Before a group of 62 Vodafone franchisees pursued a £120m lawsuit against the telecom firm over commission cuts, they had been warning about the serious effects these cuts were having on their mental wellbeing. This warning was given four years prior to their legal action.
Franchisees of Vodafone’s high street retail outlets expressed high levels of stress and anxiety owing to the decision to decrease their fees. The research also revealed a lack of trust in the telecom group’s promises.
Representing nearly 40% of all Vodafone franchisees, the launch of a legal case in December alleged that Vodafone unjustly benefitted financially at the expense of many vulnerable small business owners by substantially slashing their commissions.
These details of dissatisfaction surfaced in a 2020 survey, taken weeks after Vodafone cut fees paid to small retailers for the sale of its products and services. This reduction followed a half-year period of trading uncertainty due to the Covid pandemic.
This survey, conducted by a steering committee of Vodafone franchisees and based on a model provided by the British Franchise Association, received input from 119 out of the total 167 historical Vodafone franchisees.
In the survey, franchisees rated how much they agreed with certain statements, with scores indicating their level of agreement. They showed low levels of trust in Vodafone, rating how much they trusted the company’s word at 1.75, and how valued they felt by the company at 1.67.
The comments section of the survey, particularly under the category of wellbeing, saw a majority of franchisees leave negative feedback. Many linked the changes made by Vodafone to increased anxiety and stress, with several participants reporting ill effects on their mental health and family life.
MPs have drawn parallels between the Vodafone franchise dispute and the Post Office Horizon IT scandal, highlighting the severity of the franchisees’ concerns.
Vodafone has expressed regret for any franchisee’s difficult experience. Despite this, the company believes it has a successful franchise operation and many franchisees have expanded their businesses with them.
Vodafone has initiated a fourth internal investigation into the conduct of its franchising division. The company strongly denies the allegations in the high court claim and intends to defend itself against what it perceives as a commercial dispute.
