60-year-old restaurant celebrates its niche

Filed under: Business Spotlight |

OK, so Velveeta isn’t officially a part of the Atkins diet. The customers at a Conway’s Red Top family restaurant really don’t care. After all, it’s the lure of curly fries, the famous half or whole hamburger or cheeseburger combo, the thick shakes, homemade soups and other mainstays that bring people back year after year.

But as a second generation of family members take over, led by general manager Bill Stahelin, the six-store restaurant group will be making a few changes.

Stahelin is the son-in-law of original Conway family member, Mary Kay Qualey and admits that he plans to update the operation and menu, but will hold fast to the company’s overall reputation for home-style “comfort” foods.

His roots with the company run deep. The former Toyota regional marketing representative worked for the Conway family in the 1970s while attending Palmer High School and the University of Southern Colorado. He met and married wife, Leslie, the owner’s daughter before leaving the business to embark on a career in the automotive industry.

“There’s a lot of carryover between car and restaurant marketing,” he said. “In both cases, you have to understand your customers and cater to them.”

He returned to Red Top in 2002. “Mr. and Mrs. Conway wanted to take their successful concept and duplicate it in new locations,” he said.

Stahelin developed a business plan with input from Mary Kay Qualey (the eldest Conway daughter), Dan and Rich Conway and sister, Patti Jo.

“I used a lot of the market data from Toyota for Front Range markets,” Stahelin said. “They’ve identified growth areas like Denver’s LoDo or the redevelopment area around the old Villa Italia shopping center. We’ve been looking at those markets, but in order to open there we’d have to start with multiple locations which doesn’t make financial sense right now.”

As a 60-year Pikes Peak region institution, Conway’s Red Top operates six stores – five throughout Colorado Springs and its newest diner in Pueblo, which opened in November 2002 to record-breaking crowds. “Things have settled down,” Stahelin said, “but it’s still our second busiest, after the South Nevada location which seats up to 200.”

New frontiers for the company could extend from Castle Rock to Aurora to the Falcon area. “It’s too expensive for us to develop our concept as a stand-alone restaurant along Powers Boulevard right now. We look for 100,000 to 125,000 surrounding population to ensure success,” he said. “Our focus is on future family business.”

If there’s one thing Red Top’s owners have learned, it’s to stick with what they know and to do it well. “Unlike typical hamburger chains, we use fresh meat and offer full, sit-down service at competitive prices,” Stahelin said. That philosophy has paid handsome dividends. This year, company revenues are projected to reach $5.5 million.

Stahelin and his managers, however, continually evaluate what items to offer their customers. Last spring, the restaurant added several salad offerings and began “Kids eat free” on Monday nights. “Two stores are promoting a green chile burger and all will substitute salad for French fries with all combos on request,” Stahelin said.

When it comes to financing growth, Stahelin is poised to move when a legitimate opportunity appears.

“Lenders typically don’t want to take the risks associated with our business,” he said. “Fortunately I’ve found a couple of bankers that have supported our growth. I can call them and say ‘Here’s what I need,’ and they respond.”

Although the eatery has survived decades of economic cycles, it felt the past year’s exit and return of the Fort Carson troops more than most. “Our business was off as much as 20-percent at the South Nevada location,” he said. “Of course, we also knew the day the first plane landed bringing the soldiers back from Iraq based on increased activity.”

In a November 2003 University of Colorado at Colorado Springs marketing study, Conway’s Red Top earned a customer loyalty rating of 75-percent, which means the restaurant likely will be packing ‘em in long after Atkins, South Beach and Perricone have come and gone.

-Becky.Hurley@csbj.com