Most new Chuy's were once another concept. CEO Steve Hislop says it's less expensive to remodel an existing restaurant than build a prototype.

Five or six? This year? In this economy?

“Chuy's was capitalized with the intent to fund growth,” says former investment banker Rod Guinn, who has advised Goode Partners LLC, the full-service chain's owner since 2006.

Joe Ferreira, a partner in the New York private equity firm, says the company's debt, which he would not disclose, shouldn't interfere with expansion plans: “Chuy's has acceptable financing for the foreseeable future.”

In any case, conversions are less expensive than ground-ups. The total cost for a conversion ranges from $800,000 to $1 million. Chuy's 6,500-square-foot prototype is about $200,000 more. So far, the company has remodeled several barbecue restaurants, including a Smokey Bones. “I'm looking to convert anything from 5,000 to 9,000 square feet,” Hislop says.

Although Chuy's was created 25 years ago by Austin restaurateurs Mike Young and John Zapp, who have left the company, rapid growth wasn't on the agenda. Only eight of the funky Tex-Mex joints sprang up during their tenure.

“Mike and John opened a Chuy's only when they had someone ready to become a general manager,” Hislop explains.

Hislop has markedly stepped up growth since joining Chuy's in 2007, opening four units in 2008 and hiring 42 outside managers. This year, he expects to open at least five more, ending '09 with 17 restaurants. As he did last year, Hislop will open restaurants in existing markets: Austin, San Antonio, Houston and Dallas.

Chuy's popularity may be attributed to its kitschy, offbeat decor, featuring hubcap-lined ceilings and shrines to Elvis. “Our motto has always been, 'If you've seen one Chuy's … you've seen one Chuy's,'” Hislop says, referring to the layout, which is designed to look as if dining rooms have been added over time.

Made-from-scratch dishes have also contributed to Chuy's success, says Hislop, who describes the food as “the old style of cooking.” The menu features tacos, burritos, fajitas and enchiladas. Beverages, mainly margaritas and beer, account for 20 percent of sales.

Hislop believes such positioning will produce similar topline results in Nashville; Birmingham, Ala.; Memphis, Tenn.; and Louisville, Ky., Chuy's target markets in 2010. “We will connect the dots going down I-65, right through Alabama and over to I-10, which swings back to Houston,” he says.