Zerodha Franchise comes from Zerodha, a discount Broking House in India that is growing at an accelerated pace. It started in the year 2010 and has its headquarters in Bangalore. The company is known to provide its customers with a reasonable quality of trading products and services.
The Authorised Person Program from Zerodha in the stockbroking sector has been in the market for the last 9 years and ensures its clients get the lowest brokerage charges. It has created a significant impression in the Stockbroking industry so far.
The clients and business partners of Zerodha can avail of its trading services in a number of segments. On the basis of its active client base, it is at the top position among the Indian stockbrokers.
Zerodha Franchise Partnership Models:
There are two franchise models which Zerodha offers its customers willing to begin a business with them. Depending on the requirement and capacity, the businessmen can choose one of these. The models are enumerated in the following section:
Zerodha Remisier partnership model
In the year 2015, Zerodha Franchise launched this partnership model and has been able to add around 1000 business partners to its network. If you are willing to get yourself enrolled in this program, then you can do it by making a payment of ₹1500 which is the enrollment fee.
The most lucrative part of this business model is that you are saved from making any investments regarding the office set-up.
The primary role you need to carry out is to acquire new clients who will join the Zerodha network and start trading with it. For this, you will be enjoying some revenue sharing from the total earned profit.
Depending on the clients’ performance, the slabs of revenue they generate, the profit or commission sharing will be done and therefore it is not fixed.
Client to a Client partnership model
If you want to opt for this model, then you don’t have to pay any extra fees.
It is a simple business model that enables the clients of the company to earn some amount through the method of referral because of which is also termed as a “Refer and Earn” model. In this, the existing clients just need to refer their near and dear ones, which will provide them with a revenue sharing of 10%.
Zerodha Franchise Services:
Once you become a part of the Zerodha Franchise as a customer or even as a business partner, you will be able to avail a variety of services.
It will provide you with various segments in which you can make an investment as well as start trading. This includes currency, mutual funds, derivatives, equity, government securities, commodities, and IPO.
Zerodha Franchise Initial Cost
When you opt for any of the business models of any stockbroker, generally you need to have an initial investment. The sub-broker franchise cost for each model as prescribed by the discount broking house is explained in the following section:
Zerodha Remisier or Partner model:
In this model, it is necessary to open a Demat account as well as a trading account with the discount broking company by paying a sub-broker registration fee of ₹1,500 which is one time only. After completing this, you will become Zerodha’s trading partner.
You do not have to set up your own office for operating, as you can work from the office of the main broker or even from the comfort of your home.
This saves you from a major infrastructure set-up cost.
Client to Client model:
In this case, all you have to do is to go for mouth to mouth publicity, which will help you add more clients to the company base.
Thus, this model doesn’t require you to make any investment.
For more information, check this detailed review on Zerodha Sub Broker Franchise Cost and How to Become a Sub Broker in Zerodha?.
Zerodha Franchise Revenue Sharing
In general, the revenue sharing ratio depends on various slabs of the total amount of revenue that the clients generate. Here are the details regarding each model of Zerodha Franchise:
Remisier or partner model:
In this model, the commission or the revenue sharing is completely dependent on the amount of brokerage which the sub-brokers clients generate.
In short, if your Zerodha Franchise clients make more brokerage, then only you can earn a higher share or else you will be earning a lower share.
The slabs of revenue sharing have been enlisted below:
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- Being a partner, you are entitled to a revenue share of 20% if the clients of a sub-broker generate a brokerage that is below ₹1 lakhs. In such a scenario, the rest 80% of the revenue is shared by Zerodha.
- As a partner, you will get a revenue share of 30% and Zerodha will get 70% when the brokerage generated by the clients of sub-brokers lies in the range of ₹1 lakhs and ₹3 lakhs.
- You will be earning a revenue share of 40% and Zerodha will get the rest of 60% of revenue when the brokerage generated by your clients are in the range of ₹3 lakhs to ₹5 lakhs.
- The final slab divides the revenue between you and Zerodha equally, i.e in the ratio 50:50 and this is possible when the amount of the brokerage your clients generate reaches beyond ₹5 lakhs.[/su_list]
Client to Client model:
Since the effort and the responsibility in this partnership model is the least, you can expect a similar kind of revenue sharing.
Here, the revenue share which the partner gets is only 10% and Zerodha gets the rest 90%.
Zerodha Franchise Benefits:
Here are the advantages which you will get by enrolling yourself in Zerodha Franchise:
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- With Zerodha Varsity, the company provides its partners and clients with knowledge regarding investment and trading, free of cost.
- Despite being in the financial market for less than a decade, the company has a fairly good presence in more than 75 cities in India.
- Since Zerodha Franchise is a discount broker, you can easily get new clients as a business partner and thus earn profits from their brokerage.
- You will get the advantage of a 3 in 1 Demat account in connection with the IDFC bank.
