Dunkin’ and the Doughnut King Ted Ngoy overcame poverty and escaped genocide, made a fortune off doughnuts and gambled it all away. Today, Ngoy is back on top — but America’s biggest doughnut chain could threaten the hundreds of California shops that are his legacy.

It’s August in Modesto, and the Central Valley sun is blistering hot outside of the new Dunkin’ Donuts. Nigel Travis, the CEO of Dunkin’, is standing at a podium on a small patch of concrete near the terminus of his company’s first drive-thru in California. A few feet away, a human being encased head-to-toe in a foam coffee-cup suit is waving at customers, who are fanning themselves at the end of a line that has spilled out of the shop. In the near distance, lunch-goers shuffle from their cars to the cool sanctuaries of McDonald’s, Jack in the Box, and Taco Bell. Despite the heat, Travis, who is tall and bespectacled, with swept-back gray hair, is wearing a thick suit jacket, the checked pattern of which forecasts the fact that he’s British and softens the surprise of his heavy accent. Dunkin’ Donuts controls 56 percent of the nation’s doughnut market and sells more coffee by the cup than Starbucks. Still, it has never managed to be successful in California. The chain expanded West in the 1980s, opening a total of 15 locations across the state, but by 2002 it had shut down all of them. Travis took over as CEO in 2009, and under his leadership, Dunkin’ has decided to try again. In 2012, the chain opened a new location on Camp Pendleton, north of San Diego. A short time later, Travis announced a California push that made its previous attempt look puny: Dunkin’ has signed 200 franchise agreements in the state and plans to add up to 1,000 more locations in the coming years. Dunkin’ views California as its manifest destiny. In the mid-1950s, William Rosenberg, founder of the then-tiny East Coast chain, visited Southern California during a nationwide fact-finding tour. He noticed that the driver’s seat, not the kitchen table, was the new breakfast battleground in the West. He also noticed that Californians loved doughnuts. For the harried driver, no meal was simpler or cheaper or tastier than a doughnut, which could be eaten with one hand. California shop owners had erected garish doughnut sculptures alongside freeways and busy thoroughfares to lure hungry motorists. Here indeed was the promised land, a magical place where doughnuts hung in the sky to be glazed by the setting sun. Modesto’s newest drive-thru is crammed with idling cars. Every 20 seconds or so, a driver, attempting to exit, must pass awkwardly through the gathered crowd. “What you’ll see here in this Modesto Dunkin’ Donuts is our extensive array of delicious food and beverage options,” says Travis. “This includes our famous hot coffee, iced coffee, iced tea, lattes, Coolattas, and breakfast sandwiches. Some people who have been associated with Dunkin’ for years say to me, ‘Wow, where did those breakfast sandwiches come from? They’re really good!’” As he says this, Travis gazes at a minivan inching nervously forward. Directly across the street, another doughnut shop is also jammed with customers. Mr. T’s Delicate Donut, owned by Winnie Hou, has been a local favorite for more than 20 years. Inside, a man in the open kitchen is turning doughnuts in the fryer with a pair of long wooden sticks. Compared to Dunkin’ Donuts’s slick corporate branding and data-driven interior layout, which is designed to move people through the line as quickly as possible, Mr. T’s looks haphazard. A few marble tables sit beside a row of large windows, and a fluorescent-lit display case focuses attention on more than 30 varieties of doughnuts. Yet Mr. T’s is more than it appears. It is one link in a network of nearly 1,500 independent doughnut shops that anchor strip malls and brighten main streets from San Ysidro to Arcata, and that for more than three decades have pummeled chains like Winchell’s, Krispy Kreme, and, during its first California expansion, Dunkin’ Donuts. Perhaps the most surprising thing about these ubiquitous shops, and a significant contributor to their resilience, is that almost all of them are owned by Cambodian Americans. At the counter in Mr. T’s, I meet Sandy Hou, a smiley University of California, Irvine, student who’s spending the summer helping out at her family’s shop. I order a doughnut and ask if she’s worried about Dunkin’ coming into Modesto. She shrugs, and her answer echoes what I’ve heard from Cambodian shop owners all over the state. “Our customers are loyal,” she says, placing a chocolate bar in a white paper bag. “We’re not going anywhere.”

