What is a Letter of Credit/Bond or Ceertificate of Deposit?

While a franchise company might require these, I am not aware of any State requirement.  The State requires certain licenses.

They are two different things.  A letter of credit is basically a commitment by a bank or other financial institution to pay an obligation when certain conditions are met.  Thus you may open up a letter of credit (by paying the bank) to cover payment for a shipment once the shipper presents the necessary proof of shipment to the bank.  It is more secure for the shipper because it doesn't have to worry that (a) there won't be enough money to pay; or (b) you will claim that  payment is not owed for some reason.  A certificate of deposit is a time bank account.  You deposit money for a specified time with a guaranteed rate of return, so you might open a 6 month CD paying 5% annually.  In 6 months, regardless of whether interest rates have gone up or down in the interim, you can withdraw your money plus  2.5% (5% annually for 6 months).  I haven't heard of this, but presumably you could assign a CD to someone with whom you do business, and they would be assured that they would be paid.