Delivery Platform Terms for Franchises in Taiwan: Checking Commissions, Refunds and Payment Responsibilities

When considering a food and beverage franchise in Taiwan, an established presence on delivery platforms is often a selling point. Yet more orders do not necessarily mean more cash available to the outlet. Before joining a franchise network, establish who signs the platform contract, who receives the payments and who bears the losses when orders are cancelled, customers are refunded or platform access is suspended. These questions should not be left until after opening.

1. Identify the platform contracting party, account holder and payment recipient

Delivery services within the same brand may be arranged through individual franchisees contracting directly with a platform, or through head office managing the relationship and collecting payments centrally. These arrangements carry different responsibilities. A salesperson’s assurance that “head office handles everything” is not enough to assess them.

Ask head office for a written explanation of the platform arrangements that will apply to your proposed outlet, and confirm each of the following:

• Contracting party: Is the platform contract signed by head office, the franchisee’s company or a separate management company?
• Account permissions: Who can change the menu, pause orders, opt into promotions and process refunds?
• Payment flow: Does the platform pay the franchisee directly, or pay head office first for onward transfer?
• Access to records: Can the franchisee download individual order details, itemised charges and refund records?

Where head office manages the arrangement centrally, you may not be able to obtain the full commercial agreement with the platform. However, you should at least receive the fee, settlement and liability terms relevant to your outlet. Screenshots of platform sales figures alone are not enough to verify actual income.

In particular, clarify whether the outlet must use designated platforms. Can it pause orders because of staff shortages or loss-making orders? If participation is compulsory, the restrictions should be explained before signing, rather than introduced through operating instructions after opening.

2. Calculate the net receipts from each order, not just the commission

When comparing brands, do not simply ask what percentage the platform takes. Ask head office to provide an anonymised order and its corresponding settlement record, showing the full calculation from the customer’s payment to the amount received by the franchisee.

Check platform service fees, payment processing fees, packaging costs, contributions towards promotions and any additional management or reconciliation fees charged by head office. The basis for calculating each fee should also be stated: is it the amount before discounts, after discounts or some other figure? Do quoted charges include tax? Which items may change with the platform’s service package?

Use the following framework rather than assuming every brand makes deductions in the same way:

Franchisee’s net receipts = order proceeds due to the outlet − platform and head office charges − refunds and other deductions borne by the outlet.

Net receipts are still not profit: ingredients, packaging, staffing and other operating costs must also be deducted. If franchise royalties cover delivery revenue, confirm how refunded orders and platform deductions affect the royalty calculation, so that you do not assess profitability using the wrong figures.

Where head office collects payments on your behalf, also agree the settlement cycle, payment dates, deadline for disputing reconciliation figures and whether undisputed amounts will be paid while a dispute is being resolved. Do not accept an arrangement that merely says payments will be “handled according to platform disbursements” without a notification and follow-up procedure.

3. Allocate responsibility for refunds and suspensions according to their cause

Delivery complaints may arise from missing items, preparation errors, delivery delays, platform system problems or incorrect settings made by head office. A blanket clause stating that “all refunds are borne by the franchisee” may shift risks beyond the outlet’s control onto the franchisee.

Before signing, ask for a table setting out how each type of problem will be handled. At a minimum, it should identify the responsible party, evidence required, appeals contact and allocation of costs. Refunds whose cause is unclear should be subject to provisional allocation and review, rather than being permanently deducted from the franchisee simply because the platform has charged head office.

Also confirm whether the outlet can access preparation times, handover records and the reasons for the platform’s decision. If only head office can appeal, agree how quickly it must notify the outlet after receiving a notice, and the deadline for submitting evidence. Otherwise, the franchisee may discover a deduction only after the opportunity to appeal has passed.

Suspension arrangements also matter. Establish whether a breach at one outlet could affect the entire brand account, and whether problems at other outlets could prevent your own outlet from accepting orders. The contract should specify notification procedures, assistance with reinstatement and how responsibility will be addressed. If a suspension results from head office’s management failings, also negotiate how the relevant management fees will be treated. These are protections to negotiate, not compensation automatically provided by law.

4. Use Taiwan’s disclosure rules to request written explanations

Taiwan does have rules governing franchising. The Fair Trade Commission’s Disposal Directions (Guidelines) on the Business Practices of Franchisors set out requirements for disclosing important franchise information. These include fees payable to head office or its designated parties during operations, restrictions within the franchise relationship, and the conditions for varying, terminating or rescinding the contract.

If head office requires a particular delivery platform arrangement involving mandatory fees, compulsory participation or centralised payment collection, ask it to explain these matters specifically under the relevant disclosure headings. The fact that a third-party platform collects a fee does not, by itself, place that fee outside franchise disclosure requirements. The actual transaction arrangements still need to be considered.

These guidelines are not a standalone franchise statute. Breaches of their relevant disclosure or contracting procedure provisions may constitute a violation of Article 25 of the Fair Trade Act where they are sufficient to affect trading order. Recovery of payments, contractual validity and damages must still be assessed under the contract, the Civil Code and the facts of the individual case. A Fair Trade Commission enforcement decision should not be understood as triggering an automatic refund.

Franchise transactions are generally not consumer transactions, so do not assume that the protections of the Consumer Protection Act apply. If the platform terms and franchise agreement allocate responsibilities inconsistently, have a lawyer familiar with Taiwanese commercial contracts review them before you pay.

Practical takeaway: Before signing, obtain a platform responsibility matrix, a sample order settlement calculation and a written agreement covering refunds and suspensions. Only when you can clearly answer “Who makes deductions, who provides evidence and when will I receive the money?” can you properly assess whether the delivery arrangement is worth taking on.