UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C.  20549

                                  FORM 10-Q
          (Mark  One)
          [  X  ]          QUARTERLY  REPORT  PURSUANT  TO SECTION 13 OR 15(D)
                              OF  THE  SECURITIES  EXCHANGE  ACT  OF  1934

               For  the  quarterly  period  ended     AUGUST  31,  1998

                                   OR
          [      ]    TRANSITION  REPORT PURSUANT TO SECTION 13 OR 15(D)
                       OF  THE  SECURITIES  EXCHANGE  ACT  OF  1934

          For  the  transition  period  from  to

          Commission  file  number                  0-19623

                            MIAMI SUBS CORPORATION
            (Exact name of registrant as specified in its charter)

     Florida                                                    65-0249329
(State  or  other  jurisdiction  of                        (I.R.S. Employer
 incorporation  or  organization)                         Identification  No.)

           6300 N.W. 31st Avenue, Fort Lauderdale, Florida  33309
                   (Address of principal executive offices)
                                  (Zip Code)

                               (954) 973-0000
             (Registrant's telephone number, including area code)

     Indicate  by  check mark whether the registrant (1) has filed all reports
required  to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934  during  the  preceding  12  months  (or for such shorter period that the
registrant  was  required  to  file such reports), and (2) has been subject to
such  filing  requirements  for  the  past  90  days.

                              Yes    X     No

     Indicate the number of shares outstanding of each of the issuer's classes
of  common  stock,  as  of  the  latest  practicable  date.


         Class                                               Outstanding at
                                                            October  6,  1998
Common  Stock,  $.01 par value                                  27,119,340










PART  I.    FINANCIAL  INFORMATION
ITEM  1.  FINANCIAL  STATEMENTS.
<TABLE>
<CAPTION>

                                     MIAMI SUBS CORPORATION
                                   CONSOLIDATED BALANCE SHEETS
                                           (UNAUDITED)


                                                                        August 31,     May 31,
ASSETS                                                                     1998          1998
---------------------------------------------------------------------  ------------  ------------
<S>                                                                    <C>           <C>

CURRENT ASSETS
Cash and cash equivalents (including unexpended marketing fund
   contributions of $1,356,000 and $970,000, respectively)             $ 4,058,000   $ 3,457,000 
Notes and accounts receivable - net                                      1,891,000     1,743,000 
Food and supplies inventories                                              184,000       179,000 
Other                                                                       67,000        77,000 
Total Current Assets                                                     6,200,000     5,456,000 

Notes receivable                                                         6,680,000     6,076,000 
Property and equipment - net                                            10,786,000    11,612,000 
Intangible assets - net                                                  6,617,000     6,718,000 
Other                                                                      443,000       464,000
                                                                       -----------   -----------
TOTAL                                                                  $30,726,000   $30,326,000 
                                                                       ===========   ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
---------------------------------------------------------------------                            
CURRENT LIABILITIES
Accounts payable and accrued liabilities                               $ 4,821,000   $ 4,276,000 
Current portion of notes payable and capitalized lease obligations         997,000     1,092,000 
                                                                       -----------   -----------
Total Current Liabilities                                                5,818,000     5,368,000 

Long-term portion of notes payable and capitalized lease obligations     5,387,000     5,613,000 
Deferred franchise fees and other deferred income                        1,527,000     1,577,000 
Accrued liabilities and other                                            1,645,000     1,735,000 

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY
Common stock, $.01 par value; authorized 50,000,000 shares                 283,000       283,000 
Additional paid-in capital                                              24,565,000    24,565,000 
Accumulated deficit                                                     (6,892,000)   (7,208,000)
                                                                        17,956,000    17,640,000 
Note receivable from sale of stock                                        (563,000)     (563,000)
Treasury Stock                                                          (1,044,000)   (1,044,000)
                                                                       ------------  ------------
Total Shareholders' Equity                                              16,349,000    16,033,000 
                                                                       ------------  ------------

TOTAL                                                                  $30,726,000   $30,326,000 
=====================================================================  ============  ============

