The government has pledged to monitor the outcome of a major legal case against Vodafone closely, following a powerful adjournment debate in Parliament that saw MPs from across the political spectrum rally behind franchisees alleging mistreatment by the telecoms giant.
Led by Conservative MP Sir John Hayes, the debate on Wednesday 2 July raised serious concerns over Vodafone’s conduct towards its former and current franchisees, who are now suing the company for more than £120 million in damages. The allegations include unethical clawbacks of Covid business rates relief, unjustified financial penalties, abrupt changes to commission structures, and a failure to address whistleblower concerns.
Sir John Hayes likened Vodafone’s franchise model to the structure behind the Post Office Horizon scandal, warning against ignoring the voices of franchisees in favour of powerful corporate interests. “Franchising can be used to exaggerate the power of the business at the heart of the franchise and to weaken the position of franchisees. That is common and is particular in the case of Vodafone,” he said.
Labour MP Luke Akehurst echoed the concerns, stating: “There are major corporates that treat their franchisees very badly… they sign them up on one set of terms… then change the goalposts… and when people dissent, they find their franchises withdrawn and lose their investment.”
The Minister for Enterprise, Gareth Thomas MP, acknowledged the gravity of the situation, confirming that the government is “tracking the case closely” and was “moved” by the testimonies from franchisees. “No one in the Chamber will have failed to have been moved by those stories,” he said. “This case has raised concerns across the House about the quality and effectiveness of the legislation that governs franchisees.”
The legal dispute stems from Vodafone’s alleged breach of contract and duty of good faith, including sudden commission cuts and aggressive financial clawbacks. Twelve franchisees involved in the legal action have had their agreements terminated by Vodafone in recent months, and mediation efforts earlier this year failed to resolve the matter. The case is now proceeding to the High Court.
Criticism was also levelled at the broader UK franchise system. MPs noted the absence of effective regulatory oversight, with the British Franchise Association described as a “toothless” voluntary body. Vodafone’s decision to withdraw from the self-regulatory framework further underscored the lack of accountability in the sector.
A spokesperson for the 62 current and former Vodafone franchisees welcomed the support from Parliament, saying: “The Minister’s acknowledgment that he was moved by our stories and is personally following the case was a powerful moment. We are looking forward to working further with the Minister to ensure no other franchise is treated as we were by a UK corporation.”
With mounting parliamentary pressure and a High Court case underway, Vodafone now faces growing scrutiny over its franchise practices and the prospect of wider regulatory reform to protect small businesses in similar agreements.
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Vodafone franchisee scandal prompts parliamentary support and calls for regulatory reform