March 4, 2015

Tall Order

Miami Subs and Pitbull team up to revive the restaurant chain

| 1/2/2014

Miami Subs had 200 stores before things blew up. It now has 40 and a high-profile investor as it tries to make a comeback.

At a party in 2012 at the Shelborne Hotel on South Beach, Richard Chwatt, CEO of the New Miami Subs Grill, announced a new equity partner for the brand: Homegrown Miami superstar entertainer Armando Christian Pérez. Call him Armando, or by his initial stage name of Pitbull, or by its evolution to Mr. 305, as in the Miami area code, or by the latest, Mr. Worldwide. Just don’t call him a pitchman.

“We’re not here to endorse,” Pérez, dressed in a dark sport coat and light slacks, told the glittering club audience. (Miami Subs recorded the scene, complete with a Pitbull soundtrack, and posted it on You- Tube.) “We’re partners. Miami Subs executives go out of their way to say Pérez isn’t a pitchman. “He’s a real equity partner. You’ll never see him with a hamburger in his hand hawking our food,” Chwatt says in an interview.

Pitbull’s investment — the size of which hasn’t been disclosed — may pay off with publicity, but Miami Subs will need all the help it can get as it tries to restart a chain down to 40 stores from 200 at its peak.

The chain was started under the legendary Konstantinos “Gus” Boulis, a Greek immigrant who launched the chain in 1988. A pioneer among fast-casual restaurants, Miami Subs had a long and eclectic menu and an atmosphere that radiated Miami. It had a tropical neon color scheme, pink flamingo murals, was open late and sold beer and $100 bottles of Dom Perignon. As Pérez says in one video, “Every time I walked in there, it made me feel like I was in a ‘Miami Vice’ episode.”

Boulis’ story certainly ended like a “Miami Vice” episode. He sold his stake in Miami Subs in 1998 as he moved into gambling ships. He was murdered in 2001 in Fort Lauderdale as he drove home from work, his car coming to rest near a Burger King [“Murder on Miami Road,” September 2003, FloridaTrend.com]. The story played a prominent role in the movie Casino Jack, a 2010 biopic about disgraced lobbyist Jack Abramoff, played by Kevin Spacey. One of Boulis’ killers was convicted in October.

Miami Subs, meanwhile, dissipated under owner Nathan’s Famous. The hot dog purveyor sold the chain in 2007 to a Boca Raton group whose controlling interest was held by Chwatt and his longtime friend and business associate Bob Vogel (no relation to this writer.) Vogel had industry experience as an owner of scores of Burger Kings in the Northeast. Chwatt had run a private investment banking and finance company for years.

In an interview at company headquarters, which, incidentally, isn’t in Miami but in an office building behind a Subway store in suburban Fort Lauderdale, Chwatt is a mix of candor and circumspection. He volunteers metrics on how various menu items perform and says that Miami Subs had, until recently, “the worst hamburger in history. It tasted like a hockey puck, I swear to you.”

Chwatt wouldn’t give his age — about 75 is all he’ll say — and is reticent on how much he’s invested, beyond saying “millions of dollars.” At Miami Subs, Chwatt and Vogel stayed passive investors until 2010, when Chwatt took over management. “Our mantra to the franchisees was renovate, relocate or terminate,” Chwatt says. “We recognized we had an old, tired brand that needed a revitalization.”

One buyer, John Nakis, had cashed out of four Miami Subs stores he owned in 2007 but has joined back up, recently opening a Miami Springs restaurant. “It’s a much tougher market now than it was when we first started,” Nakis says.

As for product, Chwatt kept the menu long and varied — the gyros remain as does the chain’s best seller, chicken wings — added Latin-themed food, brought back the Dom Perignon and is adding craft beers and wine. He’s pushing made-to-order freshness and authenticity. The gyro meat and tzatziki sauce come from a Greek supplier in Chicago, says Frank Baran, vice president of operations, an executive under Boulis whom Chwatt brought back. To solve the burger “puck” problem, Miami Subs switched to fresh Angus beef from frozen. It not only tastes better but also with its higher price point delivers a better profit margin, Baran says.

Tags: Miami-Dade, Around Florida

Digital Access

DIRECT DIGITAL ACCESS
Add digital to your current subscription, purchase a single ditgital issue, or start a new subscription to Florida Trend.

TABLE OF CONTENTS
An overview of the features and articles in this month's issue of Florida Trend.

ACCESS THIS ISSUE »

Florida Business News

Florida Trend Video Pick

When is the right time to pursue an MBA?
When is the right time to pursue an MBA?

Nova Southeastern University's Huizenga Business School's panel of corporate executives, students and faculty answer questions related to the Value of the MBA degree.

Earlier Videos | Viewpoints@FloridaTrend

Ballot Box

Do you think an MBA - or other advanced degree - is crucial for success in the business world?

  • Yes
  • Maybe, but only if you get that degree from a respected university
  • No

See Results

Ballot Box
Subscribe