- You will have access to different trading platforms which are quite innovative in nature. It includes a web application, mobile app as well as terminal software.
- The customer acquisition process is fast enough to save the new ones from a long waiting time. This leads to the creation of happy and satisfied customers.
- The back end support system of Zerodha is quite outstanding that ensures the ease or getting all the details regarding the clients as well as the brokerage reports.
- With Zerodha, you do not need to have a minimum balance to start trading.
- The process and sharing ratio of the brokerage is transparent enough to instil confidence and trust in the minds of its customers.[/su_list]
Zerodha Franchise Model Pros and Cons:
Now, coming to the advantages which you can avail for each business model of Zerodha Franchise:
Partner or Remisier model Benefits:
- A security deposit is not needed to become a partner.
- Expense is not needed for setting up the office or infrastructure.
- The revenue sharing is flexible depending on the brokerage generated.
Partner or Remisier model Drawbacks:
The only drawback of the Remisier model is that a maximum revenue of 50% can only be earned by a partner.
Client to client model Benefits:
- You need to put the least effort into this model.
- There is no need to deposit any security amount.
Client to client model Drawbacks:
In this model, your chances to learn is quite limited.
Zerodha Franchise Eligibility Criteria:
There are no explicit eligibility criteria to be a part of the business partner program or the authorised person program of Zerodha.
But, you need to fulfil some basic checks regarding your eligibility, before opting for any of them. These are in accordance with the Stock Exchanges of India as well as SEBI. These are enlisted below:
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- You need to be at least 18 years or more in order to successfully get membership as a sub-broker in Zerodha.
- Registration with the SEBI is mandatory to become a sub-broker.
- If you have a minimum experience of 3 years in the financial services industry, then this makes you a preferable candidate over others.
- If you are a candidate with a graduation degree or some equivalent qualification in relation to the financial industry, then it makes you a suitable candidate, though this is not compulsory. Zerodha provides enough knowledge through its varsity to educate all its candidates irrespective of their educational qualification.[/su_list]
Zerodha Franchise offers:
Here is the list of offers that you can generally avail from Zerodha while enrolling yourself as to its sub-broker:
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- You can provide your clients or business partners with a number of services that are available to you.
- No initial investment is needed to begin a partnership with the Zerodha broker.
- As per their capability, the business partners can get flexible revenue sharing.
- In order to keep a record of the brokerage as well as the trading history of the clients, efficient back-office software is used.
- A wide variety of trading platforms are offered to the clients for trading as per their choice and convenience.[/su_list]
Zerodha Franchise FAQs:
The discount broking concept was introduced first in India by Zerodha. If you intend to begin a partnership business in the broking business without making any investment in the initial period, then you should definitely opt for Zerodha Franchise.
Certain common questions arise in the minds of the people while doing so. We have answered such frequently asked questions in the following section to make things easier for you:
In order to set up my Zerodha Franchise, what cost do I need to incur?
A one-time registration cost of ₹1500 is needed for enrolling yourself as a Zerodha Franchise. Though it is not needed to set up your own office, as you can do this from your home or the sub-brokers office, still, if you intend to set up one, be prepared to spend a little more. In this case, depending on the total area of the office and other internal furnishings which you are opting for, the final cost will be decided.
For setting up a Zerodha Franchise, what are the documents which you need to submit?
In order to successfully carry out the onboarding process certain documents have to be provided, which are enlisted below:
- A valid proof of your address.
- Certificates showing your educational qualification
- A reference letter that has been attested by CA.
- Adhar Card
- PAN card
- Photographs of passport size
- A bank statement or even a cancelled cheque. can be provided for your bank account details.
How does Zerodha function as a discount broker in the financial market of India?
Zerodha, being fairly new in the market with its presence even less than a decade, has a good offline presence.
Such branches of the company strive to resolve the basic issues and add new customers to the company’s existing network. Its corporate team of brokers are themselves responsible for providing the services to the clients.
What is the time duration for which I need to wait in order to activate my Zerodha Franchise?
All the necessary formalities needed to get started with Zerodha Franchise are completed in a period of 2 or 3 days. In some cases, when there are certain issues with the documents provided by you or some specific document is missing, then a little longer time may be consumed for the process completion.
Does Zerodha offer a competitive revenue sharing percentage with respect to the other stockbrokers in the same financial niche?
Yes, Zerodha offers a competitive revenue sharing percentage compared to other players in the sector. But the actual revenue share which you will get depends on the brokerage generated. It can be a maximum of 50% but in the case of other full-service stockbrokers, the revenue sharing percentage can be as high as 80%.
At the same time, you must not forget that in those cases, the partner has a lot of responsibilities besides ensuring business leads, such as putting efforts in acquiring new clients as well as providing them with the best services.
In case you are looking to open a Zerodha Franchise or become a sub-broker, let us assist you in taking the next steps forward.
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