Bitter Vodafone franchisee dispute heads toward trial as mediation fails

A £120 million High Court claim brought by current and former Vodafone UK franchisees is likely to head to trial next year. 

Mediation has failed and preparations under way for a full trial that could have wide implications for the telecoms retail sector.

Vodafone’s franchise programme offered local entrepreneurs the chance to run the stores and earn commission for no upfront cost, provided they could demonstrate that they had the funds to cover the cost of running the store for the first three months.

The case, APK Communications Ltd and others v Vodafone Ltd, was filed a year ago by more than 60 franchise operators. The claimants are seeking £120 million and understood to be represented by a legal team including IBB Law and Bird & Bird, although irepresentation in the group action may be split across other legal advisers.

Efforts to reach a negotiated settlement collapsed in May 2025, clearing the way for the dispute to proceed through the courts. Tensions escalated further a month later, when Vodafone terminated the contracts of 12 franchisees who remained in its retail network while participating in the legal action, citing an irreparable breakdown in trust.

Commission

The franchisees allege that, from around July 2020, Vodafone imposed unilateral and unreasonable changes to commission structures, alongside heavy fines and clawbacks for relatively minor compliance breaches. They argue these measures rendered many Vodafone-branded stores commercially unviable, leaving operators with significant personal debts and, in some cases, forcing store closures.

Vodafone has consistently rejected the allegations, describing the dispute as a commercial disagreement and maintaining that franchise profitability was never guaranteed. However, the company repaid around £4.9 million in adjustments following internal reviews.

Political attention

The case has attracted political attention, with MPs and ministers raising concerns about power imbalances in franchise relationships and the adequacy of protections for small business operators. In September, Vodafone confirmed it had launched a further internal inquiry into its franchising division, its fourth review in recent years.