Eight thousand miles from Modesto, along the southern tail of the Mekong River, the man who brought Cambodians into the California doughnut business stands to make a toast. Ted Ngoy is 74. His graying hair has retreated to the crown of his head, and his loose slacks cut an equatorial line across his small paunch. Only his doughnut-fed cheeks remain incongruously youthful. Before him, about 15 members of Cambodia’s upper crust nod appreciatively around a tamarind wood table. Among them are the official spokesperson for the royal government, a senator, a doctor whose name adorns a university, and the owner of the upscale butchery in which they all sit. They are in Phnom Penh, the muggy capital of Cambodia, a country of remembered atrocity and sputtering rebirth, of doughnut magnates–turned–high-society players. Several of those gathered have direct ties to the doughnut industry in California, where refugees from the war-torn nation taught one another to bake in neighborhood shops up and down the state, and where a few savvy businessmen amassed fortunes that allowed them to return to Cambodia and wield influence. “May we all know unity and friendship,” Ngoy proclaims in Khmer; it’s a simple toast, but one that acts powerfully on the room. As charcuterie arrives on communal plates, the assembled dignitaries barrage Ngoy with toasts of their own. From the tone of the tributes, a visitor who doesn’t speak the language can safely guess the gist: Long live the Doughnut King of California. Long live Ted Ngoy.

Bun Tek Ngoy touched down at Camp Pendleton on a military plane in May of 1975 with his wife and three young children. He had no home and no money, and his country had been overrun by a gang of pitiless thugs. At 35, Ngoy had already climbed out of poverty and into privilege once. Born to a single mother in a town along the northern border with Thailand, he grew up in a close-knit Chinese Cambodian community. Ngoy wanted more, so he moved to Phnom Penh, where he rented a shared room and began studying French and English. He fell in love with a beautiful girl from his language classes. She belonged to one of the country’s most well-regarded families, and young men of excellent standing were already lining up for her hand. When Ngoy heard her name, Suganthini, which means “fragrance,” he smelled flowers. The dingy apartment where he lived happened to face her family’s villa. They began a correspondence, he remembers, and Suganthini flirtatiously dared him to visit her room. Ngoy climbed through barbed wire and past armed guards, alighting beside an open bathroom window in the villa. He virtually lived in her room for weeks, hiding whenever servants came to tidy it. On the 30th night, they took turns cutting their fingers under the full moon, swearing oaths of fealty. Much later, Ngoy would break his oath, and that betrayal, he believes, would lead to his downfall. Over the strong objections of Suganthini’s parents, the couple married. Suganthini’s brother-in-law was a top general, and after Ngoy joined the army in 1970, he was quickly promoted to major. Cambodia, however, was poised to enter a sustained nightmare. A coup d’etat in March of that year unseated the prince, setting off a civil war with communist guerrilla fighters intent on ousting the new pro–United States regime. Ngoy was assigned to an embassy in Thailand, where he, Suganthini, and their daughter and two sons went to live in relative security. But he traveled to Phnom Penh regularly. On his final trip, in April of 1975, he received word that the capital would fall. One of the last flights out, he remembers, was on a U.S. military plane that had dropped off a supply of rice. Rockets were falling all around the airfield as Ngoy ran for the plane. The communists took Phnom Penh the next day, he says, and Pol Pot’s bloody reign commenced. Between 2 to 3 million people would be executed in just under four years, and famine would kill hundreds of thousands more. After a month in a refugee camp in Bangkok, Ngoy and his family were sent to Camp Pendleton, where they stayed in a barracks until congregants of Peace Lutheran Church in nearby Tustin sponsored their visas. They moved into a small rented house, and Peace Lutheran gave Ngoy a job as a groundskeeper and custodian. His sponsor, an affable man named Dean, helped him secure a second job pumping gas at a Mobil station at night. One evening at the Mobil, when the traffic died down, a co-worker asked Ngoy to watch the station while he ran across the street to a shop called DK’s Donuts. When the co-worker returned, he opened a box and told Ngoy to choose a doughnut. Ngoy had never had one, so he picked at random. The taste reminded him of the Cambodian round cakes he ate growing up. He began stopping by DK’s after his shift, and