A man who ran Vodafone stores in and around Glasgow is among a group of 62 former franchisees who are bringing an £85 million legal claim against the retail giant.
The landmark claim, which reached the High Court in London, has been brought following allegations of mistreatment of franchisees and alleged serious corporate governance failings by Vodafone.
It alleges the telecoms company breached its duty of good faith by imposing irrational, capricious and arbitrary business decisions on the affected franchisees, resulting in severe financial harm and lasting mental health consequences.
Vodafone is defending the claim and said they have tried on multiple occasions to resolve the matter with the claimants.
Former franchisee, Simon Doherty, has revealed his experience of the Vodafone Franchise Programme and the toll it took on him.
The 44-year-old said: “I took the keys to my first shop, in East Kilbride on March 1, 2020 and went on to open the Hamilton shop later that year.
“We then had an opportunity to take on two stores at Glasgow Fort and Silverburn Shopping Centre and, as we took them on, really oddly overnight, Vodafone cut my commissions quite drastically for Hamilton and East Kilbride.
“We therefore tripled our operational scale because the Fort and Silverburn stores are much bigger than Hamilton and East Kilbride, but in terms of the whole package, it was strange because we weren't going to be earning much more from four stores than we would from two.
“At the time I was told it was a mistake and be fixed, but it never was.”
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Despite this, Simon explains they still had a “very viable” business and he went out to hire “some of the best people in the telecoms industry”.
The decision to cut the commissions for Hamilton and East Kilbride, however, was a flavour of things to come.
“We ran a really top-notch franchise operation and we were in the top three consistently, so we had a good business,” he explained.
“There was then big swingeing cuts made in terms of the revenue to upgrading customers and that was massive in terms of what it meant for our business.
“It came with a promise that because Carphone Warehouse was shutting down, we would see additional volumes that would make up for the reduced commissions, however, that never happened.
“Then after five months at Silverburn, without any notice, we had a cut of £8725 a month. This had been an operational support payment for taking on a super high rent store, so that was a big chunk of money in terms of the commerciality of that store.
“Further down the line, we then had cuts to the commission again in East Kilbride and cuts to the commission at Glasgow Fort to the point that we were trading one of the top half a dozen stores in the company almost at break even in terms of where our commercial performance was.”
Simon said these decisions made things untenable for him, but he “still managed to make money out of the business”.
He added “I did think that we would have sorted this amicably and I did want to renew my leases on those stores, however, I was terminated for convenience - that was the legal term that was used when they terminated our stores, top-performing stores,”
Simon exited the franchise programme in the summer of 2024.
He added: “My wife worked for the business, so overnight we went from having a really good business to essentially being both technically unemployed.
“From a mental point of view, it certainly took its toll. It was pretty tough and I went through some really dark times.”
Simon also expressed frustration about “arbitrary fines” received by franchisees.
This is one of the key claims made by the franchisees, with one reporting that they were fined £10,000 in response to a £7.80 customer mischarge.
A spokesperson for Vodafone said: “We continue to run a successful franchise business in the UK with over 350 stores,” adding that "the majority" of partners had expanded their business with them.
“This is a complex commercial dispute between Vodafone and some former franchisees.
"While we fully reject the claims against us, we are sorry if any franchise had difficulty in operating their business.
“We have engaged in efforts to resolve the matter with the claimants, including making a reasonable offer to settle, and remain open to further talks."
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