Vodafone settles legal claim brought by 62 former franchisees

Vodafone has reached a settlement with 62 former franchisees who had accused the mobile phone giant of unjustly enriching itself at their expense by as much as £85 million. These small business owners, some of whom reported experiencing suicidal thoughts due to the pressure from Vodafone, initiated the High Court claim in 2024.

They alleged that their significant personal debts stemmed from their agreements with the company. Court documents revealed that the former shopkeepers suffered substantial losses after Vodafone unilaterally reduced the sales commissions paid for operating the company's high street stores. Lawmakers had previously drawn parallels between this case and the Post Office Horizon IT scandal.

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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.

In a joint statement, both Vodafone and the group of former franchisees confirmed the conclusion of the 19-month legal dispute, which had not yet gone to trial. They stated, "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."

The statement emphasized that the settlement was made as a compromise without any admission of liability. The agreement concludes the legal proceedings, and the specific terms will remain confidential, with neither party intending to comment further. The plight of these 62 franchisees, representing nearly 40% of Vodafone's total 167 franchisees, was initially reported by The Guardian in December 2024. Court filings alleged Vodafone acted in "bad faith" by cutting fees, imposing heavy fines for minor errors, and encouraging franchisees to take out loans and government grants to stay afloat. The company had consistently denied "unjustly enriching" itself, characterizing the claim as a "commercial dispute."

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The settlement is entered into as a compromise of the dispute, without any admission of liability, and should not be construed as such. The agreement ends the legal proceedings between the parties. The terms of the settlement will remain confidential, and the parties will not be commenting further.