See accompanying notes to consolidated financial statements.
</TABLE>




<TABLE>
<CAPTION>


                                         MIAMI SUBS CORPORATION
                                   CONSOLIDATED STATEMENTS OF INCOME
                                              (UNAUDITED)


                                                                      Three Months       Three Months
                                                                    Ended August 31,   Ended August 31,
REVENUES                                                                  1998               1997
------------------------------------------------------------------  -----------------  -----------------
<S>                                                                 <C>                <C>

Restaurant sales                                                    $       4,922,000  $       4,778,000
Revenues from franchised restaurants                                        1,198,000          1,119,000
Net gain from sales of restaurants                                             43,000             11,000
Interest income                                                               164,000            197,000
Other revenues - net                                                           55,000            113,000
                                                                    -----------------  -----------------
Total                                                                       6,382,000          6,218,000

EXPENSES
------------------------------------------------------------------                                      
Restaurant operating costs (including lease costs paid to Kavala,
  Inc. of $24,000 in 1998 and $41,000 in 1997)                              4,583,000          4,550,000
General, administrative and franchise costs                                   876,000            900,000
Depreciation and amortization                                                 363,000            368,000
Interest expense                                                              170,000            208,000
                                                                    -----------------  -----------------
Total                                                                       5,992,000          6,026,000

Income before provision for income taxes                                      390,000            192,000
Provision for income taxes                                                     74,000             67,000
                                                                    -----------------  -----------------

Net income                                                          $         316,000  $         125,000
                                                                   ==================  =================
Net income per share:
Basic                                                               $             .01  $             .00
                                                                    =================  =================
Diluted                                                             $             .01  $             .00
                                                                    =================  =================


Shares used in computing net income per share:
==================================================================                                      
Basic                                                                      27,119,000         27,119,000
==================================================================  =================  =================
Diluted                                                                    27,119,000         27,185,000
==================================================================  =================  =================

See accompanying notes to consolidated financial statements.
</TABLE>







<TABLE>
<CAPTION>


                                                 MIAMI SUBS CORPORATION
                                          CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                       (UNAUDITED)



                                                                                      Three Months        Three Months
                                                                                    Ended August 31,    Ended August 31,
                                                                                   ------------------  ------------------
OPERATING ACTIVITIES:                                                                     1998                1997
                                                                                   ------------------  ------------------
<S>                                                                                <C>                 <C>

Net income                                                                         $         316,000   $         125,000 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization                                                                253,000             259,000 
Amortization of intangible assets                                                            110,000             108,000 
Net gain and franchise fee from sales of restaurants                                         (68,000)            (11,000)
Changes in assets and liabilities:
Decrease (increase) in accounts receivable                                                    14,000            (194,000)
(Increase) decrease in food and supplies inventories                                          (5,000)             14,000 
Decrease in other current assets                                                              10,000               1,000 
Decrease (increase) in other assets                                                           12,000              (6,000)
Increase in accounts payable and accrued liabilities                                         545,000             153,000 
Increase (decrease) in deferred fees and accrued liabilities                                   6,000             (98,000)
                                                                                    ----------------   -----------------
Net Cash Provided By Operating Activities                                                  1,193,000             351,000 
                                                                                    ----------------   -----------------
INVESTMENT ACTIVITIES:
Purchase of property and equipment                                                          (462,000)            (73,000)
Proceeds from sales of restaurants                                                            80,000              10,000 
Payments received on notes receivable                                                        111,000             424,000
                                                                                     ---------------   -----------------
Cash (Used For) Provided By Investment Activities                                           (271,000)            361,000 
                                                                                     ---------------   -----------------
FINANCING ACTIVITIES:
Repayment of debt                                                                           (321,000)           (374,000)
                                                                                     ---------------   -----------------
Cash (Used For) Financing Activities                                                        (321,000)           (374,000)
                                                                                     ---------------   -----------------
INCREASE IN CASH                                                                             601,000             338,000 

