Miami Subs’ New Owners Revamp Brand
The new management of Miami Subs Pizza & Grill likes to refer to the chain as an almost 20-year-old start-up.
The description is a fitting one for the Fort Lauderdale company, which is trying to breathe new life into a once well-known regional brand that lost its luster over the last decade.
During the 90s, the neon-colored Miami Subs restaurants were on street corners across South Florida and the brand had a strong regional following. At its peak, the chain had 170 restaurants.
But after founder Gus Boulis sold out in 1998 for about $14 million to Nathan’s Famous, the brand languished as the forgotten step child. The number of Miami Subs restaurants dropped by almost two thirds and the brand had virtually no television advertising.
“They were hoping to turn the Miami Subs stores into Nathan’s,” said Lawrence Austin, the company’s new president and chief operating officer. “But Nathan’s just didn’t have the brand identity in the Southeast to give them the return on investment they were looking for.”
Instead, Nathan’s sold the chain in May 2007 to Austin’s group Miami Subs Capital Partners 1 for $3.25 million. The brand was down to a little less than 60 stores, located predominantly in South Florida plus locations in New Jersey and the Carolinas.
Austin’s group believes in Miami Subs’ growth potential. It has already invested several million into the company.
“We needed a chain that had the brand recognition to be able to grow to 500 stores over the next five years,” said Austin, who previously was chief operating officer of Pizza Pizza in Toronto.
One thing they liked about Miami Subs is that despite a lack of investment and attention from Nathan’s the stores had maintained average unit volume sales of close to $900,000.
The big reason the chain survived and remained profitable during those years is that consumers typically give Miami Subs higher that average marks for its food. The menu is closer to fast casual with items like gyros, chicken wings, grilled chicken pita, Philly cheese steak and chicken Ceasar salad. Plus, the chain still offers Nathan’s hot dogs and Arthur Treacher’s fish.
“The food has stood the test of time,” said Dan Holland, former Papa John’s president, who is working as a consultant for Miami Subs to recruit franchisees. “It has great customer acceptance. Any successful concept has three things — image, product and people. All those things are here.”
Brian Cummings’s favorite Miami Subs food are the gyro and wings.
“I love Miami Subs,” said Cummings of Hollywood, who visits about once every 10 days. “It’s the top end of fast food. Anytime I’m near Miami Subs I go.”
But industry experts say the new ownership should consider paring down the broad menu.
“Executing on all those products consistently well is very difficult,” said Dennis Lombardi, an executive with restaurant consulting firm WD Partners. “The brand has never had one signature food item that builds unaided awareness for the consumer. That hurts because they’re not in the consumer’s mental phone book.”
The only thing Austin and his team have taken off the menu is Kenny Roger’s chicken. They are also testing some Latin items for the menu. They believe the variety is the company’s asset.
