A collective of Vodafone franchisees throughout the º£½ÇÊÓƵ have initiated a multi-million-pound lawsuit against the telecommunications behemoth, citing "bad faith" in business dealings.
The legal claim, exceeding £120 million, was lodged at the Commercial Court of the High Court by IBB Law on behalf of 61 current and former Vodafone franchisees, as reported by .
The franchisees are accusing Vodafone of violating their duty of good faith and the stipulations of the Franchise Agreement, alleging that since July 2020, Vodafone has enforced unreasonable and capricious business decisions upon them.
It has been noted that Vodafone recently withdrew from the British Franchise Association, an organisation dedicated to ethical franchising standards within the º£½ÇÊÓƵ.
Claims against Vodafone
The case against Vodafone includes several charges, among them is the accusation that franchisees were enticed into the programme with promises of unlimited earning potential, yet frequently faced commission structures that rendered their outlets unprofitable.
Furthermore, the claimants argue that Vodafone unjustly profited from government-provided business rate relief during the Covid pandemic, funds that were meant to support the franchisees in times of economic hardship.
One franchisee, Andrew Kerr from Northern Ireland, shared his experience: "It started off as a dream – and it’s ended up as a nightmare that haunts me every day. I felt I became Vodafone’s piggy bank. They pushed me to the point of financial ruin, and then took away my stores leaving me in crippling debt."
A collective of franchisees independently sought legal guidance in October 2022 before forming a group, which has since initiated a legal claim through IBB Law. In response to these accusations, Vodafone has issued a denial.
The telecommunications giant's choice for legal representation remains undisclosed.
A spokesperson from Vodafone commented on the matter: "We are aware of the allegations and take them very seriously, and we are sorry to any franchisee who has had a difficult experience. While we have acknowledged challenges were faced by some franchisees, we strongly refute claims that Vodafone has ‘unjustly enriched’ itself at the expense of small businesses."
"Our franchise model is a commercial relationship. We offer our franchise partners a large amount of cost-free support, but, as with any business, commercial success is not guaranteed. The majority of franchise partners are profitable and there is strong demand among our current franchisees to take on new stores".
"We maintain that where issues have been raised, we have sought to rectify these and believe we have treated our franchisees fairly," they concluded.
The background to this dispute includes the recent completion of a £16.5 billion merger between Vodafone and Three, which regulators approved last week.
