On a stretch of South Fairfax Avenue dotted by Ethiopian restaurants and thrift stores stands a cake-maker that has been catering to Hollywood's A-list for nearly 60 years.

Hansen's Cakes has produced thousands of elaborate concoctions, from two-story wedding cakes dressed in butter cream and Grand Marnier frosting to specialty birthday cakes made for the likes of John Wayne, Bob Hope and Johnny Carson.

But five years ago, another cake-maker came to Fairfax Avenue -- not just down the street, not just next door, but jammed into a storefront between Hansen's bakery and showroom.

Regal Cake Gallery quickly emerged as a formidable competitor.

The arrangement puzzles and amuses those who come across the battling bakeries. With Regal's display window full of cakes, surrounded on both sides by display windows filled with Hansen's treats, customers often walk into one shop thinking it is the other.

Competition between the businesses has gone well beyond which bakes the best cake.

There have been accusations of recipe thieving, chef pirating, sign trickery, claims that one baker secretly called health inspectors out to the other, even a clash over the display of R-rated cake designs. Both bakers say they are trying to achieve a detente -- but admit it is hard.

"The employees between the two shops have a good relationship; we speak to each other," said Jennifer Center, a sales clerk at Regal. "But there's institutional tension between the two. How can you have a good relationship with your competitor?"

The rivalry belies the sugary happiness that both shops exude. Each bakery is filled with cakes of all shapes and sizes -- a champagne bottle with an edible ice bucket, a soccer ball resting on a field of green frosting. A cake castle stands five feet tall, with sugar-encrusted spires and a cream ivy overhang.

Kirk Rossberg, president of the California Retail Bakers Association and a former Hansen's employee, said the side-by-side-by-side competition is the talk of Los Angeles baking circles.

"It's gutsy -- and pretty bizarre," he said of Regal. "It's a little surprising to go up against somebody that is strong and has such a well-known cake."

In the 1980s, Hansen's Cakes expanded its operation, but in an unusual way. In 1983, the only space available was two storefronts away -- a Chinese restaurant was in between. Real estate in the area was scarce, so Hansen's snatched up the vacant store.

Today, Patrick Hansen, 41, oversees 27 employees producing nearly 100 cakes a day. He says the secret to their success is a patented cake mix -- a concoction of several hundred ingredients known only to people whose last name is Hansen.

A few degrees variance in room temperature can send a batch of batter into the garbage. Refrigerator humidity must be perfect.

He places his cake pans on a composite used for heat-shield tiles on the Apollo space missions. It costs more than $100,000, but Hansen says he can taste the difference.

Through the 1990s, Hansen's continued to grow, eventually adding showrooms in Beverly Hills and the Tarzana section of Los Angeles. One day, the Hansens received word that the restaurant standing between their Fairfax showroom and bakery was about to shut down after an unsuccessful run as an Ethiopian eatery. The family set its sights on leasing the property and finally uniting its operation.

But then entered Rosa Leung.

Compared with the Hansen family, Leung is new to the cake business. After immigrating to California from Taiwan in 1979, she worked as an accountant and ran an import-export business that handled zippers, electric motors and other steel products.

But she was always interested in food. She was a nutritionist by training, and her father worked in the sugar industry.

Tired by the grind of her export business, it came to her one day: wedding cakes.

"A happy business," she says. "It's one of the reasons I jumped in."

In 1995, she and her husband bought Regal Cake Gallery, then a 44-year-old bakery in Los Angeles's San Fernando Valley. Within a year, Leung said, she heard that Hansen's might be interested in selling the business on Fairfax Avenue. She spotted the vacant storefront between Hansen's bakery and showroom and leased it, anticipating, she says, that she would eventually own Hansen's and knock out the walls.

The Hansens dispute her story, saying it was Leung who approached them and offered to buy the business. They said there was a bidding war for the vacant space, and Leung ultimately made the better offer.

