Vodafone was warned by its franchisees that cuts to commissions were having a “massive impact” on their mental health four years before a group of 62 small business owners launched a £120m high court claim against the telecoms giant.
Franchisees reported stress, anxiety and even depression following Vodafone’s 2020 decision to reduce fees paid for selling its products and services. The move came after months of uncertainty caused by the Covid pandemic and left many franchisees struggling to cover overheads.
A survey conducted by a steering committee of Vodafone franchisees in September 2020 revealed widespread dissatisfaction, with respondents giving the company just 1.75 out of 5 for “trusting Vodafone’s word” and 1.67 out of 5 for feeling “truly valued”.
In written responses, franchisees described suffering panic attacks, insomnia, and family strain. One wrote: “My mental health has become very poor as I am suffering from anxiety and spells of depression.” Another added: “I think it’s disgraceful that I feel the constant threat of losing my savings, home and livelihood.”
Many former franchisees say pressure from Vodafone executives drove them to the brink of suicidal thoughts, with some falling into personal debts of more than £100,000. MPs have compared aspects of the dispute to the Post Office Horizon scandal.
The 62 franchisees, representing nearly 40% of Vodafone’s former network, allege the company “unjustly enriched” itself at their expense. Vodafone has launched a fourth investigation into its franchising practices but “strongly refutes” the allegations, calling the case a “commercial dispute” it will defend.
A spokesperson for Vodafone said: “We are sorry to any franchisee who has had a difficult experience. 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.”
