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Understanding the difference between sub-broker and franchise is important before you consider starting a business in the stock market. Both models allow you to work with a registered stockbroker and help investors to trade in different forms of stocks.
From ownership and branding to responsibilities and support, both paths have their own experience. To get you through this, this guide explains to you what they are, how they work and which one is better for your goals.
The sub-broker definition refers to someone who works under a registered stockbroker to assist investors in trading and investing. The role of a sub-broker is to serve as the intermediary between the broker and the client, but they do not have direct access to trade in the stock exchanges. Instead, they handle routine tasks such as account opening, client serving and trade execution.
Sub-brokers mostly have their own team, conduct their business without any interference, and receive commission depending on the amount of business they bring. They are free to construct their brand, but it should be aligned with the broker’s operational guidelines of brokerage firms.
In the stock market partnerships, the franchise definition (stockbroking) is described for businesses and people who are authorised by a stockbroker to act on their behalf. This model is also called the Authorised Partner or Person. A franchise partner represents the broker’s brand and uses its platform, tools, and systems to provide investing services to clients.
Franchise operates as an extension of the broker’s office, and they often receive training, marketing materials and operational support. In return, the franchise earns a percentage of the revenue from clients, sharing profits with the broker.
There are several differences in how both model works. The comparison of sub-broker vs franchise is useful in understanding the practical aspects of running stock market-related businesses.
Here is a table presented to list key differences.
| Feature | Sub-Broker | Franchise (Authorised Person) |
| Registration | With SEBI | With the stockbroker |
| Brand Use | Uses own brand | Uses the broker’s brand |
| Platform & Tools | Basic access | Full access is provided by the broker |
| Support | Limited or self-managed | Marketing and training support |
| Revenue Model | Commission-based | Revenue-sharing |
| Setup Cost | Generally lower | Slightly higher |
| Control Over Clients | Full control | Joint operations with the broker |
| Business Flexibility | More flexibility | More structured approach |
The main difference among them is the extent of branding and support. In essence, franchises function like broker-owned branches. Meanwhile, sub-brokers operate with more accessibility, but they have limited resources.
Knowing the difference between franchise and sub-broker makes it easier for you to decide what aligns with your long-term plans. Choosing between the two models depends on your work style and business goals. For instance, if you want to run your own setup with a limited team members and fewer rules, then becoming a sub-broker is suitable for you.
However, if you wish to work under an established brand and want access to better financial tools, training and marketing help, then a franchise model is a feasible option. Your choice also depends on your experience in the stock market, investment budget and initial client base.
Among franchise vs sub-broker, both models have great potential, but your success depends on which aligns with your business preference. Sub-brokers have higher accessibility to run their operations with less infrastructure support, while a franchise comes with a structured approach from a well-established firm. The right choice will always depend on how much control, branding and guidance you prefer in your stock market journey.
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Many times, sub-brokers need to be registered with SEBI and franchisees complete their registration with the broker. Always make sure to keep updated about the registration process of these models for a seamless transition.
No, the franchise partners will have to use the stockbroker’s official brand identity. Any materials that deal with the clients, such as office boards and digital platforms, adhere to the brand of the broker.
A sub-broker earns through client-based trade commissions, calculated on turnover or brokerage slabs. Such earnings are not fixed, but with large-scale traders, a sub-broker can create a significant increase in their monthly earnings.
Yes, many brokers provide training for the platform, compliance and servicing clients. This training normally takes place via the internet or at the regional office of the broker.
The sub-broker model can be activated within 7-14 working days, whereas franchises may take 3 weeks. This duration also depends on brand examination, integration of systems, and sanctioning of the location by the broker.
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to 1 Lakh* per Month!
