Core Insights - The article highlights the controversial business practices of Shanghai Wenfeng Beauty and Hairdressing Group, led by its founder Chen Hao, who has created a vast empire under the guise of a beauty salon chain [1][34] - The company operates over 400 stores nationwide, generating annual revenues exceeding 2 billion yuan, with nearly 10,000 employees [33][34] - Chen Hao's unconventional marketing strategies and the company's unique business model have drawn significant consumer complaints and regulatory scrutiny [10][28] Company Overview - Wenfeng Beauty and Hairdressing Group was founded by Chen Hao, who started his career in Shanghai in the 1990s with a vision to capitalize on the local population's desire for beauty [2][4] - The company employs a "front store, back school" model, combining beauty services with training programs for employees, which requires them to pay tuition fees [5][6] - The franchise model has evolved, with initial investment requirements increasing from a few thousand yuan to between 100,000 and 200,000 yuan today [6][8] Business Model and Practices - The company utilizes a promotional strategy of offering services at low prices, such as "wash, cut, and blow dry for 10 yuan each," which entices customers but leads to higher total costs [10][12] - Complaints have surged, with 476 reported in 2021, primarily related to misleading pricing and aggressive upselling tactics [10][28] - The company has been accused of employing high-pressure sales tactics, particularly targeting elderly consumers with expensive health and wellness packages [19][20] Regulatory Issues - Regulatory bodies have initiated investigations into Wenfeng's practices, citing violations related to pre-paid card regulations and misleading advertising [28][30] - The Shanghai Consumer Protection Committee has issued warnings about the potential risks associated with Wenfeng's business model, particularly regarding its pre-sale practices [28][30] - The company has faced administrative penalties, including a fine of 50,000 yuan for failing to comply with pre-paid card regulations [28] Consumer Impact - Numerous consumers have reported significant financial losses, with some individuals spending hundreds of thousands of yuan on services that did not meet their expectations [11][12][21] - The company's marketing tactics have been described as akin to those used in multi-level marketing schemes, creating a culture of dependency among employees and customers [24][26] - The ongoing consumer backlash and regulatory scrutiny raise questions about the sustainability of Wenfeng's business practices in the long term [30][34]