In a case where Gap limited-liability company, which is the franchise headquarters, imposed a corrective order or penalty surcharge on the act of collecting or raising the so-called 'minationist' without prior consultation or consent from the franchisee for the services provided to franchisees in connection with purchase, marketing, business planning, quality control, etc., on the ground that the Fair Trade Commission constitutes Article 11 (2) 4, etc. of the Fair Transactions in Franchise Business Act, the case holding that Gap company cannot be deemed to have stated matters concerning the payment of the 'mination' in the franchise agreement, and that Gap company's imposition of 's 's 's 's 's 's 's 's 's' did not unfairly disadvantage franchisees by taking advantage of its trading position, thereby impairing fair franchise transactions.

In a case where Gap limited liability company, which is a franchisor, issued a corrective order and penalty surcharge on the ground that the Fair Trade Commission constitutes Article 11(2)4 of the Fair Transactions in Franchise Business Act (hereinafter “Franchising Business Act”), on the grounds that the act of imposing or raising the so-called Administration Fee, which is not entered in the franchise agreement without prior consultation or consent with franchisees for the services provided to franchisees in connection with purchase, marketing, business planning, quality control, etc., the case holding that since the Administration Fee constitutes the “price for providing support for business activities, etc.,” stipulated in subparagraph 6(d) of Article 2 of the Franchis Business Act, it is necessary to enter the franchise agreement in accordance with Article 11(2)4 of the Franchising Business Act, on the ground that there is no explicit provision on the initial franchise fee, fixed fee, etc. imposed on franchisees, but there is no explicit provision on the franchise agreement, it cannot be seen that Gap company’s act of imposing the Administration Fee on the franchise and its own franchise without prior consent from the Franchise Association.

Article 11(2)4 and Article 12(1)3 of the Fair Transactions in Franchise Business Act

Korean Epiz Co., Ltd. (Attorneys Park Im-sung et al., Counsel for the plaintiff-appellant)

Fair Trade Commission (Attorney Choi Jong-soo, Counsel for defendant-appellant)

July 6, 2017

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

The Defendant’s corrective orders and imposition of penalty surcharges in attached Tables 2, 3, and 4, which were issued against the Plaintiff as No. 2017-033 of the plenary session’s resolution on January 20, 2017, shall be revoked in entirety.

1. Facts of recognition;

[Reasons for Recognition] Facts without dispute, Gap evidence Nos. 1, 2, 3, 6, Eul evidence No. 1 (including above numbers), the purport of the whole pleadings

A. Status and general status of the plaintiff

The Plaintiff, as a person who allows a franchisee to operate a specialty store using his/her business mark “Pizzza Hut,” and receives franchise fees in return for supporting, educating, and controlling management, business activities, etc., is a business entity that grants franchisees a franchise license in relation to a franchise business, and is a franchisor under Article 2 subparagraph 2 of the Fair Transactions in Franchise Business Act (hereinafter “Fran Business Act”). The Plaintiff, as a subsidiary of 100% of the Yumbb Ba and Yumb Babbs controlled by Inc., is operating a Hut franchise business from November 12, 1997. The current general status of the Plaintiff is as follows.

The vote contained in the main sentence (2015 as of the base of 2015, unit: million won, opening, name) / The total amount of net income / the number of full-time employees of the total amount of total capital / the number of full-time employees of the total amount of total capital / the number of merchant / the number of total employees on June 39, 2015, 2015, 2015, 39,4468, 201, 145, 168 114, 2389, 37 △△△, 17, 823/38

(b) Type of franchise business operation and Plaintiff’s operation;

1) Franchise business is operated in the form of receiving franchise fees from a franchisee in return for granting franchisees a license to use business marks, such as trademarks, and providing various support for business overall. Franchise fees that a franchiser receives from a franchisee are paid by a franchisee. The franchise fees that the franchiser receives from a franchisee are ① payment to a franchiser to receive the franchise license or business activities, ② payment to a franchiser to guarantee the payment of the amount of debt or the amount of compensation for goods, etc., ③ payment in excess of the reasonable wholesale price out of the payments that the franchiser pays to the franchiser in the name of the price of fixtures, facilities, or goods supplied by the franchiser to start the franchise business or a rent for real estate; ④ Payments that are paid to the franchiser on a regular or irregular basis to the franchiser for the use of business marks, support for business activities, etc., ⑤ Payments that are paid to the franchiser in order to acquire or maintain the franchise license, and each franchiser receives full or partial payment from a franchisee in accordance with its own business characteristics among various franchise fees under the same name.

