From Waikiki to the Ninth Island: Erica Lee’s Sweet Bet

In early 2020, Erica Lee was watching a dream unfold across Oahu. What began in late 2017 as a modest food truck outside the Polynesian Cultural Center on the North Shore had rapidly expanded across the island, eventually establishing a bustling outpost on Schofield Barracks. Penny’s Malasadas was running on pure momentum, sharing warm, sugar-dusted Portuguese pastries alongside generous helpings of genuine aloha.

Then came the silence. When the global pandemic grounded passenger flights and cleared Hawaii’s beaches, the tourism-dependent economy collapsed almost overnight. Lee watched her vibrant network of food trucks close one by one, shrinking Penny’s back to a single, precarious outpost. Operating on an island stripped of its visitors, survival meant relying solely on the quiet loyalty of neighborhood locals.

When the Island Went Quiet

The abrupt downturn was enough to shutter seasoned operations, but Lee refused to let panic dictate the menu. Instead of walking away, she treated the crisis as an exercise in community endurance, keeping her lone fryer running and leaning entirely on the residents who came by to keep the lights on.

For Lee, the season wasn’t merely a financial bottleneck; it was a clarifying test of conviction. "We learned that staying true to our passion and focusing our dedication to our community and helping each other heal gave us a strength through one another," she reflects.

The High-Stakes Waikiki Gamble

By 2022, while many business owners were still treading cautiously, Lee opted for audacity. Gathering every remaining resource, she made a monumental bet on prime real estate: leasing a flagship brick-and-mortar inside the Royal Hawaiian Center in the heart of Waikiki. Taking on the astronomical rents of Kalakaua Avenue during an uncertain recovery was an enormous risk, but the gamble hit immediately.

Lines began wrapping around the corridor, drawing visitors eager to watch pastry dough rolled and prepared in real time through an open glass display kitchen. Penny’s rapidly picked up Best of Honolulu honors, shifting from a struggling pandemic survivor into an iconic destination for both travelers and kamaʻāina.

Culture Over Franchising

With national acclaim came frequent suitors. Private investors and franchise brokers came knocking multiple times a year, offering turnkey expansion models. Lee turned them all down.

Rather than diluting quality or treating the brand as an off-the-shelf franchise, she anchored growth to the people who had stood behind the fryers during the darkest months. Her growth philosophy became fiercely protective: expand only when a new store can be handed over to existing team members who understand the culture firsthand. For Lee, scale without soul was a hollow victory.

Planting Roots on the Ninth Island

When the time came to look beyond Oahu’s shores, only one destination made sense. Southern Nevada had long earned its affectionate moniker as Hawaii’s "Ninth Island," home to an expansive diaspora and deep cultural ties to the Pacific.

Lee brought Penny’s authentic Portuguese-Hawaiian malasadas across the ocean, staking a claim on Southwest Las Vegas’s bustling Blue Diamond Road. Dropping into a corridor already recognized for standout bakeries, Penny’s offered something uniquely transportive—warm, artisanal pastries carrying the distinct weight of island heritage.

For Lee, entering the desert market has also provided a new compass for defining achievement. "To me, success is now measured by quality of life and the quality of our Penny’s families lives," she says. "And success is also measured by sheer volume of joy and happiness we bring to our customers!"

Rather than stopping at Blue Diamond, Lee is actively scouting sites for a second and third shop within the valley. In a metropolitan area welcoming millions of visitors alongside a thriving resident community, she sees plenty of room to share the aloha spirit—one handcrafted pastry at a time.