CASH AT BEGINNING OF PERIOD                                                                3,457,000           2,940,000 
                                                                                    ----------------   -----------------
CASH AT END OF PERIOD                                                              $       4,058,000   $       3,278,000 
                                                                                   =================   =================
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest                                                             $         169,000   $         209,000 
=================================================================================  ==================  ==================
Loans to franchisees in connection with sales of restaurants                       $       1,015,000   $         190,000 
=================================================================================  ==================  ==================
Acquisition of restaurants in exchange for notes receivable                        $         168,000   $         432,000 
=================================================================================  ==================  ==================

See accompanying notes to consolidated financial statements.
</TABLE>










                            MIAMI SUBS CORPORATION
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 (UNAUDITED)

1.          BASIS  OF  PRESENTATION

In  the  opinion  of  management,  the  accompanying  unaudited  consolidated
financial  statements contain all adjustments, which are of a normal recurring
nature,  necessary for a fair presentation of the Company's financial position
and results of operations for the periods presented.  The financial statements
have been prepared by the Company pursuant to the rules and regulations of the
Securities  and Exchange Commission.  Accordingly, they do not include all the
information  and  footnotes  required  for  annual  financial statements.  The
financial  statements  included  herein should be read in conjunction with the
financial statements presented in the Company's Annual Report on Form 10-K for
the  year  ended  May  31,  1998.

Results  of  operations  reported  for  interim  periods  are  not necessarily
indicative  of  results  for  the  entire  fiscal  year.

2.          REVENUES  FROM  FRANCHISED  RESTAURANTS

     Revenues  from  franchised  restaurants  consist  of  the  following:
<TABLE>
<CAPTION>




                                          THREE MONTHS       THREE MONTHS
                                        ENDED AUGUST 31,   ENDED AUGUST 31,
                                        -----------------  -----------------
                                              1998               1997
                                        -----------------  -----------------
<S>                                     <C>                <C>

Royalties                               $       1,037,000  $         922,000
Franchise and development fees                    132,000            142,000
Sublease rental income (net) and other             29,000             55,000
                                        -----------------  -----------------
Total                                   $       1,198,000  $       1,119,000
                                        =================  =================


</TABLE>


3.                    NOTES  AND  ACCOUNTS  RECEIVABLE

          Notes  and  accounts  receivable  consist  of  the  following:
<TABLE>
<CAPTION>




                                                       August 31,     May 31,
                                                          1998          1998
                                                      ------------  ------------
<S>                                                   <C>           <C>

Notes receivable                                      $ 7,864,000   $ 7,112,000 
Royalties and other receivables due from franchisees      646,000       666,000 
Other                                                     208,000       229,000 
                                                      ------------  ------------
Total                                                   8,718,000     8,007,000 
Less allowance for doubtful accounts                     (147,000)     (188,000)
                                                      ------------  ------------
                                                        8,571,000     7,819,000 
Less notes receivable due after one year               (6,680,000)   (6,076,000)
                                                      ------------  ------------
Notes and accounts receivable-current portion         $ 1,891,000   $ 1,743,000 
====================================================  ============  ============
</TABLE>


Notes  receivable  at  August  31,  1998,  principally  result  from  sales of
restaurant  businesses  to  franchisees  and  are  generally guaranteed by the
purchaser  and  collateralized  by the restaurant businesses and assets sold. 
The notes are generally due in monthly installments of principal and interest,
with  interest  rates  ranging  principally  between  8%  and  12%.


4.          INCOME  TAXES

The  Company's  federal income tax returns for fiscal years 1991 through 1996,
inclusive, have been examined by the Internal Revenue Service, and the IRS has
issued reports for such years reflecting substantial adjustments to previously
filed tax returns.  The Company has appealed many of the proposed adjustments.
 If  the  Company is not successful in its appeal, the Company's net operating
loss  carryovers  would  be substantially absorbed by the proposed adjustments
and  significant amounts of additional taxes, interest, and penalties would be
due.    The  Company  believes  that  the  accruals  that  it  has provided in
connection  with  this  matter  are  adequate.