2) The domestic market size of the recipient market as of the year 2015 is approximately KRW 1:60,000, and the number of brand stores registered with the Fair Trade Commission as of the end of 2015 is about 40, and the number and sales of brand stores of the recipient store are as follows.

5 Pizza H (Plaintiff) 341 338 31,14 5 Pizza 305 Piza 305 65 304 691 691 610 5 PaPuzza 411 392 1,428 1,428 1,428 1,103 2 Dminzzza 98 1,805 1,953 3 Pizza 341,142 893 4 Pzza 305 305 691 6910 610 5 Pzzzzzzn 100 637 2727 127 1927 27,275 198 205 Pzzho 205 305 275 298

3) The Plaintiff’s franchise store is classified into three types, depending on the store size and type of business, such as Lestop type (198 square meters), delivery specialty type (83 square meters, 100 square meters type). In order to establish the Plaintiff’s franchise store, Lestop type store specialized shall be classified into KRW 49,100 (excluding value-added tax), deposit KRW 30,000 (including value-added tax), delivery specialized store and profit press store into KRW 24,60 (excluding value-added tax), deposit KRW 20,000 (including value-added tax), KRW 10,000 (including value-added tax), and all franchisees shall pay to the Plaintiff a written claim for payment of KRW 2,500 (value-added tax), KRW 50,00 (value-Added Tax) in the name of the Plaintiff’s franchisee, regardless of the type of franchise store type, and the Plaintiff shall additionally pay the Plaintiff a written claim for payment of the Plaintiff’s annual sales charges (5%).

The amount subject to the table classification contained in the main sentence shall be KRW 30,500,000, POS Software Maintenance Fee of KRW 30,000,00,000 for each education of the Plaintiff, and KRW 0.8% of the monthly sales of the Plaintiff, according to the number of orders issued by the subcontractor, the advertising contribution of KRW 5% of the monthly sales of the Plaintiff 6% of the monthly sales of food ingredients non-cooperative sales store, which is equivalent to the monthly sales of the orders for food materials non-cooperative sales store: KRW 14,50,000, and KRW 77% of the total amount of the POS equipment: the standards for the relevant disease control company, the standards for operating expenses of the Plaintiff 230,000,000 for each education, and Plaintiff 10,000,000,000 per monthly sales revenue of KRW 7% of the total amount of the equipment, and Plaintiff 10,700,000,000.

C. The Plaintiff’s act of imposing the Administration Fee

1) From January 1, 2003, the Plaintiff received monthly franchise fees under the name of “Fdminist Service Fee” (hereinafter “Fdminist Fee”) in return for providing various administrative support to franchisees with respect to purchase, marketing, business planning, quality control, etc., from franchisees. The Plaintiff first imposed 0.34% of monthly sales during the year 2003, on which the Administration Fee was imposed, and thereafter raised by 0.6% from January 1, 2004, and maintained the same rate from April 30, 2012 to 0.5%, and thereafter, the Plaintiff increased the monthly sales from 0.5% to 0.5% from 0.5% to 0.5% from 0.5% from 2004 to 0.5% from 0.8% from 0.5% from 205% from e-mail.

Table (units: 203.103 10.34% for the 205.25% for the 205.25% for the 205.35% for the 205.35% for the 205.35% for the 205.35% for the 205.25% for the 205.35% for the 205.365% for the 205.365% for the 2057.45% for the 206.45% for the 205.365% for the 205.45% for the 206.365% for the 2057.45% for the 206.5% for the 2057.45% for the 206.45% for the 206.5% for the 2015.45% for the 2018.45% for the 205.45%

2) On the other hand, from April 20, 2012, the Plaintiff drafted and issued a separate agreement on the payment of the Administration Fee (hereinafter “the Administration Fee Agreement”) with the existing franchisees who enter into or renew a new franchise agreement with the Plaintiff, as follows:

