The coronavirus disease 2019 (COVID-19) is spreading around the world, and Taiwan is no exception. Faced with the outbreak of the epidemic, the Taiwan government immediately ordered a policy banning indoor dining. The main purpose of the present research is to extend a Theory of Planned Behavior (TPB) theoretical framework to explore the public perception toward banning indoor dining policy on restaurant avoidance behavior during the COVID-19 outbreak. An online survey was administered in Taiwan during the COVID-19 pandemic from 25 May to 8 June 2021; a total of 326 responses were collected by a convenience sampling method, and partial least square (PLS) analysis was deployed to examine the hypothesized relationships. The results showed that perception toward banning indoor dining policy had independent significant associations with attitude, perceived behavioral control, and restaurant avoidance behavior. Moreover, attitude, perceived behavioral control, and subjective norm had independent significant associations with restaurant avoidance behavior. This study provides theoretical and practical insights into the psychological and behavioral processes involved in policy by the general public during the COVID-19 pandemic, thus helping policymakers to better understand public opinion and responses to policy issues.