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Vodafone executives will next month meet MPs scrutinising the company’s treatment of scores of business owners running its stores.
The move follows claims reported by the Guardian last week of suicide and attempted suicide by people who had agreed deals to run outlets for the £18bn telecoms company. The report led to suggestions that the government might consider new laws to correct the power imbalance in franchise agreements.
A group of 62 former Vodafone franchisees brought a high court claim in 2024, alleging the company “unjustly enriched” itself in 2020 by slashing sales commissions.
The court papers alleged that Vodafone acted in “bad faith” by unilaterally cutting fees to its franchisees; imposed fines of thousands of pounds for seemingly minor administrative errors; and then cajoled them into taking out loans and government grants to keep their businesses afloat. The claimants said they were left with massive personal debts.
MPs representing constituents in the case – including former Conservative minister Sir John Hayes, Labour’s Luke Akehurst and Reform UK deputy leader Richard Tice – have been pressing the company to visit Westminster for months.
The parliamentarians are scheduled to discuss the escalating row with Vodafone on 21 January, in a meeting first reported by Sky News.
Vodafone said: “We have tried on multiple occasions to resolve this complex commercial dispute.
“We offered to make a significant payment which we believed would ensure no claimants had debts associated with their franchise. We remain open to further talks and are sorry if any franchisee had difficulty in operating their business.”
In September, Vodafone started offering financial settlements to a selection of former franchisees who are outside the group of legal claimants as it launched its fourth investigation into its franchising division.
The company has apologised to claimants who blamed pressure from the telecoms group for triggering suicidal thoughts. A survey of franchisees in September 2020 resulted in 78 out of 119 leaving overwhelmingly critical comments about the effects Vodafone’s actions had had on their mental health.
In response to the Guardian’s investigation, a Vodafone UK spokesperson said: “While we are sorry if any partners have had a difficult experience, we reject any suggestion that our franchisees were put under undue pressure.
“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.
“We encourage everyone to raise issues, and we will always seek to resolve them, and we remain open to further discussions with claimants to resolve the commercial dispute.”
The company said it “wholly rejected” any suggestion that it “knowingly or recklessly or negligently” put anybody involved with its franchise stores under unreasonable pressure.
