The verdict of the Intermediate People's Court of Foshan City, Guangdong Province is as follows:

Civil Judgment

(24) Fo Fa Min Er Zai Zi No.15

Protesting organ: Guangdong Provincial People's Procuratorate.

Appellant of the original second instance (defendant of the first instance): Yang Sufang, female, born on August 25th, 1968, Han nationality, living in Room 62, Block D, Yifu Square, Huang Qi Town, Nanhai District, Foshan City.

Appellee of the original second instance (plaintiff of the first instance): Gan Yuyuan, male, born on March 15th, 1958, Han nationality, from Taipei City, Taiwan Province Province, living at No.15, Section 2, Changsha Street, 24 adjacent to Wanhua Caiyuan Village, Taipei City.

Authorized Agent: Liu Shixian, lawyer of Guangdong Tonglida Law Firm.

Defendant in the original trial: Zhang Jialin, male, Han nationality, from Taiwan Province, with unknown address.

the civil judgment (No.29 (22) of the Zhang Jialin, Yang Sufang and Gan Yuyuan on May 6, 23 has come into legal effect. Yang Sufang refused to accept the judgment and applied to the procuratorate for a protest. On July 14th, 24, Guangdong Provincial People's Procuratorate filed a civil protest with Guangdong Higher People's Court, and on August 16th of the same year, Guangdong Higher People's Court ordered our court to retry the case. Our college formed a collegial panel separately and held a public hearing on February 28, 25. Yang Sufang, the entrusted agent of Gan Yuyuan, Liu Shixian attended the lawsuit in court. Prosecutors Xu Xia and Qian Fangyuan of Foshan Municipal People's Procuratorate appeared in court to support the protest on behalf of the protest organ. Zhang Jialin, whose address is unknown, did not appear in court to participate in the lawsuit after being summoned by public announcement, and our court conducted a trial by default according to law. The case has now been closed.

The retrial found that in 1998, Yang Sufang applied for the business license of Huangqi Tea Yan Guan She Foam Tea House (hereinafter referred to as Huang Qi Tea House) from the industrial and commercial department in Huang Qi, Nanhai at the request of her relative Zhang Jialin. On August 18th, 1999, Zhang Jialin and Huang Qi Teahouses (Party A) and Gan Yuyuan (Party B) signed the "Tea Words Guanshe Taiwan Province Foam Tea House Franchise Contract" and "Commodity Supply Contract". As stipulated in the franchise contract, Party A has the design patent right of the name, exterior design and interior furnishings of the "Tea Talk and View House" store and the unified management right of operation, technology, training and service, and Party B, as a franchisee, opens a branch in Fangcun, and Party A charges 6, yuan for patent use; Before starting business, Party B must receive the training from Party A, and the raw materials and technologies used in the business shall be provided by Party A, and all the articles such as packaging, labels and clothing shall be in the styles specified by Party A, so as to unify the "tea talk"; The contract is valid for two years; In addition, the contract also stipulates other rights and obligations, liability for breach of contract and other provisions. The Commodity Supply Contract makes specific agreements on the supply of raw materials for both parties. On the same day, Gan Yuyuan paid NT$ 5,. On August 24th, Gan Yuyuan and Zhang Jialin made a supplementary agreement: Gan Yuyuan will hand over RMB 3, to Zhang Jialin, and Zhang Jialin will be solely responsible for the opening of a franchise store in Fangcun by Gan Yuyuan. The first payment for raw materials supplied by Zhang Jialin must be paid on arrival, and will be paid on the 25th of each month. In September, Gan Yuyuan paid 23, yuan to Zhang Jialin, and Zhang Jialin prepared to open a shop for Gan Yuyuan. At the beginning of October, Zhang Jialin delivered the branch, and Ganyuyuan started business and bought raw materials from Zhang Jialin. On November 5th, Zhang Jialin and Huang Qi Teahouses issued receipts, respectively confirming that they had received the decoration fee, purchasing fee and miscellaneous fees of RMB23,, and the expenses of joining the club and making money instruments of NT$ 5,. In mid-November, Fangcun branch stopped operating due to the inability to apply for a business license and other reasons. During this period, * * * purchased raw materials of RMB 7,285.5 from Zhang Jialin, and paid RMB 222, with the balance of RMB 7,63.5 unpaid. On April 5, 2, Gan Yuyuan sued, requesting to confirm that the franchise contract was invalid, and demanding that Yang Sufang and Zhang Jialin return the franchise fee, organization fee and decoration fee, totaling RMB 222,3.5 and NT$ 5,, and compensate some economic losses of about RMB 21,211.7. After the judgment of the first instance came into effect, Yang Sufang applied to the court of first instance for retrial on the grounds that the judgment procedure was illegal. During the retrial, Gan Yuyuan partially changed the litigation request, requesting Yang Sufang and Zhang Jialin to return RMB 222,936.5, NT$ 5,, and compensate economic losses of RMB 21,211.7. Gan Yuyuan also reached an agreement with Yang Sufang on the items that Gan Yuyuan should return to Fangcun Branch, with a total value of 37,661.8 yuan.