This Agreement contained in the main text of this Agreement (hereinafter referred to as the “Agreement”) was concluded on 00 October 200 between the Korea Epiz Ba LLC (hereinafter referred to as the “PHK”) with its main office in Gangnam-gu ( Address omitted) as follows. PHK and the occupational ○○○○○○○○○ (including transfer) shall determine Admin. Fe as this Agreement in addition to the franchise agreement entered into on 000,00 in 200 in concluding (including transfer) the Agreement. Article 2 [1] Admin. Fe is part of the expenses required for purchase, marketing, operation, computer support, customer counseling room operation, etc. 2) Amination. 30% of all the expenses incurred by 10% of all the expenses incurred by 5% of all the expenses incurred by 10% of all the expenses incurred by 5% of all the expenses incurred by 10% of all the expenses incurred by 10% of all the expenses incurred by 10% of the present Agreement, 30% of all the payment rate of these expenses.

D. The defendant's disposition

1) The Defendant: (1) on the ground that the Plaintiff’s failure to enter the franchise agreement in the franchise agreement while imposing the Administration Fee acknowledged as a franchise fee on the franchisee constitutes a violation in relation to the entries in the franchise agreement under Article 11(2)4 of the Franchise Business Act (hereinafter “instant ground for disposition 1”); (2) on the ground that the Plaintiff’s failure to consult with the franchisee in advance from January 1, 2003 to the closing date of deliberation, or collecting or raising the Administration Fee that is not entered in the franchise agreement without the consent of the franchisee, separately imposing and collecting the Administration Fee that is not entered in the franchise agreement, the Plaintiff’s collection or increase of the Administration Fee constitutes a disposition of not less than 12(1)3 of the Franchise Business Act, Article 13(1) [Attachment 2] of the Enforcement Decree of the same Act (amended by Presidential Decree No. 27751, Dec. 30, 2016; hereinafter “Enforcement Decree of the Franchise Business Act”) and Article 13(2)3(f)1) of the instant order for corrective order (hereinafter “the instant ground for disposition”).

2) Meanwhile, the Defendant determined that the act of the Plaintiff’s imposing the Administration Fee on the franchisee who prepared the Administration Fee Agreement after April 20, 2012 was unlawful since the franchisee signed the Administration Fee Agreement with the right to choose whether the franchisee continues to operate the business at the time of the conclusion of the pertinent agreement (i.e., no corrective order or penalty surcharge was imposed on this part).

3) The Defendant imposed a penalty surcharge on the Plaintiff in accordance with Article 35 of the Franchise Business Act, Article 34 of the Enforcement Decree of the same Act, the public notice on the criteria for imposing penalty surcharges on a business entity violating the Franchise Business Act (amended by Act No. 2017-1, Mar. 2, 2017; hereinafter “public notice of penalty surcharge”), and the specific process for calculating the penalty surcharge is as follows.

○ Relevant sales: From January 1, 2003 when the Plaintiff first imposed the Administration Fee, the period of violation is from November 30, 2016, which is the date of deliberation by the Defendant, and the relevant sales are the total sum of various franchise fees, fixed fees, and the Administration Fee, etc. that the Plaintiff received from the relevant franchisees during the period of violation. Accordingly, the relevant sales calculated as a result of the violation are KRW 75,265,828,00 (the sales amount after concluding a franchise agreement with the Administration Fee Agreement are excluded from the relevant sales amount).

00. Criteria rate for imposition: The Plaintiff does not make profits, unlike other franchisors, through the supply of raw and secondary materials, and thus, the franchisee does not have much disadvantage and degree of disadvantage. Therefore, the Plaintiff’s imposition rate of 0.7% shall be deemed to be “an act of gross violation.”

○ Calculation Criteria: 526,860,000 won (=75,265,828,000 won x 0.7%, and less than a thousand won)

○ The first adjustment by an action element, and the second adjustment by an action element: there is no corresponding matter.

○ Imposition Penalties: 526,00,000 won (at least 526,860,000 won)

2. Relevant statutes;

Attached Form 2 shall be as listed in attached Table 2.

