
- Not disclosing efforts to sell more businesses/franchises than there is a market for in a particular area
- Misrepresenting the number of products that can be sold through the franchise and the profit the owner can expect to make
- Failing to provide the buyer with a written contract
Be sure to check out the section of the law to make sure you are aware of all the prohibited actions. This way you will be able to protect your business from claims.
Anyone who has suffered losses due to your actions can bring an action against the bond. The court may order that you pay compensation up to the total bond amount. If you fail to, the surety is legally obliged to provide the compensation for you. However, the ultimate responsibility still lies with you, and you will have to reimburse the surety afterwards.