he noticed its steady stream of customers at all hours. Though his English was limited and he knew nothing about business, Ngoy crossed the street one evening and asked the two women at the counter how to open a doughnut shop. They told him it would be risky for someone with no experience and recommended he look into the manager’s training program at Winchell’s, the dominant doughnut chain in California at the time. Dean gave him a glowing recommendation, and Ngoy became the first in a long line of Indo-Chinese immigrants accepted into the Winchell’s training program. The curriculum was rigorous. For $500 a month in wages, Ngoy cleaned every inch of the teaching store in La Mirada, handled the money, and baked every doughnut on the menu. He had no culinary experience and had trouble with the exacting jargon of baking, but he proved a quick study. When he completed the program, Winchell’s gave him a store to manage in Newport Beach. He took pride in adhering to the company’s three pillars of success: cleanliness, service, and quality. He also enjoyed chatting with customers and practicing his English. They had trouble with his Cambodian name, Bun Tek, so they called him Ted. One day in 1976, a customer came in with a copy of the Orange County Register. The man had circled a small ad in the classifieds: DOUGHNUT SHOP FOR SALE. “Ted, you should buy it,” he said. The price for the business, a shop called Christy’s Donuts in nearby La Habra, was $45,000. Ngoy had saved $20,000 working at Winchell’s, and the sellers loaned him the balance. Just a year after Ngoy arrived in the U.S., he bought a doughnut shop. He spent a month working as an employee under the old owners to get the hang of things. When he took over, he made just one operational change. Instead of baking once in the morning, he decided to bake in smaller batches throughout the day. The doughnuts at Christy’s would always be fresh. Ngoy kept his job managing the Winchell’s, and Suganthini helped run the new shop. With two incomes, Ngoy paid off his loan, and the next year he purchased a second shop in Fullerton.

To celebrate its Modesto opening, Dunkin’ unveiled a California doughnut, filled with Bavarian Kreme and decorated to look like a mellow smiley face wearing sunglasses. But the sign outside of the chain’s new Modesto location carries a revealing tag line: coffee and more. “If you take our U.S. sales as a whole, 57 percent are beverages,” Travis, the CEO, tells me soon after shearing a ribbon with a giant pair of pink-handled scissors. “When I came on the scene more than five years ago, we looked at our name, which is so iconic. We wanted to demonstrate that beverages are very important. That’s where ‘coffee and more’ came from. Perhaps we should have added something about sandwiches, also.” Dunkin’ Donuts’s strategy is part of a broader shift in the fast-food industry. Breakfast and beverages are selling far better than other menu items. “The restaurant industry has not been faring well since the recession,” explains Bonnie Riggs, an analyst at the NPD Group, a market-research company, “but one bright spot has been the breakfast area. It’s where the opportunity is.” According to Riggs, fast food now accounts for 85 percent of all breakfast visits in the restaurant industry. As chains add to their menus to draw morning customers, seemingly disparate brands like Starbucks, Subway, and Taco Bell are competing directly with one another — and with McDonald’s, the breakfast king. Dunkin’ Donuts is an obvious front-runner in the Breakfast Wars. As a doughnut chain, it has always catered to the morning set, and it’s well known for its coffee. The move to California is an attempt to expand its breakfast hegemony. “California gets you in market position because of density of population,” says John Gordon, a restaurant-industry analyst in San Diego, “and because of the presence of so many cars, because it’s a commuter lifestyle.” But the Massachusetts brand is still an outsider. Earlier this year, the company found itself embroiled in a local controversy when the developer of a new Dunkin’ outpost in Long Beach announced plans to demolish a giant doughnut that had been towering over the site — the previous location of a Mrs. Chapman’s Angel Food Donuts — since 1958. It was a beloved landmark and a handy guidepost for locals, who invariably referred to it when giving directions, but the developer worried that it would distract from Dunkin’ Donuts’s diversification strategy. “We want to be good neighbors,” Dan Almquist, the managing partner of the franchising company, tells me, explaining why he ended up relenting and letting the structure stand. In an interview with the Los Angeles Times, Almquist said, “The last thing we want to do is be viewed as the guys that killed the doughnut.”

