'Vodafone sold us a dream - the reality was something different'

An important development from the financial markets: 'Vodafone sold us a dream - the reality was something different' 1 hour ago Share Save Add as preferred on Google Jessica Lane East Yorkshire and Lincolnshire News Donna Watton, left, and Rachael Beddow Davison, right, are taking Vodafone to court Two women say they were left tens of thousands of pounds in debt and with mental health issues after running Vodafone franchise shops. Donna Watton and Rachael Beddow Davison, from Lincolnshire, are among 62 former franchisees taking the phone company to court. In their legal claim, the group alleges that Vodafone – which has more than 350 franchise stores – made business decisions in "irrational, arbitrary" ways.

Vodafone says it has reviewed and made improvements to the franchise programme over the past two years and has tried to resolve the legal claim, including by offering a settlement, which it says was rejected. But separate to their legal case, Watton and Beddow Davison say they suffered years of difficulties, which have had a huge impact on their mental health and finances. "They sold us a dream, but the reality was something different," Beddow Davison says.

Economic Details

Vodafone says it runs a successful franchise business with more than 350 stores in the UK Watton, 44, and Beddow Davison, 45, were store managers employed by Vodafone when they were offered the chance to take over their stores as franchises in 2017. It meant running their own phone shop businesses under the Vodafone brand and using the company's business systems. Watton, who joined Vodafone in 2008 and managed a store in Boston, says the franchise offer "looked amazing" and she was excited about the opportunity to be her own boss.

"I was working seven days a week and putting so much effort in. I made it into a really profitable business," she explains. Beddow Davison, who had been a store manager since 2013, says she "jumped at the chance" to take on the Lincoln shop as a franchise.

Vodafone said they wanted to make their managers entrepreneurs," she adds. Commission cut According to the court claim, the franchisees allege that Vodafone made changes in 2020 that affected their businesses. They claim Vodafone suddenly cut commission on upgrades to phones and other packages, and shortly after this, brought in a fines and penalties system.

Analyst Views

Separate to their legal case, the women told the that the commission on upgrades was cut by nearly half. Vodafone has indicated the reduction was approximately 40%. The women described the fines and penalties system as "extremely disproportionate" and said it cost them thousands of pounds.

Beddow Davison says that on one occasion, in March 2022, she was charged more than £3,260 when a member of the team was accused of being "abrupt" with a customer on a web chat. Also separate to the court claim, Watton and Beddow Davison say Vodafone encouraged them to take on additional stores with no trading history or customer base.

Financial markets are tracking the development closely as investors assess the likely impact.