3. Whether the ground for the disposition No. 1 of this case is legitimate

A. The plaintiff's assertion

The Administration Fee is the “Commission for Supporting Franchisees” that the Plaintiff, a franchisor, provided to franchisees, and is the consideration for supporting franchise stores, and is based on Article 2.3 of the franchise agreement of this case (hereinafter “instant provision”). It is difficult to clearly specify services provided by each department at the time of entering into the franchise agreement and expenses incurred for each service, and even if specific expenses are incurred, there is a chance to modify the franchise agreement whenever changes occur. Moreover, since franchisees are fully aware of the Administration Fee in advance through information disclosure statement, franchise consultation, original test, etc., it is reasonable that the Defendant emphasizes only the formal aspect of the franchise agreement written only, and determined that the Defendant constitutes a violation of the franchise agreement’s entry based on the grounds for disposition No. 1 is inconsistent with the purport of the provisions of the Franchise Business Act.

B. Determination

In light of the following circumstances that are acknowledged as above facts and Gap evidence Nos. 1, 3, 9, and 12 (including the above number), the plaintiff cannot be deemed to have entered matters concerning the payment of the Administration Fee in the franchise agreement, and thus, the ground for disposition No. 1 of this case is recognized, and the plaintiff's act is in violation of Article 11 (2) No. 4 of the Franchise Business Act. Therefore, the corrective order as stated in attached Table 1 (2) based on the ground for disposition No. 1 of this case is lawful, and the plaintiff's above assertion is without merit.

(1) Article 2 Subparag. 6 of the Franchise Business Act provides that “Franchising fee means any of the following consideration, irrespective of the name or means of payment,” and subparagraph (d) of the same Article provides that “Franchising business operator shall pay to a franchiser periodically or on a non-regular basis with regard to the use of business marks permitted under an agreement with a franchiser, support for, training on business activities, etc., and other matters, as prescribed by Presidential Decree.” The term “Franchis” claims that the Plaintiff claims to the franchisee for the consideration of services provided by the Plaintiff’s purchase team, quality control team, marketing team, computer team, business planning team, etc., and thus, it is necessary to enter into a franchise agreement in the franchise agreement pursuant to Article 11(2)4 of the Franchise Business Act. However, with respect to the first franchise fee, fixed fee, raw material expense, call center expenses, advertising expenses, which are imposed on the franchisee, but there is no explicit provision regarding the existence of the basis for the franchise.

(2) Article 2.1 of the franchise agreement provides that "the first franchise agreement shall pay the first franchise operator the franchise agreement on or before the date of granting franchise business licenses", Article 2.2 provides that "the first franchise agreement shall pay the fixed franchise fee specified in Appendix B to the franchise business operator. The payment date or before the date of the fixed fee shall be accompanied by a franchise business operator's gross income in the form designated from time to time for the pertinent fiscal period. The payment of a franchise agreement under Articles 2.1 and 2.2 shall be the price for the right granted as specified in Article 1.1 and the price for the franchise business operator's performance of specific duties or services shall not be one week." The above content is merely that "the first franchise agreement under Article 2.1 and the fixed fee under Article 2.2 shall not include the consideration for the provision of the Plaintiff's specific services." Article 2.2 of the franchise agreement provides that "the payment of the fixed fee shall not be made if the Plaintiff has enjoyed marketing, service performance, etc. to the owner of the franchise in this case."

③ The Plaintiff explicitly stated in the franchise agreement regarding the initial franchise fee, fixed fee, raw material cost, call center cost, and advertising cost, which are imposed on franchisees. From the end of 2004, the Plaintiff imposed the Administration Fee after specifying a department (purchase, marketing, quality control, computer, call center) closely related to the franchise store service. It does not necessarily seem to have been impossible to specify the concept of Administration Fee in advance as “the service cost provided by the franchiser’s purchase team, quality control team, etc.”