By 1980, Ted Ngoy owned 20 Christy’s shops in Southern California. Although the locations shared a name, he made no effort to give them a cohesive brand identity. Scouring classifieds, Ngoy looked for existing shops for sale by owner. When he found one, he would sit out front in his car for hours, drinking coffee and tallying customers. He noted foot and car traffic and became deft at estimating a store’s approximate revenue, which helped him during negotiations. Three decades earlier, William Rosenberg had perfected the same technique while scouting new Dunkin’ locations on the Eastern Seaboard. Rents on Ngoy’s shops varied, but properties rarely cost more than $300 to $400 per month. Ngoy locked in good deals with 20-year leases. After he took over a shop, he ran it himself for one month to assess operating costs and revenues. He kept the old staff in place and made every effort to maintain the recipes just as they had been. Americans, he found, didn’t like change. He did insist on using the highest-quality ingredients, and if a store’s flour wasn’t up to his standards, he would replace it with a superior product. He also always baked small batches around the clock. When he had a feel for the economics of a location, Ngoy put word out that a turnkey business was available for lease. Large Cambodian families with a built-in labor force of siblings, cousins, aunts, and uncles would come forward. Christy’s stores operated as independent entities, but owners leveraged their combined purchasing power to keep the cost of ingredients low. A single shop wouldn’t make anybody rich, but it did offer a reliable way for refugees with limited English and few marketable skills to earn an independent living. Throughout the early 1980s, Ngoy sponsored visas for hundreds of Cambodians who had fled the chaos back home. He gave them jobs in his shops, where most tasted their first doughnuts, and set them up as lessees once they got on their feet. The most ambitious struck out on their own to open new locations and develop new markets, often while continuing to lease a few shops from Ngoy. Incredibly, Winchell’s, once the dominant brand in the region, started losing ground. Immigrant families figured out how to survive on a few thousand dollars of profit a month, while large companies like Winchell’s needed substantially higher returns for a location to stay viable. Ngoy took over a failed Winchell’s location in Santa Ana in the early 1980s, a sort of homecoming to the company that gave him his start. There, he met a soft-spoken young man named Ning Yen. Like many refugees, Yen had been training with a baker friend after his ESL classes. Ngoy hired him, and soon Yen became his best employee. In 1984, Ngoy cosigned a loan enabling his protégé to lease his own shop in Irvine. “He helped a lot of people like that,” Yen remembers. “Anything you asked him for, he would help. He’s a very generous guy.” Yen would go on to open dozens more shops, as well as a distributorship with Ngoy’s nephew. By leasing out his holdings, Ngoy kept his day-to-day involvement in the doughnut business to a minimum. He expanded his empire north, to Brisbane, Fresno, and San Jose. He and his wife began traveling abroad and spending weekends in Las Vegas, where they gambled a little and saw all of the famous crooners. Ngoy especially loved blackjack, which challenged his strategic mind. By the late 1980s, he had more than 50 shops across the state, and money was rolling in. The family moved to a 7,000-square-foot mansion in Mission Viejo, and Suganthini changed her name to Christy. If the old name invoked flowers, the new one brought to mind the scent of warm doughnuts. Ngoy became an active fundraiser in the Republican Party, rallying the Cambodian community around business-minded candidates. His acolytes continued marching ahead, opening new shops.

