Corporate Businesses and Franchisees: Regulatory Environment

Luke Akehurst Excerpts

Wednesday 2nd July 2025 Commons Chamber

[Sir John Hayes]

I will give way to the hon. Member for North Durham (Luke Akehurst) and then to my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith).

[Luke Akehurst (North Durham) (Lab)]

I congratulate the right hon. Gentleman on securing this important Adjournment debate. Like him, I have met Vodafone franchisees in my constituency, particularly the Chester-Le-Street former franchise holder, whom I met again today. I am grateful to the right hon. Gentleman for setting out the legal advice he has received on the ongoing case, and I will therefore be careful about what I say. I think there are major corporates that treat their franchisees very badly; they sign them up on one set of terms—one rate card—and then change the goalposts, and then, when people dissent and complain about that, they find their franchises withdrawn and lose their investment, after they have put a great deal into that corporate giant. I think this is a matter that will in the near future require ministerial attention. I thank the right hon. Gentleman very much for bringing this to the House’s attention.

[Sir John Hayes]

I give way to my right hon. Friend the Member for Chingford and Woodford Green.

--- Later in debate ---

[Gareth Thomas]

I have already given a flavour of what might be in the small business strategy. I will leave the right hon. Gentleman to wait a little longer, if I may—he will have to forgive me—before he sees the strategy in full.

Let me come to the substance of the right hon. Gentleman’s concern. He rightly and understandably mentioned the experiences of a number of franchise operators who allege mistreatment and being badly let down by Vodafone during covid. No one in the Chamber will have failed to have been moved by those stories. I have read a number of them in correspondence from colleagues on both sides of the House.

There are, without question, serious allegations being levelled at Vodafone. As the right hon. Gentleman said, and as I am sure he will understand, I am unable to comment on ongoing legal disputes, but I will respond on behalf of the Government as best I can, given the ongoing nature of the case. Until now, there has not been sustained concern about the quality or effectiveness of the self-regulation of franchises in general. However, I recognise that this case has raised concerns across the House, and I will track very carefully what happens in this case, the final outcome, and the conclusion of any court case.

As hon. Members will no doubt be aware, franchising is growing in the UK, and it makes a big contribution to our economy, at just over £19 billion annually, according to the latest British Franchise Association survey. The franchising industry is covered by the same general protections in law as other businesses, and I will come on to some of those in a moment. In addition, the franchising industry also effectively self-regulates through the British Franchise Association, which has a code of ethics, and the Quality Franchise Association, which provides a code of conduct. On the whole, as the House will recognise, there are significant advantages to self-regulation: greater flexibility and responsiveness, and lower costs.

[Luke Akehurst]

Is the Minister aware—this is my understanding from the franchisees—that Vodafone left the BFA, and walked away from its self-regulatory framework and code of conduct?

[Gareth Thomas]

My hon. Friend will forgive me, but I will not comment on the particular circumstances of Vodafone and its relationship with franchisees in general, or those former franchisees who are bringing court action. However, I note his comment.