Formosa Chang

Street food stall

Formosa Chang's founder, Chang Yan-chuan (Chinese: 張炎泉), was a carpenter from Yunlin County. After moving to Taipei in search of work, he switched to the food industry upon being confronted with the effects of industrial automation, which had reduced his income.^[1][2] In 1960, Chang began operating a street food stall called Shuanglian Minced Pork Rice (Chinese: 雙連魯肉飯) in Shuanglian Market (Chinese: 雙連市場) on Minsheng West Road.^[1][3][4] Offering traditional Taiwanese snacks such as minced pork rice and braised pig's trotters, it was located across from the Shuanglian [zh] police substation [zh] for around a decade.^[5] Owing to a road widening, Chang relocated his stall in 1971 to Ningxia Road near the Chien-Cheng Circle.^[1][5] At that location, business steadily grew, allowing Chang to raise five children.^[5][6] Chang's stall initially also served salty porridge and tube rice pudding. After observing that glutinous rice is hard for people's digestive systems, he chose to offer only minced pork rice to customers.^[4] In 1975, Chang's home was razed by a fire of unknown origin, destroying all of Chang's family's possessions except for the clothes they wore, some tableware, and the cart they used for their street stall.^[7]

Early in the stall's history, the head chef of the famous restaurant Café Werthers [Wikidata] ate there and criticized the minced pork rice dish, saying, "What kind of minced pork rice is this? How dare you sell something like this?" Chang did not know the man's identity but asked him what minced pork rice would taste good. The chef gave Chang three tips, "The rice should be freshly harvested, the meat should be sliced, and the soy sauce should be pure brewed." For three years, the chef ate at Chang's stall and gave him tips about how to improve the dish.^[4] Chang did not learn the man's identity until numerous years later when he attended the man's wedding where his fellow guests included well-known restaurant chefs.^[4][8]

Each day, Chang and his wife woke up at 12:30 pm to make the food. At 5 pm, they got their stall ready and labored until 2 am. After buying the next day's ingredients at 4:30 am, they went to bed.^[9] Their son, Chang Yung-chang (Chinese: 張永昌), observed that his parents were criticized for disturbing the neighbors' sleep when bringing their cart back at night.^[2][9] Starting when he was six years old, he had started working alongside his father at the stall. When he finished school for the day, he took dishes to diners and cleared off the tables.^[9] Up until he joined the military, Chang Yung-chang and his family spent 20-hour days at the stall.^[10] Upon finishing his service in the military, Chang Yung-chang advised his father that it was not the best use of time to do 12 hours of preparation every day to accomplish eight hours of serving customers.^[9] Pushing equipment weighing dozens of kilograms was physically exhausting.^[10] He told his father he planned to switch careers if his father did not relocate their shop to a legitimate store space.^[9] The father and son had a difference of opinion about this for two years as the father felt that a rent of NT$80,000 (US$2,864) was too risky.^[10] Although the older Chang called his son a "beggar with ambitions", he begrudgingly consented after the hardware store behind their stall shut down in 1979.^[9][10]

First branch and McDonald's influence

In 1979, the older Chang established the restaurant's first branch at the storefront at Ningxia Night Market, sharing the space with another stall.^[1][10] The Changs paid a monthly rent of NT$40,000 (US$1,432) for the space. This allowed them to begin serving lunch which attracted nearby residents and workers to patronize the business.^[9] When they had operated a stall, their daily revenue ranged from NT$7,000 to NT$8,000 (US$251 to US$286). Daily revenue with the new storefront grew to NT$12,000 (US$430) in three months and surpassed NT$25,000 (US$895) in six months. After a year, Chang ended the partnership with the other stall, renting the entire venue.^[10] After the business improved, the restaurant began operating for the entire day.^[9] With the move to a storefront, they transitioned from preparing meals in a home kitchen to preparing them at a central production facility.^[11]

As a guest at a wedding reception at the seafood restaurant Hai Pa Wang [zh], Chang Yung-chang found that it had air conditioning, which kept diners comfortable while eating. Inspired by this, he convinced his father to put in fans at Formosa Chang.^[6] In 1983, Chang spent several hundred thousand New Taiwanese dollars to install air conditioning and to receive ISO certification.^[9] Daily revenue increased to NT$100,000 (US$3,580) one year after the installation.^[10] McDonald's opened its first branch in Taiwan in 1984 and greatly influenced the local dining scene.^[1] The chairman of Hsin Tung Yang, a friend of Chang's father, frequently ate at the Changs' stall, and encouraged them to learn from McDonald's.^[10] Chang reviewed McDonald's operations and was fascinated by how McDonald's did not have a greasy atmosphere.^[9] He and his father traveled between 30 and 40 times to McDonald's to observe how the business operated.^[11] Galvanized by McDonald's corporate practices, he resolved to revamp the family business through implementing business management strategies. By 1986, the Ningxia Road restaurant had undergone a rebranding to be modeled like McDonald's but serve Taiwanese snacks. The restaurant emphasized good customer service, a roomy and well-lit layout, an illuminated menu, disposable utensils, and soup containers made from aluminum foil. The restaurant started a factory to produce snacks that were pre-cooked, allowing diners to save time by just having to reheat the snacks.^[1]

