Pay Rises Alone Struggle to Retain Staff in Taiwan’s Franchise Sector, TCFA Survey Suggests

The staffing challenge facing Taiwan’s franchise sector is not simply whether businesses can recruit, but whether new employees stay. According to a report published by Wealth Freedom (財富自由) on 18 October 2026, a joint survey by the Taiwan Chain Stores and Franchise Association (TCFA) and the Institute for Information Industry’s Digital Transformation Research Institute found that around three-quarters of responding businesses had increased pay and benefits. However, it found no significant association between higher pay and employee retention. How work is organised and workloads reduced has therefore become an operational issue worth revisiting for both franchisors and individual outlets.

Pay rises have not resolved retention problems

This year, TCFA partnered with the Institute for Information Industry’s Digital Transformation Research Institute for the first time to survey labour shortages among chain businesses. The association has more than 160 chain headquarters as members, spanning supermarkets, convenience stores, restaurants, breakfast outlets and cafés, as well as estate agencies, hair and beauty businesses, and private tuition providers.

Citing the survey, the report said that nearly half of new employees leave within six months of joining. Even businesses willing to improve pay and benefits may struggle to retain staff through better remuneration alone. The report identified long hours, physically demanding work and management pressure as barriers to young people entering service-sector jobs, leaving businesses able to recruit but unable to retain staff.

However, the absence of a significant association between pay rises and retention does not mean that higher pay has no value. For franchise operators, the finding is better understood as a reminder: remuneration is only one part of staffing strategy and cannot replace a review of actual workloads and management practices.

Staff shortages are already affecting opening hours

The survey found that 98.8% of responding chain businesses faced staff shortages. More than 80% rated their shortages as moderate or worse, while 57% had experienced them for over a year. For many businesses, recruitment is therefore an ongoing operational challenge rather than a short-term exercise in filling vacancies.

The effects are already evident in day-to-day operations, including excessive workloads, difficulties maintaining normal rotas and, for nearly 30% of respondents, enforced reductions in opening hours. For outlets that rely on shift work to maintain service, reliable staffing directly determines whether planned opening hours are achievable.

Assessing a franchise outlet’s operating capacity should therefore involve more than its projected headcount. How opening hours will be covered, how much work existing employees will carry and how service will be maintained after someone leaves are also worth discussing before opening. These are operational questions prompted by the survey findings, not retention measures whose effectiveness the report has established.

From adding staff to redistributing work

TCFA Secretary-General Hung Ya-ling believes that the key competitive factor for chain businesses over the next decade will be workforce resilience rather than employee numbers. She argues that businesses need to move beyond the traditional focus on how many people they recruit and towards redesigning how work is divided and organised.

Examples cited in the report include the widespread use of self-service ordering kiosks in fast-food restaurants and the introduction of shorter, segmented shifts in retail outlets. These approaches address service processes and working-time arrangements respectively, offering alternatives to continually adding full-time staff.

These examples do not mean that the same arrangements will suit every brand. Nor does the report provide figures for implementation costs, improvements in retention or payback periods. It would therefore be premature to conclude that buying equipment or changing shifts will resolve labour shortages. Franchisors still need to assess which tasks can be redistributed, based on each outlet’s services and actual staffing needs.

Prospective franchisees should ask about staffing support

For entrepreneurs considering a franchise in Taiwan, the survey is a reminder that a brand’s support should extend beyond recruitment before opening. During discussions, prospective franchisees can ask how head office helps outlets organise rotas, train new recruits and maintain day-to-day operations when employees leave.

Existing franchisees could start by reviewing when new recruits tend to leave, workloads during busy periods and difficulties with shift scheduling, before discussing possible improvements with head office. This is a practical assessment approach, rather than a solution whose results have been validated by the survey.

Practical takeaway: replace the question ‘How many people can we recruit?’ with ‘How can we make the work manageable and encourage people to stay?’ When assessing a franchise opportunity, look beyond the pay budget and ask what specific support head office provides for staff training, workflows and shift scheduling.