By the mid-1980s, when Dunkin’ was pushing into California, Cambodian shops were prolific, and the East Coast chain had trouble finding a foothold. Chains thrive by building efficient distribution infrastructures and running effective advertising campaigns. With fewer than 20 locations spread across a vast new territory, Dunkin’ Donuts’s distribution and promotion costs in California were unsustainably high. The goal was to reach a critical mass in the new market, at which point the economic equation would invert — relative costs of distribution and advertising fall as the number of locations in a region climbs. But with so much competition, the expansion effort was halting. Dunkin’ decided to cut its losses and began pulling out of Southern California in the early ’90s. Hakmeng Tea, a Cambodian refugee in San Diego who’d chosen to run a Dunkin’ location instead of an independent shop, still remembers receiving the letter from Massachusetts. He was taken aback. Overnight, he lost his supplier and his brand identity. The day after taking his Dunkin’ Donuts sign down, he listened as a longtime customer griped about the new coffee. Exhausted, Tea explained that he was still working his way through the old stock of Dunkin’ beans. The customer was drinking the same coffee he had been the day before. Today, the pink and orange décor inside Tea’s shop will be familiar to many first-time visitors. Other than the name — Sunny Donuts — Tea has changed as little as possible about his restaurant. The old stools still swivel before a funky curved counter, the menu board has the same bubbly font, and even many of the customers are holdovers from the Dunkin’ days. Tea continues to bake his doughnuts — more than 50 varieties — by hand, the way he learned at Dunkin’ Donuts University. On the day I visit in June, he’s making a small batch of plain raised doughnuts. He invites me into the kitchen, where he adds a half pound of yeast, 12 pounds of doughnut mix, and water to the barrel-size bowl of his well-used Hobart stand mixer, which churns the ingredients into a sticky paste. Scraping the goop from the sides of the bowl, he lifts out a ball of dough and places it on a large sheet of flour-covered canvas, which is stretched over a butcher-block table. “The canvas is an old Dunkin’ Donuts trick,” he says conspiratorially. “It makes cleanup easier.” Cleaving the dough blob in half, he sets one portion aside and starts rolling the other flat. The dough is firm and yeasty, and it pushes back aganst his wooden rolling pin at first. When the dough is spread to a half-inch thickness, Tea uses a punch to cut out rings, deftly catching each new one on the fingers of his idle hand. When his fingers fill up, he deals the rings, like playing cards, onto a nearby wire sheet. After 15 minutes in a proof box, which delivers heat and humidity to help the doughnuts rise, the rings have doubled in size and are ready for the fryer. Working with hot oil is dangerous, and Tea has the scars to prove it. As he lowers the tray into a bubbling vat of 365-degree shortening, the doughnuts float to the top. Anyone who’s walked by a doughnut shop knows the smell of sweet frying dough, but in Tea’s kitchen it is intense, almost filling. After a few moments, he flips the doughnuts with a pair of long, delicate sticks. When they’re golden, he removes the tray from the fryer, slides it into a rack, and pours glaze over the doughnuts. The thick mixture melts off, leaving a thin, sugary sheen. The first bite of one of these newly birthed creations seems to disappear as I chew, with only a coating of sweet grease remaining. Kitchens like Tea’s require space, and California real estate is pricey. For its latest push, Dunkin’ has decided not to make its doughnuts in stores. Instead, the company is relying on a process it calls Just Baked on Demand, in which partially baked frozen products are delivered to franchise locations and finished in their ovens. The process will fill shops with a facsimile of the smell in Tea’s kitchen. Dunkin’ hopes its JBOD products will help to avert the supply-chain inefficiency that doomed its first California locations. But a critical mass of stores is still necessary for the expansion to be cost effective, which is why Dunkin’ is racing to open as many locations as it can.

