WESTBURY N.Y. Hotdog heavyweight Nathan's Famous Inc. has sold its Miami Subs Corp. subsidiary to an investment company led by Bruce Galloway and Gary Herman for $3.3 million.
The buyer, Miami Subs Capital Partner 1 Inc., tendered $850,000 in cash and a secured promissory note for $2.4 million, payable over four years. Miami Subs franchises 59 unit broad-menu quick-service restaurants.
Nathan's purchased the brand in October 1999 in an exchange of stock valued at $14 million and the assumption of about $5 million of existing debt. At the time of the acquisition, the Fort Lauderdale, Fla.-based Miami Subs concept had about 175 outlets, 165 of which were franchised. Most of the existing Miami Subs units today are located in Southern Florida.
While Nathan's Famous originally had attempted to reinvigorate the Miami Subs brand, the chain was never able to rebound to its 1980s performance levels. Nathan's Famous president and chief operating officer Wayne Norbitz, said Nathan's has focused on its core hotdog concept. The company also owns the Kenny Rogers Roasters and Arthur Treacher's brands.
"We felt that Miami Subs was of no real importance to us compared to the Nathan's Famous brand," he said. "Our focus is on Nathan's." He added that Nathan's Famous has generated 15 consecutive quarters of profit increases.