1. All appeals by the Defendants are dismissed.

2. The costs of appeal are assessed against the Defendants.

Purport of claim and appeal

1.

1. In the first instance court, the Plaintiff sought payment of the Plaintiff’s loan (i) loan, (ii) price of goods, and (iii) payment of royalties and damages for violation of the Unfair Competition Prevention and Trade Secret Protection Act against the Defendants. The court of first instance partly accepted the Plaintiff’s loan claim, and dismissed the claim for the price of goods and the claim for damages.

Since the defendants appealed against this, the subject of the judgment of this court is limited to the above loan claim.

2. Facts of recognition;

A. On March 30, 2011, the Plaintiff entered into a franchise agreement with Defendant B, which provides Defendant B with know-how for food development and permits the Plaintiff to use the Plaintiff’s trade name, trademark, and service mark, thereby allowing Defendant B to operate a D major discharge store from Daejeon Jung-gu (hereinafter “instant franchise agreement”).

According to the franchise agreement of this case, Defendant B paid the Plaintiff KRW 3,00,000 to the Plaintiff for expenses incurred in relation to the signboards and interior equipment, such as D major discharge points, and Qua New, on the date of concluding the franchise agreement, Defendant B agreed to pay KRW 1,00,000 to the Plaintiff at the same time as the construction work for the interior equipment is completed.

However, Defendant B paid only KRW 700,000 to the Plaintiff on the franchise store contract date, and thereafter, Defendant B did not pay the remainder of KRW 2,300,000,000 even after the completion of construction on the signboards, etc. of the discharge points in D major.

B. On April 10, 201, the Plaintiff lent KRW 5,000,00 to Defendant B. However, the Plaintiff’s KRW 2,300,00 among them is to cover KRW 2,30,000 as indicated in the above paragraph (a) that Defendant B ought to pay to the Plaintiff under the franchise store agreement, and KRW 1,700,000 is to be transferred to Defendant B’s deposit account. The remainder of KRW 1,70,00 is to supply Defendant B with food and food materials necessary for Defendant B’s discharge points.