"When my husband died, it was like a tornado hit me," Chao said. "This is like a second tornado."

Representatives from Starbucks have cited a Sept. 24, 2002, Wall Street Journal article that states independent coffee shops thrive when a new Starbucks moves in nearby. Independent shops are said to offer unique localized environments that Starbucks cannot match. Competition from Starbucks is said to energize neighboring shops while educating the public on coffee, which increases demand and leads to more profits for independents.

But Chao doesn't buy that line of reasoning. "It's the same coffee--latte and cappuccino," she said. "That's why I'm scared. How many coffee shops can you bring to the Village? When you're fighting a big chain, it's not easy."

Chao has run the International Coffee Exchange on Big Basin Way for the last four years. Her nephew, David Lou, co-owns the shop but said Chao is the primary owner and in charge of day-to-day operations.

"The economy hasn't been great," Lou said. "We're just breaking even." Lou agrees the city needs to do more to help local businesses but sees Starbucks as a threat to his coffee shop in a part of town already crowded with competition.

Lou has butted heads with Starbucks before. His family owned an Orchard Valley Coffee in San Jose but broke its lease after a Starbucks moved in nearby. And he said another Orchard Valley Coffee owned by his family in Campbell is feeling the heat from Starbucks.

"I have nothing against Starbucks," Lou said. "I go there myself. I don't know if they're going to put us out of business, but it's definitely going to hurt our business further. Right now we plan on sticking it out and seeing how it goes. But if we have a potential buyer, we'll look into that as well."

On this sunny Saturday afternoon, customers sit at the tables and chairs at the International Coffee Exchange on Big Basin Way. Several customers sit at the tables out on the patio.

Rainer Paetzel, visiting from Germany, pours cream and sugar into his cup. Asked whether he would have chosen Starbucks instead if it were open down the street, Paetzel says, "In principle, I'm against these chains. To run a business like this, it's a private entity, which I like more."

Mary Chen, who lives in Saratoga, is on the patio surfing the Internet on her laptop computer. She says she comes to the International Coffee Exchange about once a week. She won't start going to Starbucks mainly because it charges for wireless Internet. "[The International Coffee Exchange] is the only place with free Internet access," she says. "It has nice outdoor seating and the people are friendly."

Jim Houston, from Los Angeles, visits Saratoga several times a year to see his brother-in-law. He says whenever he's in town, he always stops by the International Coffee Exchange. "They're nice people," he says. "They try hard. It's just more personal."

Houston says he thinks competition from Starbucks will hurt the International Coffee Exchange. "It's certainly not going to help this place. I hope their loyal customers stick with them."

Saratoga Vice Mayor Norman Kline is one of Chao's loyal customers. For Chao, it was a difficult moment to watch Kline vote in favor of allowing Starbucks to come to the Village, especially after presenting the city council with a petition in opposition to Starbucks signed by more 1,000 people.

Kline said he voted to approve the conditional-use permit because he thought a new Starbucks would help invigorate the business climate in the Village. Despite his vote, he has continued to visit Chao's shop for his daily cup of coffee.

"I hope that this will actually improve her business," Kline said. "If a significant number of the people who signed the petition continue to visit the independent coffee shops, then they won't have a problem. They simply have to continue doing what they're doing."

Lou hopes Kline is right, but he worries about his aunt, who is a widow trying to raise four daughters. The International Coffee Exchange is her sole source of income, he explained. "It's been a rough journey for her," he said.

Chao came to the U.S. in 1981 as a 12-year-old when her family fled turmoil in Cambodia. Her father saved up enough money to open a doughnut shop in San Bernadino. When Chao graduated from high school, she wanted to go to college but had to help her father around the store. She later moved to the Bay Area to help out at her sister's doughnut store in Willow Glen. After marrying, she and her husband, Pao Chao, opened a doughnut shop on Camden Avenue in San Jose. The couple sold that shop and opened another in San Francisco on Mission Street, but after experiencing problems in a rough part of town they turned the shop over to Chao's sister.

The growing family then moved to Tracy where they bought a store from Winchell's Donuts. But in March of 2001, Chao's husband died of a sudden heart attack. Two weeks later, her husband's business partner took over the shop, forcing her out and leaving her and her four daughters with no source of income and no place to live.

Chao and her daughters moved in with her sister's family in San Mateo, sleeping on the floor while trying to get their lives back together. When Chao asked if she could run her sister's coffee shop in Saratoga, her sister agreed and turned over the International Coffee Exchange to her, enabling Chao and her daughters to get back on their feet.

But now with Starbucks moving in at the head of the Village, Chao feels her future has once again become uncertain. She worries how a privately-owned shop can compete against a popular corporate giant. But she hopes she can keep her doors open and remain in Saratoga.