Taiwan figurine franchise firms fined NT$800,000 over misleading ‘NT$1 million a month’ claims

Taiwan’s Fair Trade Commission (FTC) approved penalties on 28 October 2026 after finding that Fadou Cultural and Creative and Fortune Goddess had used misleading ‘NT$1 million a month’ claims to recruit franchisees for a 3D-printed figurine brand. The companies were fined NT$600,000 and NT$200,000 respectively. For prospective franchisees, the case underlines not only the importance of checking income figures, but also of establishing whether a brand’s business centres on selling products or recruiting franchisees.

Financial records did not support the ‘NT$1 million a month’ claim

According to Liberty Times’ finance section, the two companies published promotional videos on social platforms including YouTube and TikTok. In the videos, Fortune Goddess’s company representative and Fadou Cultural and Creative’s operator jointly made claims such as ‘earning NT$1 million a month in Taiwan selling just one type of figurine’ and ‘earning NT$1 million a month is no problem’. Viewers were directed to LINE groups to enquire about joining the franchise.

After cross-checking financial transactions and accounting records, the FTC found that the franchise outlet had achieved neither monthly profit nor turnover of NT$1 million as claimed in the videos. It ruled that the figures were inflated and fabricated, breaching Article 21, paragraph 1 of the Fair Trade Act, as applied under paragraph 4 of the same article.

The penalties addressed discrepancies between specific advertising claims and the actual accounts, rather than any assumption that high earnings were impossible. The FTC said franchise recruitment advertising may highlight a track record of profitability, but the figures must be supported by objective facts and a reasonable basis.

Promoters receiving commissions share responsibility as advertisers

The FTC noted that Fortune Goddess did more than publish videos on its social media channels. It also channelled enquiries and secured sign-ups through LINE groups, collecting referral commissions from franchisees attracted by the adverts. Its commercial interests were therefore closely aligned with those of Fadou Cultural and Creative.

The FTC found that both parties had used fabricated turnover figures to persuade prospective franchisees to enter into contracts, making them jointly responsible as advertisers under the law. The case therefore concerned not only the franchisor’s marketing, but also a partner company involved in promotion, sign-ups and commission collection.

When assessing franchise opportunities, prospective investors should look beyond the brand name and establish the roles of the video publisher, the person handling enquiries and the party receiving payments. Social media presentations alone are not a sound basis for a decision.

FTC questions whether profits came from the core business

The FTC stressed that franchising should centre on transferring business know-how and helping franchisees operate their core business. Its investigation found, however, that Fadou Cultural and Creative placed a heavy emphasis on revenue-sharing arrangements such as franchise referral fees. Much of the high profit it claimed also came from commissions for recruiting others to join the franchise.

In the FTC’s view, using misleading advertising to build profits around the continuous recruitment of new franchisees, rather than providing substantive help with running a figurine retail business, departed from normal franchising practice. Such an approach can encourage franchisors to neglect their support obligations, increase franchisees’ business risks and undermine trust across the franchise sector.

Clarify income sources and financial definitions before signing

The FTC urged prospective franchisees faced with adverts promising ‘high profits’ or ‘NT$1 million a month’ to assess carefully whether the franchisor’s financial information is accurate and reasonable, rather than rushing to invest.

In practice, prospective franchisees should ask for a clear distinction between turnover, profit after costs and commissions earned from referring new franchisees, backed by records they can verify. Whether product sales can sustain an outlet’s day-to-day operations is a separate question from how much income franchise recruitment generates.

Practical takeaway: before signing, verify the figures and income sources, then establish what business know-how and ongoing support the franchisor provides. Do not treat a promise of ‘NT$1 million a month’ as a basis for investment.