④ Article 11(2) of the Franchise Business Act explicitly provides for the matters to be stated in the franchise agreement to be specified in the franchise agreement, thereby protecting franchisees in a relatively unfavorable position in the transaction. Although the Act explicitly provides for the protection of franchisees, the essential descriptions under Article 11(2)4 of the Franchise Business Act are not different in determining the possibility of actual protection of franchisees. Moreover, since the term “matters concerning the payment of franchise fees, etc.” is a “matters concerning the payment of franchise fees, etc.,” it cannot be said that a franchisee can be sufficiently anticipated or that a franchisor need not inform a franchisee of such matters.

4. Whether the ground for the disposition No. 2 of this case is legitimate

A. Whether “an act of unfairly inflicting disadvantage on a franchisee by taking advantage of trade position”

1) The plaintiff's assertion

The Plaintiff was subject to sufficient prior consultation or consent procedures with franchisees at the time of changing the imposition and rate of the Administration Fee. At the time of entering into the franchise agreement, the Plaintiff explained the Administration Fee to the franchisees in detail, and considering the disadvantages the franchisees entered, the Plaintiff’s act of imposing the Administration Fee does not constitute “an act of unfairly putting the franchisees at an unreasonable disadvantage by taking advantage of the transactional position” under Article 12(1)3 of the Franchise Business Act.

2) Determination

Whether a franchisor is an act that unfairly gives a franchisee disadvantage to a franchise business by taking advantage of its position in a transaction, and that is likely to interfere with the fair franchise business transaction, shall be determined by specifically taking into account various circumstances, such as the terms and conditions of the franchise agreement, the purpose and contents of the franchise, the specific details of allocation of the Administration Fee, whether the franchisee reflects the intention of the franchisee on the burden of Administration Fee, the probability and contents of the occurrence of losses that may arise to the franchisee due to the imposition of Administration Fee, and the trading practices and forms of transaction in the related

Examining the following circumstances comprehensively in light of the aforementioned facts and the purport of Gap's evidence Nos. 3, 4, 5, 7 through 20, Eul's evidence Nos. 2, 3, and 4 (including these various numbers), and the whole arguments, it is determined that the plaintiff's act of imposing franchiscis is likely to cause harm to fair franchise business transactions as an act of unfairly inflicting disadvantages on franchisees by taking advantage of transaction status. Therefore, the ground for disposition No. 2 of this case is legitimate, and the plaintiff's above assertion is not acceptable.

① The first franchise fee, fixed fee, raw material cost, call center cost, and advertising cost imposed on the Plaintiffs do not have any explicit provision on the franchise agreement of this case. As seen earlier, the first franchise fee and fixed fee under the franchise agreement of this case are not included in the Defendant’s specific service provision, and thus, cannot be immediately claimed for the payment of the Administration Fee without any specific provision on the basis of only the provision of this case’s contract of this case. As such, it cannot be deemed that a franchisee was anticipated to be able to unilaterally impose a specific amount compared to the sales amount without the basis of the franchise agreement, other than the first franchise fee, fixed fee, raw material cost, call center cost, and advertising cost.

② In full view of the aforementioned evidence and the purport of the entire oral argument, the Plaintiff announced on December 23, 2005 to the RGM NE, an internal computer network for posting the notice of the notice, that the Administration Fee shall be applied to 0.55% of its sales. On March 13, 2007, the Plaintiff announced that the Administration Fee shall be set at 0.55% of its sales, and on April 20, 2012, the Plaintiff announced that the Administration Fee shall be raised from 0.5% to 0.8% of its sales, including the Administration Administration Commission’s monthly sales cost to be borne by the franchisee on August 29, 2008, the Plaintiff announced that the Administration Administration shall bear 0.5% of the sales revenue of the franchisee, and that the Plaintiff notified the Administration Commission of the Administration Fee increase by 10.5% of the sales revenue of the franchisee and the Administration Fee increase by 20% of the Administration Fee.

However, solely based on the foregoing facts, it cannot be deemed that the intent of a franchisee was reflected in the burden of free trade. Since an information disclosure statement registered with the Fair Trade Commission is nothing more than providing information for the persons who intend to enter into a franchise agreement, it cannot be deemed that the contents stated in the information disclosure statement are immediately incorporated in the contract, and the “member store service fee” did not clearly state what services the “member store service fee” is the remuneration for the service. Moreover, there was no explanation on the method of calculation as to the materials that the Plaintiff provided to the franchise applicants in the business explanation meeting or the originalization. The Plaintiff notified several times by changing the rate of free trade, and there was no circumstance that the franchisees were specifically aware of the expenses incurred in relation to the addition of the expense items, the basis for calculating the rate, or that the Plaintiff voluntarily accepted the expenses and rates of free trade. Even if the franchisees received such information from the Plaintiff, it cannot be readily concluded that there was an intent to pay expenses not explicitly included in the franchise disclosure statement.