5.          PROPOSED  REVERSE  STOCK  SPLIT

The  Company's  common  stock is subject to delisting from the Nasdaq National
Market  since  it  is not in compliance with the minimum bid price requirement
pursuant  to  NASD  Marketplace  Rule  4450  (a)(5), which became effective in
February  1998.    In response to this action, in September 1998 the Company's
Board  of  Directors  unanimously  adopted a resolution to amend the Company's
Articles  of Incorporation to effect a one-for-four reverse stock split of the
Company's  common  stock,  pursuant  to which each four shares of common stock
would be converted into one share of common stock.  The reverse stock split is
subject  to  approval by the Company's shareholders.  On September 25, 1998, a
hearing  was  held before a Listing Qualifications Panel authorized by NASD in
which  the  Company  requested  an  extension  of  time  to  effectuate  the
reverse-stock-split  and  come  into  compliance  with  the  minimum bid price
requirement.  The delisting action has been stayed pending final determination
by  the  Listing  Qualifications  Panel  on  this  request.


ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION            
        AND  RESULTS  OF  OPERATIONS

INTRODUCTION

The  Company's  revenues  are derived principally from operating, franchising,
and  financing Miami Subs restaurants.  Franchise revenues consist principally
of initial franchise fees and area development fees, monthly royalty fees, and
net sublease rental income.  In the normal course of its business, the Company
also  derives  revenues  from  the  sale  of  restaurants  to franchisees, and
interest  income  from  financing  the  sale  of  restaurants  to franchisees.

Restaurant  operating  costs  include  food and paper costs, direct restaurant
labor  and  benefits,  marketing  fees  and  costs, and all other direct costs
associated  with  operating  the  restaurants.    General,  administrative and
franchise  costs  relate  both  to Company owned restaurants and the Company's
franchising  operations.

The Company's revenues and expenses are directly affected by the number, sales
volumes, and profitability of its Company operated restaurants.  Revenues, and
to a lesser extent expenses, are also affected by the number and sales volumes
of  franchised  restaurants.  Initial franchise fees and the net gain on sales
of  restaurants  are  directly affected by the number of restaurants opened by
franchisees  and  the  number  of  restaurants  sold to franchisees during the
period.

During  the  current  quarter,  the  Company finalized a co-branding licensing
agreement  with  Arthur Treacher's, Inc. ("Treacher's").  Under the agreement,
franchised  and  Company  owned  Miami  Subs  Grill  restaurants  may  become
franchisees of Treacher's and sell Treacher's products in the restaurants.  As
of  August  31,  1998,  ten  Miami Subs Grill restaurants have implemented the
co-branding program and were selling Treacher's products.  Since most of these
co-branding  additions  took  place  during  August 1998, the Company does not
believe  that it had a significant impact on its business or operations during
the  current  quarter.

The  Company's  ability to sustain and improve profitability will, among other
factors,  be  dependent  on  the continuing improvement of sales and operating
margins  in  existing Company and franchised restaurants, successful expansion
of  its franchise base, its ability to control future operating costs, and the
successful  operation of existing and new restaurants on a profitable basis by
franchisees.

The  Company's  fiscal year ends on May 31.  The results of operations for the
three  months  ended  August  31,  1998  are not necessarily indicative of the
results  that  may  be  expected  for  the  Company's  fiscal  year.

During  the  three  months  ended August 31, 1998, four franchised restaurants
opened,  and  three  franchised  restaurants closed.  In addition, the Company
sold four restaurants to franchisees, and acquired two restaurants from former
franchisees.    At  August 31, 1998, there were 192 restaurants in the system,
consisting of 16 Company operated restaurants and 176 franchised restaurants. 
At August 31, 1997, there were 191 restaurants in the system, consisting of 17
Company  operated  restaurants  and  174  franchised  restaurants.




COMPARISON  OF  THREE  MONTHS  ENDED  AUGUST  31,  1998  TO  AUGUST 31, 1997

Total  Revenues

Total  Company  revenues  increased  2.6% to approximately $6.4 million in the
first  quarter  of  the current year, as compared to $6.2 million in the first
quarter  of  the  prior  year.    The  increase  in  total  revenues  resulted
principally  from  an  increase  in  company-operated  restaurant  sales  and
franchise  revenues,  which  were  partially  offset by a decrease in interest
income  and  other  revenues.

