Key facts
- Vodafone settled a legal claim brought by 62 former franchisees.
- The franchisees alleged Vodafone unjustly enriched itself by up to £85 million.
- The claim was filed after franchisees incurred large personal debts due to reduced sales commissions and fines.
- The settlement concludes a 19-month legal dispute.
- The terms of the settlement are confidential and involve no admission of liability by Vodafone.
Vodafone has reached a settlement with 62 former franchisees who had accused the mobile phone group of unjustly enriching itself by up to £85 million. The small-business owners initiated a high court claim in 2024, alleging that Vodafone unilaterally slashed their sales commissions and imposed significant fines for minor administrative errors, leading them to accumulate substantial personal debts.
Some franchisees reported suffering extreme financial pressure, including suicidal thoughts, due to the company's actions. The court filings alleged Vodafone acted in bad faith, even referencing an internal executive's voicemail that acknowledged the harm caused by commission changes and stated franchisees had been "shanked." The Guardian previously reported that Vodafone had incentivized internal staff to increase penalties on franchisees, with one instance involving a £10,000 penalty for a mistake that cost Vodafone only £7.08.
Vodafone, valued at approximately £25 billion on the London Stock Exchange, consistently denied unjustly enriching itself, characterizing the claim as a commercial dispute. However, the company did issue an apology in December 2024 to franchisees who had difficult experiences. The settlement, which concludes a 19-month legal process, includes no admission of liability from Vodafone, and the specific terms remain confidential. The 62 claimants represent nearly 40% of Vodafone's total 167 franchisees.