Start by preparing the Chili-Infused Simple Syrup. Place the sugar and water in a small sauce pan and bring to a boil. Reduce heat to low and simmer, stirring frequently, until sugar dissolves, about 2 minutes. Add chili slices and remove from heat. Let chilis steep in simple syrup until syrup is cooled. Drain, then refrigerate for up to 5 days. Note: If you need the syrup sooner, place in the freezer to quickly bring down the temp before draining the chilis.
When you're ready to make the cocktail, place the tequila, grapefruit juice, lime juice, and chili-infused simple syrup in a large pitcher and stir well. Place the sugar and salt for the rub on a small plate and mix with a fork to combine. Run a lime wedge along the rim of each glass then carefully dip the glasses into the sugar-salt rub until coated.
Fill the cocktail glasses with ice and pour mixture until 3/4 full. Top off each glass with club soda and fruit garnish to serve.
To make mild, remove the pith and seeds from the chili pepper. Otherwise, to keep spicy, follow recipe as is, using sliced chilis whole with the seeds and pith.