Corporate branding, founder's death, and competition

Chang started the Formosa Chang brand in 1986 and registered the name with the Ministry of Economic Affairs.^[10] He put in place corporate branding including for the restaurant's receipts, chopsticks, napkins, and employee uniforms.^[11][12] Chang became the company's chairman in 1986 and that year the company introduced profit sharing for employees.^[4][5] He created operations manuals for each aspect of preparing food such as how much each minced pork rice bowl would weigh, how much time it would take to blanch vegetables, and the exact seasoning needed for dishes like bamboo shoots and braised pig's trotters. The aim was to enforce consistency in the quality and serving time.^[12] The company set a goal to serve each dish within 59 seconds of the customer's placing their order.^[13] Chang's attempt to redesign all the branches in the style of Western fast food was unsuccessful. After one year, he decided to retain fast food's reliable and efficient standard but keep Taiwanese cuisine's familiarity.^[11]

The company Formosa Chang Fast Food Co., Ltd. (Chinese: 鬍鬚張速食有限公司) was incorporated in 1987.^[1] That year, Chang began the restaurant's second branch at Taipei's Chongqing North Road [zh].^[5] In 1989, Chang Yan-chuan, his father and the company's founder, died during an accident while fishing at sea.^[11][14][15] The external perception was that with its leader gone, Formosa Chang would go out of business. At the time, the founder's oldest son, Chang Yung-chang, was the manager of a small branch. When the family met, they chose Chang Yung-chang to become its next leader. Chang resolved to start a new branch within a month to quell the external doubts in the company.^[8]

Another challenge arose with the founding of the competitor Hometown Minced Pork Rice (Chinese: 故鄉魯肉飯). The brand gained success by 1991, receiving the endorsement of the well-known singer Yeh Hsien-hsiu and expanding to 187 branches in Taiwan by 1998.^[8] Amid this rise of competition, Formosa Chang's founder Chang Yan-chuan's wife died of acute hepatitis while on holiday in Germany in 1991, further fueling the external perception that the company was in trouble.^[8][15] Chang Yung-chang resolved to open the company's fifth and sixth branches in two months to allay the concerns.^[8] Formosa Chang started its fifth branch on Chenggong Road [zh] in Neihu in 1991. That year, it served between 8,000 and 10,000 dishes of minced pork rice each day.^[16] By the 20th century, Hometown Minced Pork Rice had faded while Formosa Chang continued to grow.^[8]

Start of franchising

By 1992, the restaurant began expanding from northern Taipei to the Eastern District, which the Economic Daily News [zh] said signaled its aim to compete with the Western fast food chains that are prevalent in the lively Eastern District.^[13] To produce the minced pork rice for its increased number of branches, Formosa Chang spent NT$200 million (US$7,160,246) to build a central production facility spanning several hundred ping at New Taipei Industrial Park.^[17] Chang began franchising the restaurant in 1993.^[9] Franchisees had to pay an annual fee of NT$300,000 (US$10,740) and a monthly fee of NT$12,000 (US$430) for branding services and support. Franchisees were required to invest about NT$1.8 million (US$64,442) to start their branch as well as rent or own a venue of 33 ping (110 m²; 1,200 sq ft).^[18] In late 1994, Formosa Chang had added 24 franchise locations that year.^[19] By the end of 1995, the restaurant had 50 branches.^[20]

As the number of branches grew, the original central kitchen could no longer meet production demands, prompting Chang to open a larger facility in Wugu. The facility size grew from 90 ping (300 m²; 3,200 sq ft) to 480 ping (1,600 m²; 17,000 sq ft). The growing scale of operations compelled Formosa Chang to expand by opening more stores to prevent financial losses. In 1995, the company greatly expanded its store count. For two years, it started two or three new branches per month throughout Taiwan. Although the quick growth boosted the brand's recognition, it also resulted in substantial reputation harm. The food at the flagship location tasted differently from the branches and the franchisees struggled to adhere to the company's policies. As a result of the overly fast expansion, numerous branches went out of business shortly after opening and customer satisfaction went down.^[10]

Foot-and-mouth disease and move away from franchising

Taiwan experienced a major outbreak of foot-and-mouth disease in 1997, causing the business to lose over NT$10 million (US$358,012) in two quarters.^[7] In the first 10 days after the outbreak, sales fell by 60% as customers did not want to eat pork, which had become associated with the disease. Formosa Chang posted notices on the door informing customers they also sold chicken curry and beef brisket rice.^[21] Before the outbreak, the company had reached a high of 63 branches.^[22] Within a year, over a dozen stores shut down. Chang closed down franchises that were underperforming and pushed forward with a model of having operators directly own the stores.^[7] He took these actions to improve the company's reputation which had been damaged by the overly rapid expansion. His decisions were shaped by the insights he gained from a one-year management program offered by the Ministry of Economic Affairs.^[10] In 1999, Chang launched the ISO 9001 quality management system and enacted total quality management to enhance the business's operations.^[7] By 2004, the number of stores in Taiwan had declined to 18, of which four were owned by franchisees. As the company had faced challenges in controlling franchises, the decline aligned with its decision to move away from expanding by opening new franchises.^[23]