By the time Dunkin’ retreated from California in the late 1990s and early 2000s, the Cambodian American doughnut network was also struggling. Fitness and health-food crazes were sweeping the country, and doughnuts were losing some of their appeal. With thousands of independent doughnut shops in the state, the market was so crowded that Cambodian owners began competing against one another to acquire promising locations. At the same time, the flow of young Cambodian workers slowed to a trickle. A new generation had grown up in America and saw college as a more attractive prospect than long hours spent over a deep-fryer. Ngoy’s personal life was faring even worse. By the mid-1980s, fueled by his multimillion-dollar fortune and surfeit of idle time, his gambling had started to spin out of control. He disappeared to Vegas for long stretches, holing up in casinos to play blackjack and baccarat. Christy and the children drove out to find him on more than one occasion. Ngoy remembers hiding in the maze of card tables and slot machines at Caesars Palace, ashamed to face his family. His business faltered, and he began selling off shops to maintain cash flow. Gambling strained his relationship with his wife, who felt helpless to intervene. In a bid to quit cold turkey, Ngoy joined a Buddhist monastery in D.C. He shaved his head and donned a monk’s robes, and he lived solemnly one day at a time. But when he returned home a month later, his money and his idle time were waiting. He tried a second monastery, this time in Thailand, where the monks weren’t permitted to speak or wear shoes. Ngoy’s feet bled after long walks over the rocky earth, and he lived in poverty, as he had years before. It was humbling, but it wasn’t enough. When he returned home, he went straight to Las Vegas. After two turbulent decades, Cambodia planned to hold free elections in 1993. Well-to-do Cambodian Americans rushed back to set up political parties and participate in the democratic process. Ngoy enjoyed being an uncle figure, a man people turned to when they needed something, and politics would allow him to play that role on a larger scale. He also felt that public life would be good for him: With the country watching, he would have to stop gambling. He sold his remaining doughnut shops, keeping only a single hamburger stand, which he turned over to his daughter. In 1992, with about $2 million in the bank, Ngoy and Christy returned to Cambodia. It didn’t go well. After years of atrocity, Cambodians were generally distrustful of the political process, and they were especially wary of outsiders who wanted to join the government. In the 1993 elections, Ngoy’s party failed to win a single parliamentary seat, though he was eventually tapped as an economic adviser to the prime minister. It was an important role, but one performed largely out of the public eye. After spending the last of his savings on a doomed bid to bring hybridized rice to Cambodia, Ngoy was despondent. His return to his home country had been far from the victory lap he’d imagined. At a low point, while Christy was visiting California, Ngoy cheated on her with a young Cambodian woman, who became pregnant. Christy could weather the gambling addiction, but this was too much. The couple divorced, and Ngoy married his mistress. They would eventually have two children, a girl and a boy. By 2002, the Doughnut King was broke. Hoping that a return to the place that had made him rich might change his luck, Ngoy accepted a plane ticket from an old friend and, for the second time, landed in California penniless. In 2005, a writer for the Los Angeles Times found him living on the screened-in porch of a mobile home in Long Beach. He had converted to Christianity, and nightly he prayed for help. Later that year, racked with guilt for leaving his new family, Ngoy returned to Cambodia. His wife lost patience with him. She had believed he was a wealthy man with a future in politics. At the very least, she thought he would provide a good life for her and their children. She met another man, handed the kids over to Ngoy, and left. Chasing a possible business prospect, Ngoy took the children to the seaside province of Kep, but the opportunity fizzled. Desperate, in his late 60s now, he asked a government minister for permission to stay in his neglected vacation home. The minister would only allow Ngoy and his children to sleep on the porch. This was the wet season, and sheets of rain angled under the porch’s overhang and soaked the meager living space. Each morning, Ngoy carried his children to school on a rusty bike. At night, they survived on noodles. Ngoy replayed his life in his head. It was like watching a movie about someone he recognized but hadn’t seen in years. Staring into the Gulf of Thailand, he prayed a businessman’s prayer, asking Jesus for people, connections.