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The once high-flying chain noted for its colorful wall murals and extensive fast-casual menu had attempted an expensive foray into the investment markets in the early 1990s. Opening a restaurant just blocks from the NYSE and AMEX, across from the World Trade Center, the franchisor paid a reputed $20K per month in rent at a time when competitors would not consider a rent over $10K. A second outlet then opened in the trendy West Village, at the time a favorite dining haunt of investment fund managers.
But the company was plagued by the micromanagement of founder Gus Boulis.
A well-known Florida analyst from a Big Board firm refused to follow the stock because he claimed that Boulis ran the company “like a fiefdom” and therefore it was not possible to analyze the stock based on any rational metrics. Retail stockbrokers whose clients’ holdings stagnated despite a sizzling story and promises of franchising riches took to calling the company a “thiefdom” in a riff on the analyst’s quip.
While speeding down a Miami highway in a luxury sports car, the larger-than-life Boulis was gunned down in a hail of bullets and allegations of money laundering and mob involvement, further casting a pall over the brand in the minds of portfolio managers.
Ultimately Miami Subs abandoned attempting to woo money managers and left Manhattan.
Now the company has hired a former Papa John’s executive and announced it will once again move into the lucrative New York market. It is unlikely that the franchisor will see the likes of such a flamboyant leader again, but franchisees may once again take the company seriously as a franchisor.
Miami Subs Snags Former Papa John’s President, June 10, 2009