The Advantageous Donut: Economic Viability
Donut shops had another advantage: a relatively low and attainable cost of ownership and operation. Although an associate of Ted Ngoy’s named Scott Thov reported that opening a small store in the 1990s required an initial investment of about $80,000,22 recent arrivals used various means to accumu- late the necessary capital relatively quickly. According to Hak Lonh, a Cam- bodian film director with two aunts and numerous cousins in the donut busi- ness, many refugees worked low-wage jobs (e.g., Ngoy’s stint as a janitor) until they could combine their savings with loans obtained through informal credit arrangements.23
In many cases, friends and family provided additional funds, often in the form of direct loans. Helen Chin, a retired donut shop worker who spent fif- teen years in the business, used money she earned as a seamstress to help her husband’s niece and nephew open the store in which she later worked.24 Fam- ily and friends also contributed less tangible forms of support. For example, shop owner Nally Yun told a Sacramento Bee reporter that she and her hus- band Roger lived with their parents “so we could save some money and fly on our own wings.”25 Apprenticeship arrangements, in which a more experi- enced baker or store owner would train a newcomer to the business, also were common. Susan Chhu, who runs Sunrise Donuts in Rosemead, California, reported that friends who owned donut shops trained her husband to bake and helped them set up their business shortly after their arrival in the United States.26 Allen Dul of Mr. Steve’s Donuts in Rosemead embarked on a sort of
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reverse apprenticeship: hiring a friend with experience in the donut business in order to learn how to operate the shop he had recently purchased.27
The Yuns raised a portion of the necessary money to buy their shop, How- ard’s Donuts, through a tong tine, another common source of capital. The Bee describes a tong tine as an “informal lending club that allows immigrants to pool their money.”28 In the Houston Press, Claudia Kolker elaborates:
This is how it works: typically, anywhere from six to thirty friends will con- tribute a pre-determined sum at weekly or monthly meetings. Then, through lotteries or a group decision, each member gets a chance to collect the whole pot. After drawing the money, he or she keeps paying the installments until each group member has had an opportunity to take home the accumulated money. Only when a cycle finishes may a new member sign on or participants drop out. More often, though, the same participants begin again. In some groups, they take their place in line by lottery; in others, they may compete with secret bids of ten or fifteen dollars that go back to the pot.29
The tong tine has many different names30 and is common among Asian, Afri- can, and South American immigrants. Los Angeles community business developer Namoch Sokhom described Cambodians’ specific adaptations of the practice using a theoretical example:
Let’s say Mr. Sok needs $10,000 for a down payment to buy a donut shop. He has been known in the community to be upright and trustworthy. In January 2012, he calls a meeting of ten close friends who know how to “play” and can put $1,000 each per month. Thus, for January 2, 2012, Mr. Sok is the mei tong tine (the mother or the head of tong tine . . .) and he gets the full $10,000. In Feb- ruary 2, 2012, if the kon tong tine #1 (the child of . . .) needs the money and she bids the highest against the other 9 kons tong tine, let’s say 5% . . . then she wins. She will get a total of . . . $9,500. In effect, she pays the interest up front. She is considered “dead,” i.e. she will not be able to bid anymore for the rest of the pool period. On March 2, 2012, kon tong tine #2 also need the money and bid at 4% and the highest, so then he will get $9,800 . . . #2 is now “dead” also. And so forth. On October 2, 2012, kon tong tine #10 will not need to bid and after a long wait and 10 months pay ($1,000, $950, $980 . . .) now #10 get a sum of $10,000.31
If Mr. Sok needs more than $10,000 he could organize at the tong tine with a head of $5,000. If 10 members, he would then get $50,000. In the U.S., $1,000 is most common and easier to find a member to join, and 15 members or less. If he needs more than $15,000 he can organize two pools.32
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The titles of the participants in a tong tine—“mother,” “head,” “child,” and so forth—as well as the groups’ relatively small sizes indicate that these business arrangements could bring Cambodian refugees together in a kind of kinship. Thus, in terms of trust, obligation, and social bonding, this type of lending may not differ widely from the forms of family monetary support described earlier.
Of the many strategies employed by Cambodian refugees for raising capital to buy donut shops, the tong tines were perhaps the fastest, most economical, and most effective. The Cambodian variation of the arrangement allowed ref- ugees to swiftly receive and pay back money. The loans were both tax free and interest free, supporting Kolker’s assertion that informal lending clubs exist “to save money, not to make it.”33 Perhaps most important, they made cash “quickly available to those who couldn’t otherwise get credit.”34 As Sokhom notes, tong tines were common for “Cambodian who cannot get a bank loan or did not know how.”35 In Lonh’s words, being able to “kind of avoid the bank”36 through personal savings, the help of friends and family, or the support of a tong tine, allowed Cambodians swifter access to independent business owner- ship with lower initial expenditures and fewer long-term costs.
Furthermore, the equipment, supplies, and labor required to run a donut shop are inexpensive. The necessary machinery for automated donut pro- duction, continuously streamlined since its invention in 1920,37 is cheap and eliminates the need for costly labor or extensive training. The required sta- ples—flour, sugar, and oil—also are plentiful and even cheaper. Prepared donut, glaze, and filling mixes—introduced in the late 1920s for use with auto- mated donut-making equipment and frequently reformulated throughout the twentieth century—ensure a uniform product, allowing workers with no prior knowledge of pastries to master the baking of donuts in a short amount of time and also lowering labor costs.38 Like the restaurant owners that Miri Song describes in Helping Out: Children’s Labor in Ethnic Businesses, donut shop pro- prietors relied on the labor of their children, other relatives, or friends in order to further reduce expenses.39 Indeed, a family of just three to five people could manage a shop independently.40 If additional labor was necessary, extended family and friends usually provided it. Chhu and her husband ran their shop with “just family”41 for many years, relying on the aid of their three children until each of them left home. With the business firmly established and family unavailable, they began to “hire part time,”42 employing Latino or fellow Chi- nese Cambodian workers. Dul’s daughters often take care of Mr. Steve’s Donuts on Sundays, allowing their father an occasional day off.43 Lonh describes his cousins helping out in his aunts’ shop, and Chin’s daughter Christina Nhek
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remembers folding boxes alongside her mother as a child.44 Refugee assistance programs rarely fund child care, and being able to include children in the work of a donut shop allows parents to earn an income when they may not be able to do so otherwise.45