franchise stores – Mobile News

Bitter Vodafone franchisee dispute heads toward trial as mediation fails

Staff Reporter — Wed, 10 Dec 2025 22:31:50 +0000

An £85 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 £85million and understood to be represented by a legal team including Knights and Bird and 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.

O2 closes franchise stores programme

Staff Reporter — Mon, 26 Sep 2022 19:38:12 +0000

Franchise stores to be taken over by O2

The majority of O2 independent franchised business stores are to be taken over by O2 following a decision to cease its store franchise operation which has been running since 2005.

Most franchise stores will be taken over by O2 and the staff working in them will be transferred to roles in O2.

O2 said it was not in a position to confirm numbers at this time. The exit of its franchise channel will be rolled out over the coming months and years, and the network says its priority is communication with Franchisees.

The franchisees O2 include:

Avertec (24 stores), BAK and Southern Connection (21 stores), Celfone Trading (six stores), Communications Plus (20 stores), East Midlands Communications (two stores), Fone Trading Zone (two stores), JAR Communications (five stores), Lordwardens Consultancy (four stores), MID Communications (16 stores), MMD Communications (18 stores), Talk Direct Leeds (16 stores), and Talk Talk Mobile Phones (37 stores).

A statement from O2 said:

“To deliver the great products and services our customers expect, we sometimes need to evaluate how our business operates. After reviewing our retail strategy we’ve decided we will be bringing the majority of franchise stores under company ownership over time, investing in refurbishments to enhance our customers’ high street experience and creating opportunities for franchise employees to join the O2 business.”

O2 has run a mix of company-owned stores and franchise outlets since 2005.

Union ‘shocked and angry’ at O2 franchise plan

Staff Reporter — Tue, 30 Oct 2012 15:42:33 +0000

The Communication Workers Union says O2 is “playing poker” with its members’ livelihoods by planing to franchise 82 of its retail stores

A union representing the interests of staff in the telecoms sector has said it’s members are shocked and angry to learn O2 have plans to franchise 82 of its 464 retail stores.

The operator has a total of 462 shops across the UK, 202 of which will now be franchise-owned.

Both new and existing staff will be considered for the ownership position, with up to £50,000 of investment required. O2 expects the process of finding suitable franchise owners to take up to nine months.

O2 said retail jobs will not be affected, but the Communication Workers Union (CWU) deputy general secretary Andy Kerr argues O2 was playing poker with its members’ livelihoods in this franchising move which will destabilise the whole retail network, not just the 82 affected by today’s announcements.

Kerr said: “Staff will be wondering whether they have a job and what their future holds as they enter the busy pre-Christmas shopping period.

“O2 shop workers are the lowest paid staff in the company and are the most vulnerable. Not only will staff feel shocked by this decision but we believe O2 is taking a huge risk by moving into this model at this time.

“The company is simply hoping that appropriate candidates will come forward as franchisees in response to their advert instead of directly managing their brand and high street sales.”