From Technology to Spa: Allen Lee’s Risky Switch

After a casual conversation in an airplane, Allen Lee decides to invest in a foot massage business that Zhang Kang, the founder and president of Kanzi Foot Massage Health Center Group (KFHC), plans to develop in Shanghai. The company has 200 centers across China, but none in Shanghai. A few of these centers are owned by KFHC, while others are franchised to different owners. Zhang is on a visit to Shanghai to find a location for a luxury massage center, his first in the city. Allen sees an opportunity to invest in what sounds like a promising business opportunity, though he knows nothing about the massage industry. The case details the process of investment in the new massage center and attempts to develop it. It also brings into focus how a “dream opportunity” can easily turn into a nightmare when things aren’t what they seemed to be at the outset.