Pitbull takes ownership in The New Miami Subs Grill
Once an iconic South Florida chain, Miami Subs hopes a partnership with the Latin hip-hop star will help rebuild brand.
07/24/2012 5:00 AM
07/24/2012 8:27 PM
Latin hip-hop star Pitbull has always had an affinity for the chicken wings and the gyro platter at Miami Subs.
As the child of first generation Cuban immigrants growing up in Miami during the 1980s, Armando Christian Perez considered a trip to Miami Subs a big treat. Years later, the Miami Subs on Washington Avenue became almost a second office for Pitbull to write songs while waiting for his attorney. Pitbull even jokingly told the restaurant manager that one day he would own Miami Subs.
Little did he know how true that statement would be. Pitbull and Miami Subs on Tuesday night announced a deal that gives the Miami-based recording artist a “significant’’ equity position in The New Miami Subs Grill. The partnership, which was announced during an invitation-only cocktail party at the Shelborne South Beach, is aimed at helping lead the revival of the chain that was a South Florida icon during its heydays in the 1980s and early 1990s.
For Pitbull, who was introduced to Miami Subs Chief Executive Richard Chwatt through a mutual friend, the partnership seemed like a natural fit. Terms of the deal were not disclosed, but it does give Pitbull expansion rights to some parts of Latin America and the Caribbean. “Anyone who knows Miami, knows Miami Subs and they love the Miami Subs food,” Pitbull, 31, said in an interview. “What’s better than Mr. 305 to be involved with Miami Subs. It’s about two Miami brands being able to grow together. Where we can take it is limitless.”
During the ’90s, the neon-colored Miami Subs restaurants sat on street corners across South Florida and the brand had a strong regional following. At its peak, the chain had a couple hundred restaurants. But after founder Gus Boulis sold out in 1998 for about $14 million to Nathan’s Famous, the brand languished. (Boulis, who also founded SunCruz Casinos, was murdered in 2001.)
Miami Subs dropped from 170 stores in spring 2001 to 38 stores today, located mainly in South Florida, according to data from NPD Group. The current ownership group purchased the brand in 2007.
The Fort Lauderdale company is ready to start growing again. It recently announced a deal to open its first Latin American restaurants in Guyana. Future expansion possibilities include Honduras and Brazil.
Pitbull’s arrival comes as Chwatt’s team is starting to see early positive signs from its efforts to upgrade the brand. The chain has updated its name, and most of the restaurants have been refreshed with cushy banquettes and intimate tables, similar to a sit-down restaurant. What hasn’t changed is the variety and quality of the food, considered one of the forerunners of fast casual dining. The menu includes subs, chicken, Nathan’s hot dogs and chicken pita sandwiches.
The changes have helped to boost same-store sales, which are up 7 percent compared to last year, Chwatt said. Same store sales were also up 4 percent in 2011.
‘The next level’
“We’ve done this on our own without any advertising and marketing,” Chwatt said. “Pitbull is the guy to take us to the next level. The brand is going to be synonymous with him. We need to translate his energy to our stores. We think he can get that done.”
The Miami Subs deal is part of a broader effort by Pitbull to develop his brand. The burgeoning businessman has his own line of premium low-calorie vodka, Voli, and he is one of many celebrity partners in Sheets, a dissolvable energy strip made by a Boca Raton company. Pitbull’s earnings in 2011 hit $6 million, ranking him tied for Number 17 on Forbes’ Hip Hop Top 20 list.
Pitbull plans to play an active role at Miami Subs. He’ll serve as a member of the privately held Fort Lauderdale company’s board of directors and provide the company with input on aspects from marketing to menu development for a new Latin Fusion menu. He has already been the subject of a Win Lunch with Pitbull contest.
The next step could be a Pitbull video or song lyric featuring Miami Subs. You might find Pitbull’s music videos playing on the flatscreen televisions in the Miami Subs restaurant or some other image of the star. A new concept in the works for Miami Subs and Pitbull will be called OMG, Oh Miami Grill, and may feature Pitbull’s name.
But one thing Pitbull promises is that the integration of the two brands will be subtle. “To me it’s about sophisticated integration,” he said. “It’s not something we want to be in people’s face. I’m not going to be saying, “Go eat there and I’m going to give you a sale on a burger for $2.99.”
Alignments between celebrities and restaurant chains have become common. Some involve stars pitching the product, as in Burger King’s recent marketing campaign featuring actress Salma Hayek, Aerosmith rock star Steven Tyler and comedian Jay Leno. In others, such as former Miami Dolphins Coach Don Shula’s namesake restaurants, celebrities take a more active role.
Whatever the structure, celebrity affiliations pose risks; any image problems can transfer to the product. But a celebrity connection can also boost brand recognition — the expected results, say industry experts, in the Pitbull-Subs scenario.
“The brand is old and it competes in a highly competitive market,” said Dean Haskell, principal with restaurant consulting firm, National Retail Concept Partners. “This is a way for them to differentiate themselves in the marketplace and gain exposure to a new demographic. The more you can connect [Pitbull] physically to the brand, the more successful they will be. If they execute, it could have long-term success for the brand and the owners.”
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