Sign of success
Iconic Tex-Mex restaurant famed for funny signs cooks up Texas expansion
El Arroyo — the iconic Tex-Mex restaurant in West Austin that’s famous for the witty, sassy, ever-changing messages on its black-and-white outdoor marquee sign — is branching out.
The restaurant plans to have five more restaurants in Texas open or under construction within the next three years. For now, El Arroyo’s sole location is at 1624 W. Fifth St.
El Arroyo’s first location outside Austin will be at the popular Gruene historic district in New Braunfels. Next year, a two-story building under the landmark Gruene water tower will be remodeled for El Arroyo. The building is on the site of tubing company Rockin’ R River Rides, co-owned by the head honchos at El Arroyo.
Ellis Winstanley, co-owner of El Arroyo with wife Paige, says Dallas-Fort Worth, Houston, and West Texas are among the places being considered for new locations. And he doesn’t rule out a second location in the Austin area. Each of the new restaurants will seat about 180 to 220 customers.
Winstanley says each restaurant will serve the same menu as the West Austin location. And the décor and vibe of the new spots will parallel that of the original restaurant, which opened in 1975.
“It’s not going to all of a sudden become a fancy place with a high price point or something like that,” Winstanley says.
So, what about the black-lettered sign that’s synonymous with El Arroyo?
Every new location will feature a version of the Austin sign, serving up the brand’s “same personality and voice,” Winstanley says. How the Austin sign will be replicated at other restaurants is still being worked out. Whatever all-caps message appears on the Austin board at the time will likely be repeated at the other locations, although the lettering and the sign itself won’t be identical, he says.
“It’s not going to look exactly the same, no matter what you do,” Winstanley says.
All of restaurants will be owned by the same group that controls the West Austin location, he says. El Arroyo might consider a franchise model in the future, though.
Expansion has been on the table at El Arroyo for seven or eight years, Winstanleysays. But a couple of things held back the Winstanleys, who bought the restaurant in 2012, and their investment partners.
“One, we didn’t feel like we had a clear handle on what we really wanted the brand to become at that point. It’s been an evolution,” Winstanley says. “And then secondly, the real estate market was nuts.”
You might say the growth of the El Arroyo brand has been nuts.
Aside from operating what’s transforming into a restaurant chain, El Arroyo sells an array of branded products — almost all of them starring clever messages from the restaurant’s sign. These include books, coffee mugs, party cups, coasters, cocktail napkins, candles, ballcaps, T-shirts, calendars, magnets, car fresheners, yard signs, and YETI coolers.
Also on tap are El Arroyo’s first two packaged foods — salsa (set to roll out later this year) and margarita mix (coming out sometime after the salsa).
The progression of the El Arroyo brand has been steady and methodical, according to Winstanley.
“The wheels start to come off as people take a big slug of equity, and their goal is to produce as high of a return as possible. So they just start going as fast as they can,” he says. “Sometimes it works out, and a lot of times the brand really loses its identity.”
“We have the opposite incentive,” Winstanley adds. “We have different lines of businesses that need to stay in sync to be successful. And the brand has a very clear voice. It’s not trying to figure out who it is.”