③ There is no evidence to deem that the Plaintiff had gone through a prior consultation with the franchise council representing franchisees at the time of the introduction of the Edrid or at the time of the change of the rate thereof, or had gone through a substantial consultation with the organization representing all franchisees. There is a fact that the Plaintiff consulted with the edrid about the imposition of the edrid and obtained consent thereto. However, on December 29, 2005, e-mail sent to the Plaintiff on December 29, 2005, e-mail stating that “It is difficult to determine the appropriateness of the e-mail because the e-mail itself is not specific, and it is difficult to determine whether the e-mail conforms to YW,” such as sending the Plaintiff an e-mail with the e-mail that it is difficult to determine whether the e-mail conforms to YW, and it seems that the Plaintiff had no choice but to pay the e-mail as requested by the Plaintiff. Accordingly, it is difficult to deem that the Plaintiff had obtained prior consultation with the e-mail and the franchisee.

(4) A superior position or at least a business entity in a position that may have a significant impact on the other party’s trade activities shall unilaterally make a decision favorable to himself/herself and enforce such decision to put the other party at a disadvantage in trade, and shall be prohibited. If the expenses incurred by the franchiser in purchasing agency, marketing, computer support, operation of the customer counseling room, etc. for the franchisees are not included in the initial franchise fee or fixed fee that the franchisee receives from the franchisee because it is not included in the first franchise fee or fixed fee that the franchisee receives from the franchisee, and thus, need to impose expenses corresponding thereto, even if the franchise agreement is entered into by reflecting the pertinent matter and requires procedures for obtaining legal basis, such as prior consultation with the franchisee by presenting specific evidence for calculating the necessity and cost, or obtaining consent from the franchisee, it is difficult to recognize legitimacy in itself. Furthermore, the Plaintiff and the franchisee have a big difference in their position or business ability between the parties to the trade, and the franchisee are fully dependent on the Plaintiff, such as mutual name, trademark, packing, design, and production of goods, and thus, are subject to support, education and control.

⑤ The Plaintiff provided special services that are different from other franchisors without attaching a certain amount of profit to raw and secondary materials, unlike the other franchisors of the Epic store brand, and thus, the Plaintiff imposed Epic volume as a proper level and method of sharing expenses. However, the Plaintiff already received the initial franchise fee, fixed fee, raw material cost, call center cost, and advertising cost based on a franchise agreement, and thus, even if the details of the specific services appropriated as Epic store are different, the Plaintiff’s portion to be appropriated for its own expense and the burden therefrom are not imposed on franchisees.

6. In comparison with other franchisers of branded stores, the place where a fee is charged for comparison of sales to franchisees is not verified separately from franchise fees on the grounds of purchase agency, marketing, computer support, operation of a customer counseling office, etc. In addition to franchise fees, the place where a fee is charged for providing administrative services to franchisees is not verified. There is no data that can be deemed that the collection of such royalty accords with normal transaction practices.

7) The disadvantage that a franchisee enters is not indicated in the franchise agreement without prior consultation or consent, and is itself the amount paid to the Plaintiff (excluding the case where a language agreement for the Administration Fee was made). As such, the amount is specified. Even if the Plaintiff gains profit from the franchisee by using the language so purchased as a buying agency, marketing, computer support, customer counseling room operation, etc., this is merely a profit accrued to the Plaintiff, the franchisor, which is a franchisor, and it is merely a profit that the franchisee, indirectly or indirectly, gains.

