In recent days, several outlets of the well-known mainland Chinese brand “Shanghai Xiaonanguo,” located in Shanghai, suddenly closed down. Multiple employees stated that the Chairman of the company’s board of directors (actual operator) Gu Tongshan has not appeared in public for several months. At the same time, some employees have been owed wages for over three months, and some suppliers have not received payment for an extended period. Consumers who had made reservations for New Year’s Eve dinner at Xiaonanguo outlets are facing situations where their deposits cannot be refunded, and their rights are compromised.
According to a report by the “Daily Economic News,” on February 9th, a “store closure notice” was posted by the operating management at the entrance of the “1987 Xiaonanguo” store located on the Golden Street, stating that the store had closed on February 6th without informing the management. Additionally, a notice terminating the lease agreement for the property was also posted at the entrance, stating that the store still owed nearly 2 million yuan in rental fees, dated February 8, 2026.
Employees of several Xiaonanguo outlets in Shanghai mentioned that wages have been withheld for over three months, including both long-serving employees of over 20 years and new employees who joined just a few months ago.
Recently, multiple outlets of “Shanghai Xiaonanguo” in Shanghai have suspended operations without any official closure notices from the company or follow-up plans.
On the morning of February 6th, Zhang Bin (pseudonym) arrived at work at a Xiaonanguo store in Shanghai but was surprised to find that he couldn’t clock in, and the internet, water, and electricity were also not functioning properly. It was then that Zhang Bin realized the store had been forced to shut down.
Another employee, Wang Ying (pseudonym), at a different store, also faced a similar situation. “We were operating normally on February 4th. I was even setting tables for customers’ reservations. How did we suddenly close two days later?” Wang Ying started working at Shanghai Xiaonanguo in September 2025 but has not received several months’ worth of wages until now.
Some employees mentioned that since February of last year, Xiaonanguo stores in Shanghai started delaying wage payments, continuously pushing back the payment timelines. In the latter half of last year, they began only paying part-time workers half of their wages per month. Similar cases of wage arrears were reported in Crystal Xiaonanguo and Nanxiaoguan under the Shanghai Xiaonanguo group.
Suppliers were the first to notice issues with Xiaonanguo’s operations before the employees did. Some store workers revealed that suppliers frequently visited the store in the last two months demanding payment, including those selling eggs, fish, and vegetables.
Many employees divulged that the Chairman of the company’s board of directors (actual operator) Gu Tongshan has not made any public appearances for months. Usually, work updates were communicated online by department heads, but with suppliers continuously demanding debt repayment, some employees have begun working from home.
On February 9th, the headquarters office of the company was empty, with only a few people leaving after packing up their belongings.
According to reports on Union Merchant Network, some consumers shared their experiences of booking New Year’s Eve dinners at Shanghai Xiaonanguo stores on January 30th. The store was operating normally and accepting orders, but just two days later, it was suddenly shut down. Prepaid deposits for the dinner could not be refunded, with amounts ranging from 500 to 1000 yuan. Additionally, the balances on stored-value cards could not be redeemed. The abrupt closure made it challenging for consumers to rebook their dinners, significantly affecting their rights. Store employees mentioned that the closure notice came suddenly, and they had to implement the closure passively.
Public records indicate that Shanghai Xiaonanguo was founded in 1987 and was once one of the leading brands representing Shanghai local cuisine, with over 80 stores nationwide at its peak and an annual revenue exceeding 2 billion yuan. However, the company has been running losses since 2018. Financial reports show a continuously increasing asset-liability ratio, surpassing 250% by the end of the first half of 2025, well above the usual safety level of around 70% for the catering industry, indicating significant financial pressure.
Starting from 2024, the Shanghai Xiaonanguo group was frequently sued by suppliers due to payment disputes, and by early 2025, the company’s Shanghai headquarters had significantly reduced its office space.
Before ceasing operations, the company had planned to sell some mainland stores to recover funds, keeping only a few profitable outlets. However, this plan did not materialize. Currently, most Shanghai stores have closed, leaving the brand’s future development with considerable uncertainties.
According to third-party platforms like Tianyancha, just the subsidiary company Shanghai Xiaonanguo Haizhiyuan Catering Management Co., Ltd. was involved in over a hundred legal cases, mainly due to suppliers suing over overdue payments, with most cases focusing on disputes arising after 2024.
It is reported that within the headquarters office, several court summonses can be found.