Vodafone was alerted by its franchisees four years ago that commission reductions were significantly affecting their mental health, well before numerous small business owners initiated a £120 million High Court lawsuit against the company.
In a 2020 survey conducted shortly after Vodafone reduced the fees paid to franchisees for selling its products and services, participants reported experiencing stress, anxiety, and depression. This reduction followed months of uncertainty due to the Covid pandemic.
Franchisees rated the company just 1.75 out of 5 for trustworthiness and 1.67 out of 5 for feeling valued as business partners. Many expressed fears of losing their livelihoods, homes, and savings. One respondent noted: “My mental health has become very poor as I am suffering from anxiety and spells of depression.” Another stated: “I am ill from stress and it has affected my home life.”
In December last year, 62 franchisees, representing nearly 40% of Vodafone’s total franchise network, filed a High Court claim alleging that the company “unjustly enriched” itself by cutting commissions. The claim seeks up to £120 million in damages.
Some franchisees have since reported that the pressure they faced led to suicidal thoughts. MPs have compared aspects of this dispute to the Post Office Horizon IT scandal, underscoring the scale of the alleged mistreatment of small business owners.
Vodafone expressed regret over any franchisee having a difficult experience. A spokesperson added: “At Vodafone UK we encourage anyone to raise issues in the knowledge they will be taken seriously, and we always seek to resolve any issues raised. We continue to run a successful franchise operation, and many of our existing franchisees have expanded their business with us by taking on additional stores.”
The telecoms company has initiated its fourth investigation into historical conduct within its franchising division. It has also stated that it “strongly refutes” the allegations in the High Court claim, describing the case as a commercial dispute it intends to defend.
