Franchising in Taiwan: Setting Rules for Opening Hours, Planned Closures and Emergency Shutdowns

When opening an existing business in Taiwan to franchising, franchisors often treat “business as usual every day” as a basic requirement, without explaining what happens during staff shortages, equipment failures or typhoons. Opening hours are not simply a matter of brand image: they directly affect franchisees’ staffing, costs and safety responsibilities. To build a stable franchise network, set out clear rules for deciding when outlets open and close, rather than waiting until an outlet shuts to assign blame.

1. Turn company-owned outlet practices into manageable requirements

Do not simply copy the flagship outlet’s opening hours. First, review transactions by time of day, staffing levels, preparation and closing tasks across existing outlets. Establish which trading periods meet genuine customer demand and which are only just sustainable because the founder has long been filling staffing gaps personally.

Trading requirements can be divided into three levels:

• Core opening hours: when a standard franchise outlet must serve customers, and whether it may have a regular day off.
• Exceptions by outlet type: whether shopping centre outlets, business district locations and street-front premises need different arrangements because of their setting.
• Extended opening options: who may propose them, whether approval is required, and who is responsible for additional staffing and support.

Also define whether “opening” means being ready to accept orders or staff beginning preparation, and whether “closing” means stopping new orders or completing the final order. If delivery platforms, booking services and walk-in customers have different cut-off times, specify these too. This prevents customers from being able to pay when the outlet can no longer fulfil their orders.

Before recruiting franchisees, ask outlet managers to draw up staff rotas against the proposed timetable, including cleaning, handovers and breaks. If an outlet can only meet the requirements by relying on the franchisee to cover shifts every day, reconsider those requirements rather than presenting a staffing shortfall as the passion an operator must bring to the business.

2. Disclose operating restrictions before the agreement is signed

Taiwan does have rules governing franchise transactions. The Fair Trade Commission has issued its Disposal Directions (Guidelines) on the Business Practices of Franchisors, addressing relevant conduct under the Fair Trade Act. Rights and obligations under franchise agreements also involve the Civil Code. These guidelines are not a franchise licensing or registration system.

Point 3 of the guidelines requires franchisors to provide material franchise information, including operating restrictions that apply during the contract term. The listed matters are not limited to mandatory purchasing arrangements. If a franchisor requires fixed opening hours, restricts closures or makes holiday trading compulsory, these should be treated as operating restrictions requiring advance disclosure, rather than added to a manual only after signing.

Information must be provided ten days before entering into a franchise relationship or a preliminary franchise relationship, within a period considered reasonable in the circumstances, or within a period agreed by both parties. Failure to provide the required information without justifiable grounds, where this is sufficient to affect trading order, constitutes a breach of Article 25 of the Fair Trade Act. The franchisor must also be able to prove that the information was provided.

In practice, applicants should receive the full timetable for their outlet type, the conditions governing closures and the consequences of failing to meet the requirements. If extended opening hours involve additional fees payable to the franchisor or a designated party, disclose the amount or an estimate. A blanket statement that the franchisee “must comply with all operational arrangements set by the franchisor” is no substitute for specific information.

3. Handle planned closures and emergency shutdowns separately

At a minimum, closure procedures should distinguish between planned events and unexpected incidents. They cannot use the same approval process.

Planned closures may include stocktaking, maintenance or the operator’s personal commitments. The application form should record the dates, reasons, affected orders, customer notifications and reopening plan. The franchisor should specify a response deadline, who grants approval and how to follow up if no response arrives on time, so outlets are not left repeatedly chasing a decision.

Emergency shutdowns include power cuts, equipment failures, suspected food safety incidents and other immediate dangers. A sensible rule is that, where personal or product safety is at risk, an outlet may stop the affected services first and then notify the franchisor through the designated channel. Waiting for approval should not be a reason to continue trading in unsafe conditions.

During typhoons, avoid blanket instructions to “remain open as usual”. Equally, do not mechanically treat government work-suspension announcements as a universal instruction for all private outlets to open or close. Franchisors should check applicable labour rules, measures imposed by the relevant authorities, premises restrictions and actual travel safety, and establish a decision-making process. Brand requirements cannot override statutory obligations.

Create a separate reopening checklist to confirm that equipment, safety, stock and outstanding orders have been dealt with before resuming in-person and online orders. Where an authority has issued an order, reopening must also meet the relevant requirements.

4. Establish a process for changing hours, rather than imposing them by notice

After launching a franchise network, a franchisor may wish to extend service hours as the local trading environment changes. However, additional hours create ongoing costs. The agreement should specify in advance who may propose changes, the factors to be assessed, how notice will be given and which changes require a separate agreement. The guidelines also identify the conditions and procedures for contract amendments as material information.

Start by gathering evidence of demand during the proposed hours and assessing the affected outlets’ staffing capacity. Then discuss whether to run a trial, with agreed conditions for reviewing and ending it. Do not treat a substantial change in trading obligations as a routine manual update, or assume that a franchisee’s failure to object immediately amounts to consent.

The franchisor should also coordinate customer-facing information. Assign responsibility for updating outlet notices, booking channels, delivery platforms and brand customer service information, as well as for contacting customers and dealing with orders already paid for.

Practical takeaway: Before recruiting franchisees, prepare an opening-hours schedule, a closure application procedure and an emergency shutdown checklist. Helping franchisees understand their everyday obligations and how exceptions are handled will do far more to maintain trust across the network than simply insisting that they “must comply with head office requirements”.