No Lolo at Cholo's

A lone wolf weaves himself into the tight North Shore community

Steve Ellis, owner of Cholo's Homestyle Mexican Food

Steve Ellis is a study in contradictions: A 57-year-old skater kid; a Mexican restaurant owner who doesn’t love Mexican food; a hardened survivor of New York ghettos who comes off more like the honorary mayor of Haleiwa. Behind his hippie locks and Miami Vice shades, Ellis is also one savvy entrepreneur. His restaurant, Cholo’s Homestyle Mexican Food, pulled in $3.5 million last year.

“We do 1,000 plates a day, plus appetizers and side orders,” Ellis says. “That equals a plate coming out every 30 seconds, all day long. That’s a restaurant dream.” Cholo’s opened 13 years ago as a bypass road was being constructed just outside Haleiwa. “Everyone thought the road would put the town out of business, but I knew it was only going to help,” Ellis says. And he believed in tourism -- the sleepy surf town of Haleiwa was going to become THE coolest place to be.

Of his $10,000 seed money, half paid the rent and $2,500 went to HECO. This left only $2,500 to start a restaurant from scratch. “It was a tricky time to open. But we made it work with what we had; reinvested everything we made,” he says.

Ellis quickly learned where every penny came from, where every penny went, what the numbers should be, and could be. He planned to build a local clientele first, then, somehow, lure Waikiki tourists to Haleiwa.

“I called and called, and finally convinced the Oahu Drive Guide to cover the North Shore because of the bypass road,” Ellis says. “Right then, I learned my formula: invest X amount of dollars into solid advertising and watch my return walk through the door. Advertising in the Drive Guide pumped up our business 20 percent to 30 percent, right out of the gate.”

Each year, Ellis spent a whopping 15 percent of his gross on print and radio ads – with no regrets. “This is heavier than what’s recommended,” he says. “but every $500 spent on advertising, for example, got me $7,500 to $10,000 in business.” Though today he spends only 6 percent of his gross on advertising ($250,000 in advertising every year, not including special events such as the Triple Crown of Surfing), it’s enough to bring in an estimated 200 new customers daily.

Cholo’s got a liquor license in 2004. The restaurant was already grossing $100,000 to $120,000 per month, but Ellis was certain that business would boom even further. “But everything was handwritten; nothing was on computers,” he says. “It was time to tighten up the whole deal.”

One by one, he met with software vendors. He started with a simple question: Can your system configure the orders by the cooking time for each dish, no matter how the wait staff keys it in? “I can make you a taco in seven seconds,” he explains, “but if your wife orders a chicken fajita, that’s going to take me 7.5 minutes. If your kid orders an enchilada, I’ll need four minutes. And I don’t care if you’re a party of 20, we serve every plate at the same time.”

The vendors looked at Ellis “like I’m crazy; like I’m trying to reinvent the wheel,” he recalls. Then he met with Maui-based A1POS Systems, which supplies “Restaurant Manager” software.  The kitchen staff timed every item they made, and A1POS Systems configured the data. Now, the longest cooking fajita is always on top of an order. Chimichangas are right under it. Tacos are at the bottom.

 

Secrets of Success

ON TIME, ALL THE TIME: Cholo's computer system configures orders so every person at a table gets their food hot and at the same time.

Despite the remarkable growth in sales (from$20,000 per month in 1995 to $300,000 in 2007), Ellis resisted expanding his restaurant’s square footage or number of staff. The question had become: How to maintain the quality of food and service? “You make a business grow, but then you need to cover the production end,” he says. “I used to make the dish right 100 times a day, now I have to make it right 1,000 times a day.”

The answer was consistency. Ellis had no prior restaurant experience. But he knew manufacturing. So, the restaurant was his retail store; the kitchen, his manufacturing plant. With this approach to food production, his priority was to eliminate steps. He moved the coffee maker to reduce the number of steps waitresses had to take, set up the kitchen production line so no one had to move, and added the computer system that could think for the staff.

“We didn’t increase by one human [in the kitchen]. The same three guys were putting out the food when we were 100 plates a day,” he says. Yet, the customer base continues to grow because “we always pull it off. Even when the whole town is popping (and it doesn’t matter where you go to eat; there’ll be a line), locals will say, ‘Let’s just go to Cholo’s because we know that, once we get a table, we’ll be out of there in 30 minutes.’”

Keeping the restaurant small (about 100 seats) also helps with ambience. Cholo’s has retained its persona; it’s cozy and likable. A “family” feeling among the staff adds to the ambience. Staff turnover is surprisingly low for a restaurant. In the kitchen, in the food prep area and on the dining floor – many staff have worked at the restaurant since it first opened. “My crew is super loyal,” Ellis says. He points out a passing waitress, who left Cholo’s to attend college. She obtained her bachelor’s degree, teaching certificate, even a master’s. Then, she returned to Haleiwa to teach — and to Cholo’s, to wait tables around her school’s schedule. “She makes more money here than as a teacher,” Ellis says with a laugh.

“Haleiwa is a lifestyle-oriented town; we’re all here for lifestyle first, work second,” Ellis says. “It’s all about getting longevity out of your em-ployees, because once you enable them to make money and live the lifestyle they’re here for, then they don’t want to change jobs. They’re set, and you’re happy.”      

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