B. Whether the exception requirement under the proviso to Article 13(1) [Attachment 2] 3 of the Enforcement Decree of the Franchise Business Act is met

1) The plaintiff's assertion

The Plaintiff registered the franchise disclosure statement on August 29, 2008, and the Administration Administration constitutes the expenses incurred by the Plaintiff by providing services on behalf of the Plaintiff in order to protect the Plaintiff’s trademark rights and maintain the identity of goods and services, and thus, the Plaintiff’s act of receiving the Administration Administration after the registration of the franchise disclosure statement on August 29, 2008 falls under the proviso of Article 13(1) [Attachment 2] [Attachment 3] of the Enforcement Decree of the Franchise Business Act (hereinafter “this case’s exception clause”).

2) Determination

The instant exception provision stipulates that “in cases where it is objectively acknowledged that it is difficult to protect trademark rights of a franchisor and to maintain the identity of goods or services, the franchisor notifies the franchisee of the relevant fact in advance through an information disclosure statement and concludes a contract with the franchisee,” the exception to “influent provision.”

However, since the Plaintiff has already received franchise fees, such as the initial franchise fee, fixed fee, advertising fee, etc. from a franchisee pursuant to the franchise agreement, and thereby maintaining the identity of trademark rights and goods, it cannot be objectively acknowledged that if the Administration Fee is not permitted, it is difficult to protect trademark rights and maintain the identity of the goods, etc. In addition, it cannot be said that the Plaintiff’s purchase agency, marketing, CER operation, computerized support, and customer counseling room operation expenses imposed by Administration Fee are distinguishable from franchise fees, etc. specified in the franchise agreement. Even if such Administration Fee contributes to the protection of trademark rights and the identity of the goods, etc., it cannot be concluded that the Plaintiff’s protection of trademark rights and the maintenance of the identity of the goods, etc. are difficult without Administration Fee. Even if there is no Administration Fee, even if it is difficult to protect trademark rights and maintain the identity of the goods, etc. without Administration Fee, the exception clause of this case is a requirement for a franchisee’s conclusion with the franchisee, but the Plaintiff did not enter into a contract with Administration Fee (hereinafter referred to as “Administration Fee Agreement”).

Therefore, since the ground for Disposition No. 2 of this case cannot be deemed to fall under the exception clause of this case, the plaintiff's above assertion on a different premise cannot be accepted.

5. Whether the instant penalty surcharge payment order was unlawful

(a) Calculation of relevant sales;

1) The plaintiff's assertion

Considering the purport of the amendment of the Enforcement Decree of the Franchise Business Act, and the content of the application of the standards for related sales under the jurisdiction of the Defendant, the language and text of “related” under Article 34 of the Enforcement Decree of the Franchise Business Act is interpreted to include not only franchise business operators but also goods, services, or equivalent amounts. Therefore, the relevant sales should be calculated only for drids acquired by a franchisor, and the relevant sales are deemed to be in violation of the principle of proportionality by excessively losing the balance of the penalty surcharges imposed on the relevant franchisees as the relevant sales.

2) Determination

In light of the following circumstances, it is difficult to see that there was an error in calculating the Defendant’s related sales, and thus, the Plaintiff’s above assertion is without merit.

① According to Article 35(1) of the Franchise Business Act, Article 34 of the Enforcement Decree of the Franchise Business Act, and public notice No. 2.5(a) of the penalty surcharge, related sales, which serve as the basis of the instant penalty surcharge, are stipulated as “the sales of goods or services sold by the franchisor to the relevant franchisee or prospective franchisee during the period of violation or the amount equivalent thereto.” If the aforementioned statutes intended to limit the scope of “relevant goods or services or the amount equivalent thereto” by narrowing the scope of “relevant franchisees or prospective franchisees” rather than the meaning of “relevant franchisees or prospective franchisees,” the pertinent provision appears to read as “the sales of related goods or services sold by the relevant franchisor or prospective franchisees or the amount equivalent thereto during the period of violation,” and thus, the term “related” in the foregoing provision is construed as immediately as “a franchisee or prospective franchisee”

