LONDON (Reuters) – A group of current and former Vodafone franchisees in the UK filed a legal claim against the company on Tuesday over alleged cuts to their commission payments and remuneration at short notice and with little to no explanation since 2020.
Some of the 61 claimants, who are seeking over 120 million pounds ($153.05 million), said in a statement that Vodafone’s actions had caused them and their families severe financial and personal distress, including reaching the edge of bankruptcy.
Vodafone, one of the world’s largest mobile operators, said in a statement it was aware of the claims and that it took them seriously, but it denied the allegations.
Accusing the telecom of making decisions in bad faith and breaching franchise agreements, claimants alleged Vodafone benefited from government business rate reliefs intended for the franchisees when they were facing financial distress during the COVID-19 pandemic.
As part of the claim, Vodafone is also being accused of benefiting from “excessively” fining and imposing clawbacks on its franchisees.
One of the franchisees, Andrew Kerr, from Northern Ireland, claims that, with just 14 days’ notice, almost a third of his revenue was wiped out by Vodafone’s decision to cut his commission. He eventually lost his business.
“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,” Vodafone said.
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It said that its franchise model was a commercial relationship. Although franchise partners are offered support, commercial success was not guaranteed, Vodafone said.
“We maintain that where issues have been raised, we have sought to rectify these and believe we have treated our franchisees fairly,” Vodafone said.
($1 = 0.7841 pounds)
(Reporting by Catarina Demony; Editing by Leslie Adler)
