Taiwans whale watching industry has been prosper rapidly since 1997 while not any law administering it .Due to free market structure the resource of whale watching would be excessly exploited and the whale watching industry will not exist any more. There are three research topics on the institutional design of the industry in my article. Namely , the administering department and its related rules for whale watching industry to be established, the cost analysis for governance structure of institution, and the study of franchise for Taiwan¡¦s current whale watching industry. According to Williamson¡]1991¡^,I present three kinds of organization style¡]i.e. market ,hierarchy organization and their mixed form¡^ and their key differences to figure out the most efficient one. And finally I come to a conclusion that the franchise is the most efficient of the three kinds of organizational style and can be a reference structure for making law on Taiwan¡¦s whale watching industry.

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