A360
Key Takeaways✦ Atlas AI
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62 franchisees sue Vodafone.
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Allegations of arbitrary business changes.
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Claims of reduced commissions, new fines.
Atlas AI
Sixty-two former Vodafone franchisees in the UK are pursuing legal action against the telecoms group, alleging that changes to its franchise programme caused significant financial losses and contributed to mental health problems.
Among the claimants are Donna Watton and Rachael Beddow Davison, from Lincolnshire. The group alleges Vodafone made business decisions in “irrational” and “arbitrary” ways that damaged franchisees’ profitability and operations.
Alleged changes to franchise terms
The claim focuses on changes made in 2020, including a reduction in commission paid on phone upgrades and the introduction of a fines-and-penalties system.
Franchisees say commission on upgrades was reduced by about 40%. They also argue the penalty system imposed disproportionate charges.
Dispute over new-store support
Some franchisees also claim Vodafone encouraged them to open additional stores with no established customer base, and that they were given assurances of financial support that were not ultimately provided.
Vodafone response
Vodafone, which operates more than 350 franchise stores in the UK, said it has reviewed and improved its franchise programme over the past two years.
The company said it has attempted to resolve the dispute, including by offering a settlement that was rejected by the franchisees. Vodafone also maintains that changes to commission structures were lawful, and that some franchise agreements ended when contracts concluded.
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