Vodafone was warned by its franchisees four years ago that commission cuts were having a “massive impact” on their mental health, long before dozens of small business owners launched a £120 million High Court case against the company.
In a 2020 survey conducted weeks after Vodafone reduced fees paid to franchisees for selling its products and services, participants reported suffering stress, anxiety and depression. The cut followed months of uncertainty caused by the Covid pandemic.
Franchisees scored the company just 1.75 out of 5 on whether they trusted Vodafone’s word, and 1.67 out of 5 on whether they felt valued as business partners. Many said the changes had left them fearful of losing their livelihoods, homes and savings.
One respondent wrote: “My mental health has become very poor as I am suffering from anxiety and spells of depression.” Another added: “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 – launched a High Court claim alleging that the company “unjustly enriched” itself by slashing commissions. The claim seeks up to £120m in damages.
Some franchisees have since said the pressure they faced triggered suicidal thoughts. MPs have compared aspects of the dispute to the Post Office Horizon IT scandal, highlighting the scale of alleged mistreatment of small business owners.
Vodafone said it regretted 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 launched its fourth investigation into historical conduct within its franchising division. It has also said it “strongly refutes” the allegations in the High Court claim, describing the case as a commercial dispute it intends to defend.