The court of first instance held that franchising means that the franchisor grants its own trademarks, trade names, products, proprietary technologies and business models to the franchisee in the form of franchise contracts. The franchisee shall, in accordance with the regulations, engage in business activities under the unified business model of the franchisor and pay the corresponding fees to the franchisor. Franchising has the characteristics of unified image and unified management. The franchise contract signed by the plaintiff and the defendant conforms to the above characteristics, so it should be regarded as a franchise contract. The defendant argued that the contract was a contract for individual industrial and commercial households to transfer their names, but the transfer of names was only one aspect of the contract, and the defendant's reply did not reflect the whole picture of the contract and was not adopted. According to the provisions of the former Ministry of Internal Trade, the franchisee must meet the following requirements: having an independent legal person qualification, having registered trademarks, trade names, patents and unique and teachable management techniques or know-how, having good business performance in a certain period, having certain business resources, and having the ability to provide long-term business guidance and services to the franchisee. These regulations are aimed at maintaining the healthy and sustainable development of the chain operation industry, standardizing the behavior of franchisees and protecting the legitimate interests of franchisees. The two defendants are natural persons, and they take Huang Qi Teahouse (individual industrial and commercial households) as the head office of chain operation. The Huang Qi Teahouse does not have the qualification of head office as stipulated in the above regulations at all, nor does it have the ability and resources necessary for long-term development. Therefore, the franchise contract signed between the defendant and the plaintiff should be deemed invalid. The two defendants should return the joining fees and other funds collected by the plaintiff, and the purchased items should be borne by the defendants themselves. The plaintiff failed to examine the defendant's business qualification, which was also at fault for the invalidity of the contract. The amount of raw materials used by the defendant shall be deducted from the amount returned by the defendant. The expenses incurred by the plaintiff for opening a franchise store shall also be borne by the plaintiff. According to Article 58, paragraph 1 (5) and Article 61, paragraph 1 of the General Principles of the People's Republic of China and the Civil Law, the judgments are as follows: 1. Confirm that the franchise contract and commodity supply contract signed by the plaintiff Gan Yuyuan and the defendants Zhang Jialin and Yang Sufang are invalid; 2. Defendants Zhang Jialin and Yang Sufang shall return RMB 222,3.5 and NT$ 5, to the plaintiff within 1 days from the date when this judgment becomes legally effective; 3. Reject the plaintiff's other claims. The acceptance fee of this lawsuit is 8214 yuan, which is 648 yuan for the plaintiff and 7566 yuan for the two defendants. The counterclaim acceptance fee is 143.5 yuan, which shall be borne by the two defendants.

