1. Of the judgment of the court of first instance, the part against the Defendant (Counterclaim Plaintiff) exceeding the amount ordered to be paid below.

1. The scope of this court’s trial in relation to the principal lawsuit: (a) in the first instance court against the Defendant, the Plaintiff claimed for penalty against the Defendant; (b) royalties to the sales omitted from July 2013 to September 2013; (c) royalties to the sales omitted from July 2014 to June 2015; (d) royalties to the sales omitted in relation to the pipelineing program from May 2015 to July 2016; (5) royalties to the sales omitted in relation to the pipelineing program; and (7) from August 2016 to December 2016; and (6) the first instance court rejected the portion of the penalty: (i) a claim for penalty; (ii) a claim for penalty; and (iii) a claim for each contract; and (vii) a claim for termination of the penalty due to the termination of the contract; and (iv) a claim for penalty.

In this regard, only the Defendant appealed against the part accepting the claim for penalty and the part accepting the claim for penalty due to the termination of the contract, and thus, the subject of the judgment by this court is limited to the part concerning the claim for penalty and the claim for penalty due to the termination of the contract.

2. The reasons why the court stated in this part of the basic facts common to the principal lawsuit and the counterclaim are as follows, except for adding "(the franchise agreement entered into between the plaintiff and the defendant)" to "the following" under the first sentence of the first instance judgment (the franchise agreement entered into between the plaintiff and the defendant). The reasons are as stated in paragraph (1) of the first instance judgment's reasoning.

(Article 420 of the Civil Procedure Act). 3. The validity of the termination of the instant franchise agreement is examined as to the validity of the termination of the Plaintiff’s franchise agreement, which is a common issue in the principal lawsuit and counterclaim.

A. Article 14(1) of the Fair Transactions in Franchise Business Act (hereinafter “Franchising Business Act”): Where a franchisor intends to terminate a franchise agreement, the franchisor shall specify the violation of the agreement with a grace period of not less than two months and shall not correct it.