Running Respites
When the heroes decide to take a respite (see Respite in Chapter 1: The Basics), your role as Director changes a bit. Most of the heroes' activities during respites revolve around downtime projects, which are typically self-directed. However, you still have levers you can pull to make the story interesting.
Safe Place
Heroes can't take a respite unless they're in a safe place. This typically means a place with a bed and four walls and a roof around them, where they're unlikely to get stabbed in their sleep. Characters aren't going to find 24 hours of peace to take a respite in a villain's lair, even if they barricade a door. However, this can become more of a gray area if the heroes attempt to take a respite while traveling in the wild.
"Why can't we camp in this seemingly peaceful wode for a day?" is the kind of thing you might decide is fine if you want the characters to be able to regain Stamina and Recoveries. Alternatively, you might want them to work harder for those resources, marking the wode as a dangerous place in the story. If the players want the heroes to take a respite in a place you deem unsafe, let them know it's impossible to get any meaningful rest or make progress on projects in that place while remaining constantly on guard for danger.
Too Many Respites?
It's up to the players how many respites the heroes take in a row. Characters eager to take a long series of respites to undertake downtime projects (Chapter 12) is fine, but they should always feel pressure to get back to the fight. Remember that villains don't stop plotting and conquering while the heroes rest. Their plans continue! If the characters are taking their sweet time with respites so they can create as many Healing Potions as possible, have them get wind of the latest evil actions that nearby villains are taking. Heroes wanting to defend the people and values they love had better stop respiting and start adventuring.
If you prefer a campaign that has few respites, you might want to deploy artisans, sages, and readily available project sources to allow the heroes a chance to craft useful items and do research, since their available time to do so will be limited.
Project Events
Downtime project events are a Director's time to shine during downtime. Remember that these events (detailed in Chapter 12) are optional, and you can use them as frequently as you like. In general, more than one or two events per respite can be disruptive to the overall campaign. It's also fine to have no events if you just want to keep the campaign's main story rolling along.
When you're running downtime events, be sure to rotate which heroes are in the spotlight of the action. Don't focus on the same hero over and over again. You can also do a little preparation for events before you play them out, reading the event prompt and fleshing it out into a scene. Prompts are intentionally vaguely written so you can modify them as you see fit or easily create your own.
Respites Between Sessions
If your play time is limited, you can have the players do everything they need to do during a respite between your game sessions, provided they end a game session by taking a respite. Doing so lets you run any events over email or through a chat app. Then when folks return for the next session, they'll be ready to go with project rolls completed, XP tallied, and Stamina and Recoveries restored.
How Many Respites?
There's no right number of respites that works for every group. If you want the characters to be able to craft and research, you'll want to give them more downtime to do so. If you prefer to hand out all the treasure and secrets through adventuring, then they'll need fewer respites. A good pace for many games sees the heroes taking between ten and twenty respites during each level of play, with many of those respites strung together.
Victories and Respites
Ultimately, the players, not the Director, decide when the heroes take a respite. So even though you adjudicate whether the conditions are safe enough for a respite, this part of the pacing is effectively out of your hands. Typically, most heroes want to rest after every 4 to 6 Victories they earn, depending on how many Victories were earned in combat encounters.
Optional Rule: Average Roll
When the heroes take a long series of respites, it might not be fun for the players to do a ton of die rolling covering many projects. Instead of rolling, you can calculate the progress for each respite as if a hero had rolled a natural 11 on their progress roll, then adding appropriate bonuses. Although rolling lots of dice and hoping for breakthroughs can be a lot of fun, taking the average of the 2d10 roll allows players to get through a lot of downtime with minimal math.
Optional Rule: Easier Crafting
Every crafting project requires that a hero obtain the project's item prerequisite and a project source in a specific language before the project can be started. These requirements exist so you can control the pace at which heroes can craft an arsenal of treasures to defeat their foes.
That said, you can make it easier to craft treasures and other items by changing the rules to require either the item prerequisite or the project source but not both, or by removing the language restrictions on project sources. This works well in campaigns that don't have a lot of respites. Just keep in mind that removing these barriers can lead to the heroes crafting more items and unbalancing the game in their favor.