Checking Franchise Store Numbers in Taiwan: Openings, Closures, Ownership Changes and Brand Stability

When choosing a franchise brand in Taiwan, asking how many stores it has across the island is only a starting point. The same store count could reflect stable operations or conceal frequent closures, ownership transfers or takeovers by head office. Before joining a franchise network, turn those headline numbers into dated, categorised and verifiable records. This will help you assess whether the brand’s expansion is supported by conditions that allow franchisees to keep trading sustainably.

1. Distinguish Current Disclosure Requirements from Additional Due Diligence

Taiwan does regulate franchising. The Fair Trade Act and the Taiwan Fair Trade Commission’s guidelines for handling cases involving franchisors’ business practices are key references for checking franchise disclosures. General legislation, including the Civil Code, also governs contractual performance and liability for breach.

Under the current guidelines, franchisors should provide seven categories of important information ten days before entering into a franchise or preliminary franchise relationship, or within a period considered reasonable in the particular case or agreed by both parties. Failure to provide this information without proper justification violates Article 25 of the Fair Trade Act where it constitutes clearly unfair conduct sufficient to affect the trading order.

However, do not treat the store-count disclosure list in older versions as a universally applicable current requirement. Previous versions listed franchise store numbers, addresses and statistics on contract termination or rescission. The current seven categories do not separately specify a nationwide store list or the previous year’s contract termination rate as mandatory disclosures. They do include operating arrangements or planned developments within the same franchise system in the franchisee’s trading area, which is not the same thing.

You can therefore request records of store changes across Taiwan as a condition of choosing a brand. However, you should not conclude that a franchisor has broken the law simply because it has not supplied a complete list of closures. If it makes specific promotional claims about store numbers using inaccurate information, this may raise separate issues under the Fair Trade Act concerning false or misleading representations. That still requires an assessment of the facts.

2. Request a Store Change Log, Not Just a Total

When requesting information from head office, specify the reporting cut-off date and the period covered so that you do not end up comparing figures from different months. Ideally, obtain store lists for both the start and end of the period, together with a record of changes at each store during that period, rather than accepting a single total on a presentation slide.

Ask for the change log to include these fields:

• Store identification: Store name, address, original opening date and current status.
• Operating model: Company-owned, franchised or another partnership model, with locations still being prepared listed separately.
• Changes during the period: New opening, permanent closure, temporary closure, relocation or rebranding.
• Changes of operator: Transfer to another franchisee, takeover by head office or conversion from company-owned to franchised.
• Record dates and notes: When the status was confirmed and how each category was defined.

Ask head office to explain what it counts as ‘one store’. Department store concessions, pop-up shops, delivery-only locations and full-service premises operate under different conditions and should not be combined without explanation. Signed-up locations that have not yet opened should also be distinguished from stores already trading.

If head office has personal data concerns, it can initially provide store addresses, anonymised store identifiers and types of change. You do not need to request franchisees’ private contact details. This preserves the information’s analytical value while reducing unnecessary data collection.

3. Cross-Check Public Records and Flag Uncertainties

Start by matching each location on the brand’s official website or store finder against the change log. Then spot-check stores across different regions, opening dates and formats. Checking only flagship stores can leave you unaware of conditions at ordinary franchise outlets.

Useful sources include opening and closure announcements on stores’ public social media pages, shopping centre directories, and company or business registration records. Each has limitations, however: a ‘permanently closed’ label on a map may be wrong; an active registration does not prove that a store is still trading; and one registered entity may operate several stores.

Visiting or phoning a store can help establish its current status, but one unanswered call is not enough to conclude that it has closed. Record the date of each check, what you found and any outstanding questions, and ask head office to explain discrepancies in writing.

In particular, link relocations to the corresponding closure of the old premises and opening of the new ones to avoid double-counting. If a store retains its name but changes operator, keep the ownership-transfer flag in your records. A store that is still open is not proof that its original franchisee has been successful throughout.

4. Turn Patterns of Change into Questions Before Signing

The most basic check is whether the opening store count, plus new openings and minus permanent closures, reconciles with the closing count. Relocations, changes of store format and changes in the scope of the figures need separate explanations. Company-owned and franchised stores should also be counted separately; otherwise, takeovers by head office may conceal a decline in franchise store numbers.

Do not invent a ‘safe closure rate’. Brands of different ages, store formats and observation periods cannot be compared directly. Many stores in a newer network may only recently have opened and may not yet have faced a full lease term or a renewal decision. A rate is only useful if its denominator, reporting period and classification method are clear.

Then ask follow-up questions based on the patterns you find:

• If new stores change hands soon after opening, could this relate to site selection, funding needs or operational workload?
• Are closures concentrated in a particular store format or region? Would your proposed store face similar conditions?
• Where head office has taken over several stores, is this a temporary arrangement or an ongoing operation? Do not assume it amounts to a guaranteed buyback.
• If franchised stores are declining while company-owned stores are increasing, how will head office support existing franchisees?

Label the reasons given by head office as its explanations, rather than treating them as established facts. Closure does not necessarily mean business failure: leases, health or family circumstances may be involved. Equally, remaining open does not prove profitability. If the figures consistently fail to reconcile, postpone any irreversible payments or contractual commitments.

Practical takeaway: Before signing, obtain a dated store list that distinguishes company-owned and franchised outlets and records openings and other changes. Then check the locations most comparable to your proposed store. Store numbers are a starting point for verification, not proof of profitability. A clear explanation of changes matters more than a claim to have a large network.