1. The Defendant (Counterclaim Plaintiff) paid KRW 10,000,000 to the Plaintiff (Counterclaim Defendant) and the Plaintiff’s objection thereto from July 20, 2017 to February 12, 2019.

A principal lawsuit and a counterclaim shall be deemed simultaneously.

1. Facts of recognition;

A. On March 2, 2015, the Defendant concluded a franchise agreement with C (hereinafter referred to as “C”) under which both the overall franchise business, trademark rights, and the exclusive supply right of Han Uniforms Co., Ltd. (hereinafter referred to as “D”) grant C all the franchises using the brand called “D” and “D” (hereinafter referred to as “D Han Uniforms and Dungs Exclusive Supply Agreement”).

B. Around August 2016, the Defendant entered into a franchise agreement with the Plaintiff with the term “D” as “Plaintiff”, “principal company” as “Defendant”; the term of the contract from September 1, 2016 to September 1, 2018; and “Seoul” as “business area” (hereinafter “instant franchise agreement”); and the Plaintiff paid KRW 10 million to the Defendant.

C. On June 23, 2017, the Plaintiff: (a) concealed the conclusion of the instant franchise supply contract through the content-certified mail to the Defendant; (b) concluded the instant franchise agreement; and (c) notified the Defendant that the instant franchise agreement will be revoked and terminated on the ground of nonperformance of contractual obligation under the instant franchise agreement.

Meanwhile, the Defendant filed a lawsuit against C with this Court 2015Gahap570860, seeking confirmation of termination of the contract on the ground of nonperformance of the obligation under the exclusive supply contract, such as the franchise right of this case, etc., and C filed a lawsuit seeking settlement, etc. upon termination of the contract with this Court 2016Gahap5252, as a counterclaim.

On August 18, 2016, the court of the first instance rendered a judgment dismissing the defendant's main claim and partly citing C's counterclaim.

On September 25, 2017, the Defendant confirmed that the exclusive supply contract, such as the franchise right, was terminated, and that the Defendant filed an incidental appeal (Seoul High Court 2017Na200245, 2017Na200252).