after the judgment of first instance came into effect, Yang Sufang refused to accept it and applied to Nanhai District People's Court of Foshan for retrial. The People's Court of Nanhai District, Foshan City held that the two defendants in the original trial were natural persons, and they recruited franchisees with Huang Qi Teahouse (individual industrial and commercial households) as franchisees, which did not meet the requirements stipulated by China's Ministry of Internal Trade as franchisees, so the franchise contract signed by the defendants in the original trial was invalid. The two defendants in the original trial should bear the main responsibility for the invalidity of the contract, and the joining fee and other funds collected by the plaintiff in the original trial should be returned. Zhang Jialin, the defendant in the original trial, is the actual operator of Huang Qi Teahouse, and should be directly liable for repayment. Yang Sufang, the defendant in the original trial, is the owner of Huang Qi Teahouse, who handed over the store to Zhang Jialin for actual operation and should be jointly and severally liable for the debts in this case. Yang Sufang argues that the franchisor is Zhang Jialin Heyan Guanshe Taiwan Province Foam Tea House, which has nothing to do with Huang Qi Tea House. After investigation, the franchise contract, commodity supply contract and receipt all have the official seal of Huang Qi Tea House, while the operator of Huang Qi Tea House's business license is Yang Sufang, so its defense reason cannot be established. The plaintiff in the original trial failed to examine the qualification of Huang Qi Teahouse as a franchisor, which was also at fault for the invalidity of the contract. It had used the raw materials of the defendant in the original trial, and the unpaid part should be deducted from the money returned by the defendant in the original trial. At the same time, the expenses incurred by the plaintiff in the original trial for opening a franchise store should also be borne by the plaintiff in the original trial. The plaintiff in the original trial should also return the goods purchased by the defendant in the original trial for opening Fangcun branch to the defendant. The original judgment violated legal procedures and should be corrected. Zhang Jialin, the defendant in the original trial, refused to appear in court without justifiable reasons after being legally summoned, and made a judgment by default according to law. According to Article 6 of the Measures for the Administration of Commercial Franchise (Trial), Article 58, Paragraph 1 (5) and Article 61 of the General Principles of the Civil Law of the People's Republic of China, and Articles 13 and 184 of the Civil Procedure Law of the People's Republic of China, the judgment is as follows: 1. The South Economic Zone (2) of Nanhai District People's Court of Foshan City is revoked. Second, maintain the third item of the civil judgment of Nanhai District People's Court of Foshan City (2) No.795-1; 3. Zhang Jialin, the defendant in the original trial, shall return RMB 222,936.5 and NT$ 5, to Gan Yuyuan, the plaintiff in the original trial, within the legal effect of the judgment; 4. Yang Sufang, the defendant in the original trial, was jointly and severally liable for the above debts; Five, the plaintiff in the original trial, Gan Yuyuan, should return the items listed in the schedule to the two defendants in the original trial within 3 days from the date when this judgment becomes legally effective. The acceptance fee of the original trial was 8214 yuan, and the appraisal fee was 5 yuan, of which 438.64 yuan was borne by the plaintiff Gan Yuyuan, and 7775.36 yuan was borne by the defendants Zhang Jialin and Yang Sufang, and the appraisal fee was 5 yuan.

