Lead
Vodafone has settled a long-running legal claim filed by 62 of its former franchisees, who alleged the mobile phone group "unjustly enriched" itself at their expense by up to £85m. The settlement, announced in a joint statement on Thursday, concludes a 19-month high court claim that had yet to come to trial.
The former franchisees, small-business owners who ran Vodafone high street stores, alleged the company unilaterally slashed sales commissions, imposed large fines for minor administrative errors, and pressured them into taking on loans and government grants, leading to significant personal losses.
In a joint statement, both sides said: "Vodafone Ltd UK and the group of former franchise partners are pleased to confirm that the commercial dispute concerning the interpretation of franchise agreements has been settled." They added that the settlement was "entered into as a compromise of the dispute, without any admission of liability, and should not be construed as such," with terms remaining confidential.
The settlement comes as the family of Adrian Howe, a former Vodafone employee who died in 2018, urges the government to introduce a new franchising law in his name.
Coverage comparison
Two reports from The Guardian covered the story from different angles. The first focused on the settlement itself, detailing the franchisees' allegations and the legal proceedings. The second report centered on the family of Adrian Howe, who took his own life in 2018 after becoming convinced his new Vodafone franchise would be financially ruinous, and their campaign for legislative change.
Key claims
- Vodafone settled the claim without admitting liability; terms are confidential.
- The 62 franchisees represent almost 40% of the total 167 Vodafone franchisees, as reported by The Guardian.
- Court papers alleged Vodafone acted in "bad faith" by unilaterally cutting fees, issuing swingeing fines, and encouraging franchisees to take on debt, according to The Guardian.
- Some franchisees said they suffered suicidal thoughts due to pressure from Vodafone, as reported by The Guardian.
- MPs compared the case to the Post Office Horizon IT scandal, according to The Guardian.
- Adrian Howe's daughter, Kirsty-Anne Holmes, is advocating for "Adrian's law" to regulate franchising, having met a representative of the Department for Business and Trade.
- Howe's case was raised in parliament in January, prompting then-Prime Minister Keir Starmer to pledge a review of franchising laws, as reported by The Guardian.
Perspectives
Vodafone
Vodafone stated the settlement was a compromise of the dispute without admission of liability, with terms confidential, and said the parties would not comment further.
Former franchisees
Through their joint statement, the franchisees said the dispute concerned the interpretation of franchise agreements and confirmed the settlement, without further comment.
Adrian Howe's family
Kirsty-Anne Holmes said: "There is no protection for franchisees in the UK – that needs to change." She called for a governing body to oversee contracts, saying, "If these protections had been in place previously, my dad taking his own life might not have happened."