Expansion to Japan and mainland China

Formosa Chang approved the Japanese hardware company Miwa Honten [Wikidata] to be its regional franchise agent in Tokyo in 1999.^[24] Its first branch in Japan opened in 2003.^[25] It marked the first time that a Taiwanese street food company had established a presence in Japan.^[10] Initially, the Japanese branches struggled as their dishes did not resonate with the local market. After enlisting the advice of China Productivity Center [zh], Formosa Chang transported ingredients and condiments from its central facility in Taiwan to Japan. The Japanese teams then adapted the sauce to cater to the Japanese palate which favors saltier tastes. To cater to local tastes, they eliminated dishes that had pig trotters, reduced the number of soup dishes, and sold beer.^[26]

In 2003 in the midst of the 2002–2004 SARS outbreak, Formosa Chang gave a mainland Chinese company permission to start a branch in Shandong. After the branch launched on 1 May, the mainland Chinese company said customers did not like the food and found it to be too costly. The Shandong branch closed, causing the company to lose money.^[27] Realizing during the outbreak that franchisees would only continue running the business when they could make profits, Chang decided to stop extending contracts with the stores.^[28]

Beginning in 2001 or 2002, Formosa Chang hosted a speed eating competition.^[29] At the 2003 competition, people competed at the Ningxia Night Market to eat the most minced pork rice in five minutes. The highest number of bowls consumed that year was nine.^[30] The 2008 competition was canceled after a contestant choked to death at an unaffiliated eating competition.^[29]

Catering to younger diners and new brand, Jing Jian Kang

In 2003, the company allowed executives to purchase stock which gave them the opportunity to receive a share of the company's profits.^[31] By 2013, the company had 191 shareholders, who largely were company executives.^[32] In the late 2000s, Formosa Chang was opening around one branch each year.^[5] At the end of 2008, the company had 750 employees who worked in 30 branches in Taiwan and three in Japan, giving it an annual revenue of NT$600 million (US$21,480,739).^[33]

By 2008, the restaurant focused its marketing efforts on appealing to a younger demographic—people ages 15 to 30—to counter an aging customer base.^[31][27] It became a sponsor of the band Chthonic, which was known for having a rebellious image; opened an online store; and created T-shirts featuring Formosa Chang's logo and a hollow-eyed skull paired with two crossed white bones.^[31][34][35] By 2010, Formosa Chang had 39 branches which brought in a yearly revenue of NT$600 million (US$21,480,739).^[9] That year, it was the second largest Chinese-style fast food chain in Taiwan, behind only Mercuries Food Chain [zh].^[36] The restaurant's branches in 2014 largely were in Taiwan's north in large commercial areas.^[37] In Greater Taipei in 2011, the chain had over 30 branches.^[38] The company in the 2010s began expanding southwards from Greater Taipei to Hsinchu and Taichung.^[28] David Chen of the Taipei Times in 2011 called Formosa Chang a noteworthy business that had effectively commercialized street food classics on a large scale.^[38]

Formosa Chang launched its 50th branch in 2014 close to Far Eastern Memorial Hospital. It was the chain's first branch to implement a revamped store format to mimic a fast food restaurant. In the previous format, customers placed orders through a server. In the new format, customers place orders at a checkout counter on stepping into the restaurant. Previously showcasing a traditional Taiwanese aesthetic, the new branch adopted a modern setup with well-lit tables, dining chairs with backrests, and more sinks, catering to contemporary concerns about food hygiene. The new branch moved from an à la carte to a set menu. The restaurant changed the logo, revising Chang's beard from having three wrinkles to having two. The primary goal of these changes was to draw in younger diners between the ages of 15 and 30. The restaurant's primary customers at the time were between the ages of 30 and 50.^[39]

In 2017, the company spent NT$295 million (US$10,561,363) to purchase 372 ping (1,230 m²; 13,200 sq ft) of land at Wugu District in New Taipei City. It invested an additional NT$88 million (US$3,150,508) to construct a factory on the site, their second.^[25] Formosa Chang spent NT$25 million (US$895,031) in 2019 to support mobile payments in its stores through a new point of sale system. It added kiosks to allow customers to do self-service as well as kitchen display systems and tablet ordering systems.^[40] The National Animal Industry Foundation authorized the company to label its products as being "Taiwan Pork" certified, meaning that the pork is from Taiwan.^[41][42] The restaurant sparked controversy in 2020 after it put the label on a lunchbox—braised pork containing anka—that had Spanish-produced pork. To abide by the label guidelines, the company paused the lunchbox sales.^[41] In 2024, the company had 73 branches in Taiwan, 68 branches in China, and 3 branches in Japan.^[43] That year, Formosa Chang started a new restaurant brand named Jing Jian Kang (Chinese: 京簡康), which literally means "Capital Simple Health". With the aim of targeting health-conscious consumers, the restaurant serves dishes that have little sugar, oil, and fat. Its dishes are steamed and baked.^[4]