The judgment below is reversed and the case is remanded to Seoul High Court.

The grounds of appeal are examined.

1. Case principal details

A. Review of the reasoning of the lower judgment and the record reveals the following facts.

1) Plaintiff A (hereinafter “Plaintiff A”)

(B) A is a franchisor that engages in franchise business in the mutual convenience store called “B (B). The Plaintiff entered into a franchise agreement with a franchisee, namely, two types of franchise stores, i.e., “full franchise store” or “entrusted franchise store. 2) The “full franchise store” is a franchisee who owns or rents a store and operates convenience stores by leasing equipment, fixtures, and interior and outside facilities, etc. from the Plaintiff.

Plaintiff

A shall supply the technology, trademark, etc. for the operation and management of convenience stores to the full franchise store, and the full franchise store operator shall be responsible for the operation of the franchise store by utilizing them, and the management of the franchise store shall be based on the support of the head office and the management guidance, with its own responsibility

Full franchise business operators shall order and deliver goods to the Plaintiff A, and transfer all sales proceeds to the Plaintiff each day, and the Plaintiff A shall pay to the franchisee the remainder after deducting the amount of profit distribution amount of the Plaintiff A calculated at a rate of 15% to 35% according to the amount of gross sales profit per month and the expenses (such as maintenance cost, electricity fee, 50%, etc.) in addition to the franchise agreement, which is to be borne by the franchisee, from the total sales profit.

However, if the amount of profit distribution of a franchisee does not exceed 5 million won per month in order to compensate for losses if the sales of a store are remarkably low, five million won shall be guaranteed to compensate for losses.

(hereinafter “Minimum Guarantee Support Fund”). 3 “Entrusted Store” is a method of entrusting the operation of a convenience store to a franchisee by owning or leasing a store by the Plaintiff and leasing equipment, furnitures, and interior and outside facilities, etc. without compensation.

A consignment merchant shall be entrusted with the sale of goods by the Plaintiff A.