Vodafone has recently decided to terminate the contracts of 12 franchisees who have been involved in a £120m high court claim against the telecoms group while still operating the brand's high street stores.

The lawsuit was initiated by 62 franchisees in December, alleging that Vodafone had unfairly benefited itself by reducing commissions to franchisees running the company's retail outlets, putting many small business owners at risk.

Despite being part of the legal action, a dozen of the claimants continued to be part of the franchise program. Some of the franchisees expressed experiencing severe pressure from Vodafone, leading to suicidal thoughts, fears of losing their livelihoods, homes, or life savings, and accumulating personal debts exceeding £100,000.

Vodafone, valuing the legal claim at £85.5m, has consistently denied the allegations, calling it a complex commercial dispute between the company and some franchise partners.

In response to the termination of contracts for the 12 current franchisees, a Vodafone spokesperson emphasized the company's commitment to supporting franchise partners dedicated to mutual success. The telecoms group expressed concerns about the negative impact of the ongoing campaign on the franchise program.

A franchise allows a company to sell products or services under another brand's name in exchange for certain payments. Vodafone franchisees received commissions based on revenues generated from handset and airtime sales.

The court documents allege that Vodafone acted in bad faith by reducing fees, imposing hefty fines for minor errors, and pressuring franchisees to secure loans and grants to sustain their businesses.

Vodafone refutes claims of unjust enrichment and mentioned making improvements to the franchise partner program following investigations. The company reimbursed nearly £5m to franchisees, including fines and clawbacks.

Whistleblowers had previously alerted senior Vodafone executives about the financial struggles faced by franchised store owners, leading to the current legal battle.

Despite unsuccessful settlement talks, the dispute may proceed to the high court. Vodafone recently finalized a £16.5bn merger with Three UK, forming the UK's largest mobile operator with over 27 million subscribers.

The new VodafoneThree joint venture plans to close some of its 650 stores located in close proximity on high streets and in shopping centers.

Vodafone's CEO Margherita Della Valle expressed openness to further discussions to resolve the ongoing commercial dispute with franchisees.