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    Sub Broker Franchise Cost

Sub Broker Franchise Cost

Sub Broker Franchise Cost
  • Published Date: January 04, 2021
  • Updated Date: January 29, 2025
  • By Team Choice

Becoming a successful entrepreneur, no matter what your niche, requires not just hard work and commitment but also a fair understanding of the field, business models, and skills. Becoming a sub broker in India by starting your own independent franchise is also a form of entrepreneurship, and therefore demands all of the above. However, one of the most crucial factors that can determine whether you can even start a business has to be capital requirements.

Starting a sub broker franchise, just like any other small or medium-sized enterprise, demands some capital investments right in the beginning, and some repetitive investments along the way. While starting your own sub broker franchise will certainly give you the freedom and satisfaction you were looking for, it is important to understand a sub broker franchise cost before starting, so that you do not find yourself knee-deep in waters later.

But first, let us look at some basics.


Who Is A Sub Broker?

The National Stock Exchange defines a sub broker as “any person who is not a Trading Member of a stock exchange but who acts on behalf of a Trading Member as an agent or otherwise for assisting investors in dealing in securities through such Trading Members.”

The trading members must enter into an agreement with all sub brokers involved, with the agreement clearly highlighting the rights and responsibilities of both parties in absolute detail. All sub brokers must have registered with SEBI before starting their operations.

It is common for people to get confused between the roles of brokers and sub brokers, considering both acts as intermediaries in investment trading. The truth is that sub brokers mediate between the broker and client, usually working for brokers, bringing in new clients for the brokerage firm, and helping in matters of investments and security dealings.

If you choose to work with a brokerage firm instead of starting your own franchise, you may end up with perks such as regular and increased incentives with improved performance, commissions from dealings, and the absence of as much pressure as involved in carrying out a solo business.

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How Much Does A Sub Broker Franchise Cost?

This is the most important question of concern when it comes to starting your own sub broker franchise as an entrepreneur. Money, after all, can turn out to be a deciding factor for every business even before it kickstarts. When starting and maintaining a sub broker franchise, there are several capital and working expenses that you would have to take care of, depending on how big a franchise you wish to establish and its location.


Capital Requirements For A Sub Broker Franchise

Talking about the capital requirements, the first step to establishing a sub broker franchise is to secure a broker to work with, for which you would have to make an initial deposit with them. Depending on the broker you choose sub broker registration fees in determined, this could cost you anything between INR 50,000 to INR 3,00,000, or even more. Margins may also be accepted as shared and fixed deposits, but the amount usually is substantial enough.

Apart from the initial deposit with the broker, you also need to take care of initial registration expenses. Though a one-time cost, this fee with the broker or exchange you have decided to work with would also cost you substantially around INR 15,000 to INR 25,000, or even more.

Considering that you will not be working alone, there are going to be other capital investments on computers, workstations, and other furniture for your office. With the advancement of technologies, there might also be some other devices you would have to invest in other than traditional workstations to make your franchise well-equipped, productive, and developed.


Working Expenses For A Sub Broker Franchise

When it comes to penning down how much would a sub broker franchise cost, it is also important to look at the various working expenses involved. Firstly, in this digital age, life or work without the internet is nearly impossible. Therefore, you would have to spend some amount monthly towards high-speed internet reduction, for which costs have reduced substantially over the years.

Secondly, depending on the size and location of your office, you would have to offer monthly rent for your office space. Even though a sub broker franchise does not require a huge office, the location can turn out to be of prime concern. You do not want your sub broker franchise to be tucked away in the corner of the city, where it would be difficult to mobilize brokers and clients. To be able to have your office situated at a prime, central location in the city, you must be ready to indulge in hefty monthly expenses.

Depending on how many employees you hire, their skills, and the city you are establishing your business in, the monthly salary you offer to your employees is also variable. Remember that a sub broker franchise also requires employees for various functions, including sales, analysts, dealing, back office, office peon, receptionists, security guards, and so on. The salary you offer will also depend on other factors like comparisons with other sub-broker franchises, the experience, repute, and profits of your company, and so on.

Lastly, opening a sub broker franchise would entail costs of various utility bills and miscellaneous expenses, including telephone and electricity bills, water bills in certain cities, maintenance, and repair charges from time to time, costs involved in the installation of security cameras, and so on. All such monthly expenses might seem insignificant at first, but certainly, add up to an impressive bill every month.


Sub Broker Franchise or a Sub Broker at a Stock Broking firm?

Starting a sub broker franchise has its own benefits, but also brings with it the huge burden of capital and working expenses to be dealt with. This is the reason more and more individuals are choosing, instead, to take up the role of a sub broker at a stock brokerage firm.

The perks? Well, you might miss out on calling yourself an entrepreneur, but there are no working expenses to deal with, capital requirements such as initial deposit with a broker are also reduced considerably if you choose the right brokerage firm, you get paid incentives over and above your regular sub broker commission for your excellent performance and increasing cash flows, besides the opportunity of earning more per trade if you are bringing in bigger numbers for your brokerage firm.

Becoming a sub broker has a wide range of benefits at a much lower cost if you choose to work with a stock brokerage firm like Choice. You can explore and expand your knowledge base and transform it into wealth when sharing it with your clients, who seek your help on investments as diverse as equities, commodities, currency, mutual funds, PMS, and so on. Join hands with Choice today and give a new direction to your career. Get in touch with us now!

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