A Chinese skewer chain that once rode a wave of rapid expansion is now confronting what may be its most serious crisis since founding. Fengmao, famous for mechanised grilling and a standardized product that helped it scale from a single outlet in Yanji to hundreds nationwide, has seen many of its stores quietly close since December 2025 while employees report months of unpaid wages in early 2026.
The closure wave has an ironic visual: in Shanghai a giant poster of tech entrepreneur-turned-influencer Luo Yonghao still advertises “Treat guests to skewers, Fengmao skewers,” even as the lights go out in multiple branches. The campaign was part of a 2022 repositioning engineered with marketing agency Hua & Hua, which recast Fengmao from a late-night, street-skewer brand into a “meal-grade” restaurant with a much higher average bill.
That repositioning sits at the heart of the trouble. Fengmao pivoted from the old slogan, roughly “freshly skewered lamb tastes best,” to a promise of a fuller dining experience with an 80+ RMB per head check. The price tag proved to be a trap: too expensive for the casual night-time skewer market but too modest to compete with established mainstream dining options, leaving the chain squeezed between street vendors and sit-down restaurants.
The business model was vulnerable in other ways. Standardisation allowed rapid rollout in the 2010s, when revenue surged from around 9 million RMB to roughly 700 million, and single-store profits grew. But the same standardisation struggled to accommodate regional taste differences across China’s diverse culinary market. Unlike multinational fast-food chains that localise menus, Fengmao’s uniform approach met resistance from diners in different provinces and lost out to freer-form self-serve barbecue and hotpot concepts.
Strains on the chain worsened as the broader skewer category contracted: a recent industry tally shows nearly 18,000 fewer skewer outlets nationwide in the last year. Founder Yin Longzhe has been publicly candid about seeking capital, sending multiple internal letters saying he is “almost always fundraising.” The appeal for cash has not calmed staff: a stream of comments and videos by disgruntled employees on social platforms, along with reports of unpaid wages, has intensified reputational damage.
Operationally, the crisis reveals the limits of marketing theatre when underlying unit economics deteriorate. The campaign symbol — a deliberately whimsical skewer “covered in eyes” — and a celebrity endorsement cannot fix an incoherent price-positioning strategy or the uneven supply-and-demand dynamics of the national roll-out. Franchisees and local managers faced conflicting pressures: to maintain national standards while adapting to local tastes and costs.
Consumer protection and labour issues add another political and financial dimension. Many customers hold unused top-up balances, and staff exposed to payroll disruptions have turned to social media to press for back pay. Those unpaid obligations pose legal and regulatory risks, and they create liabilities for any investor considering a rescue or purchase of assets.
Fengmao’s predicament is emblematic of a broader phase for China’s foodservice sector: a post‑pandemic market with muted consumer spending, rising operating costs, and heightened competition that punish strategies premised on rapid national replication. For marketers and investors, the episode is a reminder that brand overhaul must be aligned with price architecture, local palate adaptation, and realistic unit economics.
The likely near-term outcomes include further downsizing, potential restructuring of franchise agreements, or acquisition of healthier assets by better-capitalised rivals. For consumers and workers left holding prepaid cards or unpaid wages, however, the resolution may take months and could prompt closer scrutiny by regulators over prepaid liabilities and labour protections.