Bao was an ARVN officer who later became the owner and bartender of the Yellow Flag Bar. The name refers to the old flag of South Vietnam, which had three narrow yellow stripes running through it. Originally founded by Bao after he fled the country following the fall of Saigon, the bar is now a favorite watering hole for the Lagoon Company. Rock described the bar as an archetypal Bar at the end of the world during his first visit while he was a hostage of the Lagoon Company. The clientele often includes pirates, smugglers, prostitutes and people who have lost all hope for the island. Weapons are usually displayed openly on the bar's tables as an unwritten rule. Despite having a bulletproof-steel plate in front of it, the Yellow Flag Bar is not immune to gun battles, which often occur there. Whenever Revy or the Lagoon Company is involved, Bao demands payment from them for fixing the bar afterward, but this demand is usually ignored by Revy or Dutch.