Franklin Pawnbroker Bond: A Comprehensive Guide

This guide provides information for insurance agents to help their customers obtain a Franklin Pawnbroker bond.

At a Glance:

• Average Cost: $100 per year or $10 per month
• Bond Amount: $5,000
• Who Needs it: All pawnbrokers operating in Franklin, North Carolina
• Purpose: To protect the public from financial harm if the pawnbroker violates the terms of their license
• Who Regulates Pawnbroker in Franklin: The Town of Franklin

Background

Franklin Code of Ordinances 110.30 requires all pawnbrokers operating in the town to obtain a license, also known as a business license registration, from the Town of Franklin. The Franklin Town Council enacted the licensing requirement to ensure that pawnbrokers engage in ethical business practices. To provide financial security for the enforcement of the licensing law, pawnbrokers must purchase and maintain a $5,000 surety bond to be eligible for licensure.

Additionally, North Carolina Statute 66-399 mandates that all pawnbrokers operating in the state file a bond with their local municipal authority before conducting business.

What is the Purpose of the Franklin Pawnbroker Bond?

Franklin requires pawnbrokers to purchase a surety bond as part of the application process to obtain a business license. The bond ensures that the public will receive compensation for financial harm if the broker fails to comply with the regulations set forth in Franklin Code of Ordinances 110.31 and North Carolina Statute 66-399. Specifically, the bond protects the public in the event the broker commits any acts of fraud or breaches consumer contracts. In short, the bond is a type of insurance that protects the public if the pawnbroker breaks licensing law.

How Can an Insurance Agent Obtain a Franklin Pawnbroker Surety Bond?

BondExchange makes obtaining a Franklin Pawnbroker bond easy. Simply log in to your account and use our keyword search to find the “Pawnbroker” bond in our database. Don’t have a login? Gain access now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone at (800) 438-1162, email, or chat from 7:30 AM to 7:00 PM EST to assist you.

At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.

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Is a Credit Check Required for the Franklin Pawnbroker Bond?

No, a credit check is not required for the Franklin Pawnbroker bond. Because the bond is considered relatively low risk, the same low rate is offered to all pawnbrokers in the city regardless of their credit history.

How Much Does the Franklin Pawnbroker Bond Cost?

The Franklin Pawnbroker bond costs just $100 per year or $10 per month.

Who is Required to Purchase the Bond?

Franklin requires pawnbrokers to purchase a surety bond as a prerequisite to obtaining a business license. To paraphrase Franklin Code of Ordinances 110.01, a pawnbroker is a person who issues loans at interest to individuals that leave their property, as collateral, for the broker to sell or purchases goods for resale from a dealer/trader.

Exemptions to this definition include:

• Antique dealers
• Auction house businesses
• Goods purchased or sold on consignment
• Property owned by the NC DMV
• Garage sales, yard sales, or estate sales
• Trade shows, conventions, flea markets, or swap meets

BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.

How do Pawnbrokers Apply for a License in Franklin?

Pawnbrokers in Franklin must navigate several steps to secure a business license. Below are the general guidelines, but applicants should refer to the licensing statutes for details on the process.

License Period – All Franklin Pawnbroker Licenses expire on September 1 of each year and must be renewed before the expiration date

Step 1 – Purchase a Surety Bond

Pawnbrokers must purchase and maintain a $5,000 surety bond

Step 2 – Contact the Town of Franklin

To apply for a pawnbroker license, applicants should contact the Town of Franklin at (828) 524-2516. The department will walk the broker through the application process, provided them with all required forms, and answer any questions they may have.

Pawnbrokers are required to pay a $10 registration fee and submit the following items with their license application:

• • Statement indicating the net assets or capital the broker will put towards the business as well as an unaudited statement from an accountant or CPA verifying the information
  • Affidavit by the broker stating they have never been convicted of a felony as well as a certificate from the town’s police department verifying this information

How do Franklin Pawnbrokers Renew Their Licenses?

Prior to the license expiration date, the town will contact the broker with instructions on how to complete the renewal process. All Franklin Pawnbroker Licenses expire on September 1 of each year and must be renewed before the expiration date.

What are the Insurance Requirements for the Franklin Pawnbrokers?

Franklin does not require pawnbrokers to purchase any form of liability insurance. Pawnbrokers must purchase and maintain a $5,000 surety bond.

How Do Franklin Pawnbrokers File Their Bonds?

Pawnbrokers should submit their completed bond forms, including the power of attorney, to the Town of Franklin at the following address:

P.O. Box 1479
Franklin, NC 28744

The surety bond requires signatures from both the surety company that issues the bond and from the broker. The surety company should include the following information on the bond form:

• Legal name of the entity/individual(s) buying the bond
• Surety company’s name and state of incorporation
• Name of the obligee and the license type applied for
• Bond amount
• Date the bond goes into effect
• Date the bond is signed

What Can Franklin Pawnbrokers do to Avoid Claims Against Their Bonds?

To avoid claims against their bonds, pawnbrokers in Franklin must ensure that they:

• Do not engage in any acts of fraud
• Do not breach contracts made with consumers

What Other Insurance Products Can Agents Offer Pawnbrokers in Franklin?

Franklin does not require pawnbrokers to purchase liability insurance. However, most reputable businesses will purchase this insurance anyway. Bonds are our only business at BondExchange, so we do not issue any other types of insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.

How Can Insurance Agents Prospect for Franklin Pawnbroker Customers?

Franklin unfortunately does not provide a public database of active pawnbrokers in the town. We suggest contacting the Town of Franklin for this information. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.