Yangpu District People's Court has ordered a Shanghai-based restaurant management company to return 120,000 yuan ($19,183) to a former franchisee, the court said Wednesday.

In its ruling, the court decided that the company should return the franchise fee to the plaintiff, a businesswoman surnamed Qi, even though she had signed a contract that stated that she would forfeit the fee if she broke the agreement.

In July 2011, Qi signed a contract with the company, which was not named, to open a crayfish restaurant franchise in Shijiazhuang, Hebei Province. To obtain her franchise, Qi paid a fee of 120,000 yuan and a deposit of 30,000 yuan. However, due to personal reasons, she never opened the business and decided to terminate the contract in December 2011. However, the company refused to refund the 150,000 yuan.

In February, Qi filed a lawsuit against the company to get her money back. According to the court, she acknowledged that she had broken the contract, but still asked the company to return the franchise fee.

The restaurant management company submitted the contract as evidence that they had no obligation to return the fee. Under the contract, Qi agreed to give up the deposit and the franchise fee under all circumstances.

Nonetheless, the court decided that 120,000 yuan fee was a royalty that allowed Qi to use the company's brand, technology and management system to operate the restaurant. Considering that Qi never opened the restaurant, the court ruled that she deserved to get her money back.

Global Times