yang sufang refused to accept the retrial judgment of the first instance and appealed to our court. The trial in the second instance of our hospital held that the franchise contract was a franchise contract in terms of the rights and obligations between the two parties, so this case was a franchise contract dispute. In this case, Yang Sufang and Zhang Jialin are natural persons, and they recruited franchisees with individual industrial and commercial households Huang Qi Teahouse as franchisees, which obviously did not meet the requirements of the State Administration for Industry and Commerce and the former Ministry of Internal Trade on the franchisee. Although the franchise contract violates the regulations of ministries and commissions in the State Council, it does not violate the provisions of laws and administrative regulations. However, the current laws and administrative regulations cannot exhaust all the situations of the contract, but are more regulated by the regulations of ministries and commissions. Therefore, the franchise contract cannot be deemed to be valid simply because it does not violate the provisions of laws and administrative regulations, but should be linked with the provisions of laws and administrative regulations to analyze and judge the effectiveness of the above contract. Based on this, the franchise contract is invalid. Yang Sufang and Zhang Jialin are mainly responsible for the invalidation of the contract, and their joining fees and other payments should be returned to Gan Yuyuan. However, Gan Yuyuan signed a franchise contract with Huang Qi Teahouse without examining whether it is a franchisee, which is invalid and also at fault. Therefore, the expenses incurred by him in opening a franchise store should be borne by him, and the unpaid amount of used raw materials should be deducted from the money returned by Yang Sufang and Zhang Jialin. In addition, Gan Yuyuan will also return the items purchased by Yang Sufang and Zhang Jialin to open a Fangcun branch. As for the question of whether Gan Yuyuan's entrusted agent qualification is qualified. During the second trial, Gan Yuyuan has gone through the notarization procedures according to legal procedures, and entrusted Liu Shixian and Liu Jia as entrusted agents, proving the agency authority and confirming the behavior of the entrusted agent within the scope of authorization, so his agent qualification is qualified. To sum up, Yang Sufang's appeal is unreasonable and should be rejected. The retrial in the first instance found that the facts were clear and the applicable law was accurate and should be maintained. According to the provisions of Item (1) of Paragraph 1 of Article 153 of the Civil Procedure Law of the People's Republic of China, the judgment: the appeal is dismissed and the original judgment is upheld. The acceptance fee for the second-instance case is 8214 yuan, which shall be borne by Yang Sufang.

according to yang sufang's application for retrial, the people's procuratorate of Guangdong province lodged a protest with the Guangdong higher people's court with the protest letter of Guangdong Jian min kang zi (24) No.396. The procuratorial organ protested that it was wrong for the final judgment to determine that the contract was invalid according to administrative regulations. According to article 52 of the contract law and the Supreme People's Court's "on the application of <; Contract law > The provisions of Article 4 of the Interpretation of Several Issues. If the final judgment determines that the contract is invalid according to laws or administrative regulations, it shall specify the basis of laws or administrative regulations. Article 124 of the Contract Law stipulates that the general provisions of this law shall apply to contracts that are not expressly stipulated in this law or other laws, and reference may be made to the specific provisions of this law or the most similar provisions of other laws. The franchise contract involved in this case is an unnamed contract that is not clearly stipulated in the specific provisions of the contract and other laws. However, the contents of the rights and obligations stipulated by both parties involve the technical secret technology transfer and patent licensing contract in the Contract Law, which should be handled according to the above similar contracts.

The retrial of our court holds that Article 9 of the Contract Law of the People's Republic of China stipulates that the parties shall have corresponding capacity for civil rights and capacity for civil conduct when concluding a contract. From the nature of the franchise contract and the purpose of signing the contract, the licensor of the franchise contract should have unique and teachable management technologies such as registered trademarks, trade names or products, patents, good business performance and certain business resources, and be able to provide long-term business guidance and services to the franchisee. However, the licensor in this case, Huang Qi Teahouse, is an individual business with 6 employees and a capital of only 5, yuan. At the time of signing this agreement, it has not obtained the trademark registration certificate, and it does not have good business performance and the ability to provide guidance to the licensee. Therefore, Huang Qi Teahouse does not have the necessary capacity of the licensor of the franchise contract. Because the subject of the contract is not qualified, the Franchise Store Contract and the Commodity Supply Contract shall be invalid according to law. The original trial correctly identified the nature of the contract and properly divided the fault responsibilities of both parties, which should be maintained; However, according to the regulations of ministries and commissions, the contract is found to be ineffective and should be corrected. The protest reason of the protest organ is not sufficient, and our court will not support it. On this basis, after discussion and decision by the judicial committee of our hospital, according to the provisions of Article 184 of the Civil Procedure Law of the People's Republic of China, the judgment is as follows:

Maintain the civil judgment of our hospital (22) No.29 of Fo Fa Min Er Zhong Zi.

this judgment is final.

presiding judge Huang Xuehu

acting as judge Jiao Yan

acting as judge Huang Wei

April 22nd, 25

Bookkeeper Huang Zhimin.