Miami Subs Rebrands, Offers New Franchising Opportunities
Renovate, relocate or terminate. That’s Richard Chwatt’s mantra as the CEO of The New Miami Subs Grill rebrands a concept born when the Bee Gees and white suits with black T-shirts were in vogue.
Chwatt bought Miami Subs Grill for $3.2 million from Nathan’s Famous in June 2007, according to SEC filings. Nathan’s purchased it in 1999 from founder Gus Boulis, who was gunned down in a gang-style slaying in 2001.
Chwatt is revamping the menu and replacing the chain’s Art Deco décor with warmer earth tones.
Chwatt’s company also has been developing a new concept dubbed OMG (Oh Miami Grill), a sports-themed bistro with a tapas-style menu, full bar and “plenty of big-screen TVs,” said Miami Subs VP Frank Baran.
The company wanted its first OMG to be at Fort Lauderdale-Hollywood International Airport, but an expansion and terminal renovations threw a monkey wrench into those plans.
“We had all of the necessary approvals, but were unable to get an agreement going forward,” Baran said. Where the airport OMG will go is uncertain.
Chwatt is in talks to become the signature restaurant at the new Miami Marlins ballpark, though no deal has been inked yet.
The OMG concept’s footprint is about 5,000 square feet, double that of the average Miami Subs. Plans are to grow both concepts to 500 franchised units within five years. Chwatt doesn’t plan any corporate-owned locations.
“I don’t like to compete with our franchisees,” he said. “We want to train them and show them how to operate.”
The franchise fee for both Miami Subs and OMG is $30,000. Total investment for Miami Subs is $300,000 to $600,000, depending on buildout costs. The company did not have a total investment for the OMGs.
Chwatt had no restaurant experience before purchasing Miami Subs. He has teamed with attorney Bernard Vogel and hedge fund manager Bruce Galloway, who formerly owned Arthur Treacher’s Fish and Chips. Chwatt is co-owner of Boca Raton-based financial services company Jericho State Capital.
“I have always managed and consulted to corporations,” Chwatt said during an interview at one of Miami Subs’ newly renovated restaurants on Commercial Boulevard and Powerline Road in Fort Lauderdale. “This was just another business, but it had food as its ingredient.”
The menu is being tweaked to include more healthy choices, including Grandma Robyn’s oatmeal pie (named after Chwatt’s wife) for breakfast. In January, the company will formally introduce a “heart healthy” menu.
“We bought [the company] with the idea of adding heart-healthy food,” Chwatt said.
Although “subs” will remain part of its name, the No. 1 seller is chicken wings, followed by cheese steaks. Baran said subs are just 5 percent of the sales.
A recent report by Technomic, a Chicago-based restaurant consulting firm, found that restaurant operators are rolling out healthier menus for consumers with health and dietary concerns.
Another Technomic report found steady growth in breakfast sales, but plenty of opportunity in an unsaturated market.
Technomic estimates breakfasts are 12 percent of the total restaurant industry, generating about $42 billion in annual sales.
“Breakfast is a very dynamic segment in which consumers are looking for healthier options and place a premium on convenience,” Technomic Executive VP Darren Tristano said.
Since its renovation, revenue at the Commercial Boulevard Miami Subs has more than doubled, which Chwatt attributes to new menu items and a nicer environment that includes Wi-Fi and big-screen TVs.
The average cost of a renovation is about $150,000. He said the company is helping franchisees find financing. Those who do not want to renovate will not have their franchises renewed, Chwatt said.
“Rebranding and reimaging is key to growth,” he said.