Sub-Broker vs. Franchise: Choosing the Right Path for Your Stock Market Journey

Want to start a career in the Indian stock market but not sure which one to opt for – Sub broking or Franchise? This guide is for you!

This article will explore the key differences between a sub-broker and a franchise owner and provide you with valuable insights to confidently navigate your stock market journey!

Sub-broker vs. Franchise Owner 

Before taking a look at the differences, let us first understand what is a sub-broker and a franchise owner.

Sub-Broker – Sub-Brokers are qualified financial experts who work with stock brokers to assist investors in efficiently trading in stock markets. They are not directly registered with the Securities and Exchange Board of India (SEBI). They typically work under the authority of the stockbroker.

Previously, sub-brokers were required to register with SEBI, but the rules have been revised. Sub-brokers now need to become an authorised person and register themselves with a stock brokerage firm. 

An ‘Authorised Person’ is an individual appointed by a stock broker (including trading members) who grants access to the trading platform of a stock exchange. They act as an agent of the stockbroker. 

Franchise Owners – Franchise owners are the sub-brokers who work under the name and rules of a large brokerage firm by signing a franchise agreement. They leverage the brand name, support, and resources of the franchisor (brokerage firm) to run their business by paying specified fees.

It is important to note that the franchise does not require additional licensing from SEBI. They have to be registered as an authorized person to operate their business.  

Key Differences Between Sub-Broker And Franchise Owners

FactorsSub-BrokersFranchise Owner
Meaning Individuals who facilitate trading under a registered stockbrokerSub-brokers who operate a business under the name of a larger brokerage firm
Operating NameCan operate with their own nameRequired to operate with the brand name of the brokerage firm
RegistrationEarlier, has to be registered with SEBI. Now, required to become an ‘Authorised Person’Don’t require any SEBI Registration. Has to be registered as an ‘Authorised Person’ with any stock broker
RequirementsCan start without any prior experience as an independent entityHave specific requirements to employ sub-brokers 
TrainingDon’t require training to work in financial marketsProvides training to employed sub-brokers to understand the market
RevenueReceive a high percentage of brokerage or revenue shares The percentage of revenue or brokerage shares depends on various factors
RiskHigh risk associatedLow risk associated 
MarketingResponsible for their own marketing to attract clientsBenefits from the marketing efforts of the brokerage firm
Support Receive basic support from the registered brokerGets a comprehensive range of support from the franchisor

Factors to Consider While Making a Decision

The following factors can help you make an informed decision, whether to become a sub-broker or a franchise owner –

1. Experience – Evaluate your stock market experience and expertise level to determine whether you have the necessary skills required to function as a sub-broker or operate a franchise under the name of a large stockbroker. 

2. Financial Resources – Analyse your financial resources and ability to invest in a business. Estimate the capital you’ll require to operate a franchise, including the initial fees, operating costs, other expenses, and more. It can give you an idea if you are ready to be a franchise owner. 

3. Independence or Support – Check in your preferences whether you are comfortable working independently or want to leverage the support and structure provided by a franchisor. It can help you determine the business environment suitable for you. 

4. Brand Recognition – Access and compare the competitive advantage of working as a stockbroker with limited brand recognition and operating under an established brand name as a franchise owner. It will help you evaluate the strategies to build credibility in the marketplace.

5. Risk – Examine the risks and liabilities of each option. It will help you decide whether you are okay with taking on the risks of working independently as a sub-broker or you would be more comfortable sharing risks and getting security from your franchisor. 

6. Market Analysis – Make sure to conduct thorough market research and analysis to evaluate services in your target market, competition, potential client base, etc. It will help you determine specific market dynamics that favour one option over the other. 

Concluding Thoughts

Considering all the above-mentioned factors, you can make an informed decision about starting a career of your choice in the stock market. In both options, sub broking and franchise, it is crucial that you select a reliable stock broker, like Choice, for assistance. 

Choice is a reputed stock broker in India with more than 30 years of experience in assisting clients in the finance industry. Their team of professional experts provides valuable financial services and advice that aligns with your financial goals.

Get in touch with the experts at Choice and start navigating your stock market journey today!

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Hey, I'm Soniya Luthra (founder of, a Chartered Accountant and seasoned stock market expert with extensive experience in trading and fundamental analysis. As an active participant in the market, I'm passionate about using my expertise to provide clear, actionable insights and guidance, helping readers make informed financial decisions.

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