② According to Section IV.1.B., the standard of calculation of penalty surcharge is set by multiplying the relevant sales by the standard of imposition by the degree of the offense. If unjust enrichment is very small compared to the total sales, it is likely to be assessed low in the degree of gravity of the offense. On the contrary, if unjust enrichment is very large compared to the total sales, it is deemed that the higher standard of imposition is applied as the degree of gravity of the act. Ultimately, the specific standard of calculation of penalty surcharge is determined by reflecting the degree of the offense. In addition, even after the Defendant’s determination of the standard of calculation, the first adjustment (Adjustment based on the element of the act), second adjustment (Adjustment based on the element of the act), and the second adjustment (Adjustment based on the element of the act), the second adjusted standard of calculation reflects the financial situation of the franchisor or the actual ability reflecting the market and economic conditions, and the amount of the second adjustment standard of penalty surcharge is excessive compared to the amount of profits acquired by the relevant offense, the second adjustment standard of calculation may be adjusted. As such, since the penalty surcharge is calculated in a way corresponding to a violation.

③ Even if only the relevant sales amount claimed by the Plaintiff is interpreted, the sales amount is KRW 6,814,274,000 (the Plaintiff’s preparatory document dated July 5, 2017). Compared to the instant penalty surcharge of KRW 526,00,000, it is merely about KRW 7.7% of the Plaintiff’s profits, and thus, cannot be deemed as excessive in violation of the principle of proportionality.

④ Under the “Public Notice on Standards for Imposition of Penalty Surcharge on Business Entities Violating the Fair Transactions in Large Franchise and Retail Business,” the “Public Notice on Amendment of the Enforcement Decree of the Fair Transactions in Subcontracting Act,” and the “Public Notice on Amendment of the Enforcement Decree of the Act on Fair Transactions in Agency Transactions,” it is based on the calculation of penalty surcharge by multiplying the prices of supplied goods, subcontract consideration, and the prices of goods for which purchase was enforced by the ratio of the amount in violation. However, the Public Notice on the Penalty Surcharge in this case has different concepts, such as “the sales amount of goods or services sold to the relevant franchisee or prospective franchisee or the amount corresponding thereto,” which is based on the calculation of penalty surcharge after considering the concept of the relevant sales as “the relevant sales amount or the sales amount of services sold to the relevant franchisee or prospective franchisee,” and thus has different concepts

(b) Selection of commencement of investigation;

1) The plaintiff's assertion

Article 32 of the Franchise Business Act limits that the act of the defendant subject to investigation is not more than three years from the date of termination of the transaction. Thus, if a franchisee concludes a renewal contract with the plaintiff before May 26, 2012, which was three years prior to the date of commencement of the on-site investigation or concludes a new contract after ten years prior to the date of commencement of the first contract, the previous transaction should be excluded from the subject of investigation

2) Determination

Article 32 of the Franchise Business Act provides, “The franchise business that is subject to investigation by the Fair Trade Commission pursuant to the provisions of this Act shall be limited to franchise business transactions for which three years have not passed since such transactions were closed: Provided, That this shall not apply to franchise business transactions reported within three years since such transactions were closed.” The above provision is intended to seek legal stability between the parties and cope with issues arising from the loss of materials, etc. by limiting the scope to which three years have not passed since the transactions subject to investigation are terminated, and it is not intended to take into account whether certain periods of violations of franchise business transactions subject to investigation are subject to penalty surcharges. In determining whether they are subject to investigation, it is not subject to consideration whether a new contract was concluded before or after 10 years have passed since the conclusion of a new contract or renewal of a contract for ten years after the conclusion of the initial contract. Therefore, it cannot be viewed as “the termination of a transaction” at the time of the termination of a contract before the conclusion of a new contract. Therefore, the Plaintiff’s assertion is without merit.

6. Conclusion

Therefore, the plaintiff's claim seeking the revocation of the disposition of this case is dismissed as it is without merit, and it is so decided as per Disposition.

[Attachment 1] Corrective Order and Penalty Surcharge Payment Order: Omitted

[Attachment 2] Omitted

[Attachment 3] Relevant Statutes: omitted

Judges Yoon Sung-won (Presiding Judge)

1) 2.3 Fursuant to Clauses 2.1 and 2.2 Dominant for 2.3.3 Dominant, Dominant, Dominant, Dominant, Dominant of the Act on the Promotion of Maritime Affairs and Fisheries, and Dominated 1.1 and Dominant, Dominant, Dominant.