So in January 1999, she opened her second Regal Cake Gallery -- right in the middle of Hansen's Cakes. And she catered to the same Hollywood clientele that made Hansen's famous.

Regal made birthday cakes for Bill Clinton and Tipper Gore as well as a going-away cake for George Clooney when he left "ER."

For the movie "American Wedding," Regal made nine five-tiered cakes used in the banquet scene. Customers who have seen the movie have asked for the same cake so many times that Regal includes it in its catalog, priced at $1,000.

The Hansens said they were outraged when Leung decided to open shop in the middle of their business.

The family learned from a lawyer that there was nothing that could be done.

"I was surprised, unhappy, kind of shocked," Patrick Hansen said. "But this is the American way."

Leung says she tries to keep the rivalry out of her mind and to focus on baking the best cake.

"If you have good skill, good quality, good products and good service, that's all you need for business," she said. "If people like my cakes, they will come to me."

Relationships between the two were rocky from the start.

A pastry chef left Hansen's after 16 years on the job. A month later, he started at Regal.

"She went after our ex-employees," said Gary Hansen, Patrick's father. Leung insists the chef approached her -- and only after leaving Hansen's. She even made him sign an affidavit saying he initiated contact.

Then, Los Angeles County health inspectors made a surprise visit to Regal. Leung said the inspectors told her that someone made an anonymous complaint against the bakery. The Hansens deny they had anything to do with it.

The Hansens accuse Leung of sending her family members into their bakery to try free samples so she could figure out what ingredients they use.

Leung laughs off the charge.

One time, Hansen's put a sign on the sidewalk pointing to its bakery.

Leung countered with a sign of her own.

The Los Angeles Department of Public Works arrived, she says, and told her that her sign was obstructing the sidewalk.

"What about their sign?" she said she asked. She turned to point -- and discovered that the Hansen's sign was no longer there.

Patrick Hansen denies setting her up.

A few years later, he said, he told Leung that he wanted to install an awning over his storefront and asked her to sign papers giving her approval.

She said it would have blocked her Regal sign, and she threw the papers away.

Hansen put up the awning anyway. "I didn't hear from her," he said, "so I didn't think it was a problem."

Leung said she suffered with the awning for nearly a year, and finally called City Hall.

The awning came down.

Another controversy arose when Regal purchased another bakery, Exotic Cakes of West Hollywood, and placed some adult-themed cakes in the window display on Fairfax. One of the cakes was in the shape of a woman's breasts covered in pink frosting to resemble a bikini. The cake was on a pedestal that tipped over, pressing it against the window in such a way that passersby were aghast. Leung said she did not notice, but Patrick Hansen did.

"The neighborhood association got really upset," said Hansen, whose bakery also makes adult-oriented cakes. "They came in and talked to us, and my dad said, 'Hey, it's them, not us.' "

Leung moved the display cake inside her showroom. Regal later returned the cake to the outside display, this time with a reinforced stand and placed several shelves higher.

While not exactly light and sweet, the relationship between Hansen's and Regal has improved, although the owners will not go beyond a nod and "good morning" if they happen to meet.

"Sure, I'll say, 'Hi, how are you doing, just fine,' . . . small talk," Leung said. Patrick Hansen said things have been less hostile since his father retired in 2000.

"I think my dad may hold a grudge, just a little," he said. "He's not happy with the way everything went down."

But both stores said the competition ultimately improved each business.

"When Regal bought it, we started to clean up our bakeries, repainted, got the cobwebs out of our windows and opened up a bigger showroom," Patrick Hansen said.

Leung said the competition pushed her to conjure up new designs. One recent creation is a four-layer cake fashioned like Tiffany gift boxes.

Rosa Leung of Regal Cake Gallery leased the storefront between Hansen's bakery and showroom, thinking that she would eventually own Hansen's.When Patrick Hansen's family business expanded in the 1980s, the only space available was two storefronts away.With Regal's windows full of cakes, surrounded on both sides by Hansen's display windows, customers often walk into one shop thinking it is the other.