62 Ex-Vodafone Franchisees Sue Over Debts and Mental Health Toll

Two women from Lincolnshire say they ended up tens of thousands of pounds in debt with mental health problems after operating Vodafone franchise stores.

Donna Watton and Rachael Beddow Davison are among 62 former franchisees suing the phone company. Their legal claim accuses Vodafone, which runs more than 350 franchise stores, of making business decisions in irrational and arbitrary ways.

Vodafone said it reviewed and improved the franchise program over the past two years. The company tried to settle the claim, including by offering a settlement that franchisees rejected.

Watton and Beddow Davison describe years of difficulties outside their legal case that devastated their finances and mental health. "They sold us a dream, but the reality was something different," Beddow Davison said.

Watton, 44, joined Vodafone in 2008 and managed a store in Boston. In 2017, she and Beddow Davison, 45, who had managed the Lincoln store since 2013, took over their locations as franchises. The deals let them run phone shops under the Vodafone brand using company systems.

Watton called the offer amazing and said she was excited to be her own boss. She had worked seven days a week to build a profitable business. Beddow Davison jumped at the chance, saying Vodafone wanted to turn managers into entrepreneurs.

The court claim says Vodafone changed terms in 2020. Franchisees allege the company cut commissions on phone upgrades and packages, then introduced a fines and penalties system. The women told the BBC the upgrade commission dropped nearly in half; Vodafone said about 40 percent.

They called the fines extremely disproportionate, costing thousands of pounds. Beddow Davison said she was charged more than £3,260 in March 2022 after a team member was abrupt with a customer on web chat.

The women say Vodafone pushed them to take additional stores without trading history or customers. They were told Vodafone would cover if the stores missed £40,000 in the first year, but it did not. Vodafone argues there was no profit guarantee and £40,000 was just a year-one earnings goal.

Watton said Vodafone did not renew her contract for the profitable Boston store. They also claim faulty footfall counters led Vodafone to expect impossible revenue. Vodafone said a third party managed the technology and investigated complaints.

The women raised concerns repeatedly with Vodafone. "If it had been how the franchise program was in the beginning it would have been absolutely fine," Watton said. "But unfortunately the goal posts were massively changed."

Debts piled up from fitting out new stores, running unprofitable ones, Covid loans and fines. Beddow Davison, a single parent of three, invested thousands on rent and back-office setup for a Gainsborough store that lost up to £10,000 a month. By November 2022, she quit.

"I was paranoid, thinking they were trying to give my store to somebody else," she said. Her Lincoln store renewal was due, but talks stalled. "I just thought it would be better if I wasn't here. I tried to take my own life. I thought my children would be better without me. My parents live next door and luckily my mum came over. Otherwise, I wouldn't be here today."

In October 2023, Watton got two months' notice that Vodafone would not renew her Boston contract. She had a five-month-old baby and two stepchildren. "I can't say I would do it, but I did have suicidal thoughts. It was terrible," she said. "Vodafone put me in such a bad situation. Days out, holidays, we can't afford them. We've still not been on a family holiday abroad. This has had such a huge effect on the whole family."

Vodafone believes commission changes followed existing contracts and Watton's Boston deal ended naturally. It said it paid for branding and IT in new stores and covered first-year losses for unprofitable ones. Fines, or clawbacks, applied only to consumer harm risks under Financial Conduct Authority rules and have been revised.

A Vodafone spokesperson said: "We are sorry if any franchisee had difficulty operating their business. Over the past two years we have reviewed the program, investigated any concerns raised and have made several improvements to the model and sought to rectify any issues."

On the legal claim, the spokesperson added: "We have tried to resolve this complex commercial dispute on multiple occasions, and even offered a settlement that would ensure no claimants had debts linked to their franchise. We were disappointed to learn that our proposals were rejected by the company funding the claim."

The case may go to trial in late 2027. In March, MP Abtisam Mohamed of Sheffield Central and eight other MPs wrote to Vodafone calling franchisee accounts deeply troubling. They requested a meeting with executives.

Beddow Davison's MP, Richard Tice of Boston and Skegness where Watton ran her store, backs her. "We've had an adjournment debate, we have met with Vodafone and it's a really important issue that needs sorting and lessons need learning," he said.