Franchising. Own everything, control nothing.
62 Vodafone shop owners took the company to the High Court over 85 million pounds. They weren't staff, they were owners, and that was the problem.
THE GIST ON FRANCHISING: "The Shop That Isn't Yours"
Who took Vodafone to court?
62 people who ran Vodafone shops took the company to the High Court, saying it had enriched itself to the tune of 85 million pounds. Some had personal debts of over a hundred grand and were worried about losing their homes.
They weren't staff, they were owners, because owning a shop and controlling it are two very different things.
How big is franchising in Britain?
It's Britain's silent giant: 50,000 businesses, 935 brands, 19 billion pounds a year and 710,000 jobs. McDonald's, Costa, Subway, Domino's.
A lot of these Vodafone franchisees were once Vodafone's store managers, persuaded to leave the payroll and buy the shop they already ran.
Who holds the power in a franchise?
The exchange looks simple. You put up the money, sign the lease, hire the staff and take on the debt. They own the brand, set the prices, control the stock and write the contract. Which means they can change your commission whenever they like.
The claimants said Vodafone cut theirs, fined them for administrative errors and encouraged them to take out loans to stay afloat. Vodafone denied it and admitted no liability.
How did it end?
They settled out of court last month. So there's no ruling or decision by a judge, just an apology and the thick end of 5 million quid paid out. Last week the government ordered two reviews of the entire industry, because Britain has no franchising law.
Ownership is meant to mean control, but here it's split in half. You own everything that can go wrong, and they own everything that decides whether it does. The moment those come apart, ownership stops meaning power and starts meaning liability.
Would you buy a franchise?
Your take. One tap, then see how everyone else voted.
Quick answers
How big is franchising in Britain?
50,000 businesses, 935 brands, 19 billion pounds a year and 710,000 jobs.
How did the Vodafone franchise case end?
It settled out of court last month with an apology and the thick end of 5 million pounds paid out. Vodafone denied the claims and admitted no liability.
Is there a franchising law in Britain?
No. Last week the government ordered two reviews of the whole industry.
See you on the next one.
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