Sub broker offers extensive services serving as an intermediary between a stockbroker and client. They help procure clients for a broking company and offer various investment solutions on behalf of the brokerage company. Moreover, a sub broker can set up a sub broker franchise from scratch. It is a small or medium-sized enterprise that requires proper planning and investment.
Through establishing a separate business entity, sub brokers can offer access to various tools, investment solutions, and other services that can benefit the investors. Serving as a bridge between the brokerage company and the ultimate investors, a dedicated sub broker franchise is the best decision an individual can make to become a part of the stock market investment process.
Benefits of Starting a Sub Broker Franchise
Following are certain benefits which sub brokers receive from starting a sub broker franchise:
- Low investment
Sub broker franchise requires an investment in terms of registration, daily working capital, and various other expenses. However, the expenses are low compared to a full-fledged brokerage firm. With limited investment as compared to a brokerage firm, the sub broker franchise is known for low overhead costs and other expenses.
- Support from the brokerage firm
A sub broker receives support from a full-fledged brokerage firm in terms of tools, platform, investment, and reputation. With strong support and access to resources, the sub brokerage firm can offer extensive services to its clients and in turn, helps the brokerage firm as well.
- Extensive earnings
Starting a sub brokerage franchise can help the sub brokers greatly enhance their earning potential. Instead of working under a brokerage firm, a sub brokerage franchise helps sub brokers earn profits from their business and various perks and even commissions from the brokerage firm.
Sub Broker Franchise Cost
Apart from various benefits, a sub broker must also consider the sub broker franchise cost which includes expenses related to registration, working capital, and other fees and expenses. A broker must incur various expenses for setting up a sub broker franchise which have been listed below:
- Franchise fee
An initial franchise cost must be paid by Individuals who wish to start a sub brokerage franchise. This ranges between ₹50,000 to 3,00,000. Despite being a one-time expense, franchise fee payment can prove to be a huge burden for a sub broker.
- Security deposit
A security deposit ranging between ₹50,000 to 5,00,00 must also be paid to the brokerage firm to start a sub broker franchise.
- Infrastructure cost
Being a business, a proper sub broker franchise requires the setup of a full-fledged office with chairs, benches, tables, and even computers. A sub broker has to locate a full-fledged office, pay rental and electricity expenses, and even get hands-on computers and a stable internet connection for starting and keeping a sub broker franchise running.
- Employee expenses
A sub broker must hire various employees and pay various employee expenses like salaries, bonuses, and even commissions.
Apart from all the expenses mentioned above, a sub broker must even share revenue with a partner brokerage firm depending upon the terms of their contract. Despite being a profitable business, complete consideration of all the expenses and costs associated with starting a sub broker franchise and analysis is essential.