Restaurant  Sales

The  Company's  total  restaurant  sales  increased 3.0% to approximately $4.9
million  in the current quarter, as compared to $4.8 million in the prior year
quarter.    The  increase  in  sales  resulted  principally  from  additional
restaurants  operated  by  the  Company  for  a  part  of  the current period.

Same-store-sales for all comparable Company operated restaurants (computed for
15  restaurants  operated by the Company since December 1996) declined by 0.2%
in  the  current  quarter.    However, for the Company's nine core restaurants
which  are  principally  located  in  Florida,  same-store-sales for the first
quarter  increased  by approximately 1.2%.  Same-store-sales for the Company's
restaurants  in  the  year  earlier quarter were down approximately 6.4%.  The
Company  attributes  the  improvement  in  same-store-sales principally to the
changes  which  were  implemented  during  the  prior  fiscal year relating to
pricing,  marketing,  and  operations.

At  August 31, 1998, Company operated restaurants were located in Florida (9);
Texas  (6),  and  New  York  (1).   Subsequent to August 31, 1998, the Company
transferred  the  operations  of  two of the Texas restaurants to a franchisee
pursuant  to a management agreement and the Company currently plans to sell or
transfer  to  franchisees  up  to five of the remaining restaurants.  However,
there  can  be  no  assurance that any such sales will be consummated at terms
acceptable  to  the  Company.

Revenues  From  Franchised  Restaurants

Revenues from franchised restaurants amounted to approximately $1.2 million in
the  current  quarter,  as compared to $1.1 million in the prior year quarter.

In  the  current year's first quarter, four franchised restaurants opened, the
Company sold/transferred four restaurants to franchisees, and three franchised
restaurants  closed.  At quarter end there were 176 franchised restaurants, as
compared  to  174  franchised restaurants one year ago.  Royalty income in the
current  quarter increased to $1,037,000, as compared to $922,000 in the prior
year  quarter, principally from the opening of new restaurants since the prior
year  quarter, and improved collections of delinquent royalty fees.  At August
31,  1998,  23% of franchised restaurants have been granted a temporary waiver
from paying royalty fees or were delinquent and not paying royalty fees to the
Company.

Same-store-sales  for  all  comparable  franchised  restaurants  (computed for
franchised  restaurants in operation since December 1996) continued the recent
trend  of  improvement,  declining by approximately 1.6% in the current year's
first  quarter.  Although negative, the decline for the quarter represents the
fourth  consecutive  quarterly  improvement  in same-store-sales (in the prior
year  quarter,  same-store-sales  at  franchised  restaurants  declined  by
approximately  10.4%,  but  improved  each  quarter  during the fiscal year). 
Same-store-sales  for  the  franchised  restaurants  located in Florida (which
represents  approximately  75%  of  the  restaurants  included  in  the
same-store-sales  calculation)  declined  by just .3% for the current quarter.
The  Company attributes the improvement in same-store-sales principally to the
changes  which  were  implemented  during  the  prior  fiscal year to pricing,
marketing,  and  operations.

The  Company  leases/subleases principally Miami Subs restaurant facilities to
franchisees  and  such  net  revenues  have  been  adversely affected from the
delinquency  and  non-payment of certain of these leases/subleases.  At August
31,  1998, ten restaurant facilities which are leased/subleased to franchisees
were  in  various  stages  of  delinquency.    During the current quarter, the
Company reacquired one restaurant from a franchisee as a result of the default
of  the  lease  and  note  payable  to the Company.  The restaurant was resold
during  the  quarter  to  another  franchisee  which  resulted in a gain being
realized  by  the  Company.

System-Wide  Sales

System-wide  sales,  which  includes  sales  from  all  Company  operated  and
franchised  restaurants,  increased  to  approximately  $38.2  million  in the
current  quarter, as compared to $37.8 million in the prior year quarter.  The
increase  in  system  wide  sales  principally  reflects higher sales from new
restaurants  which  opened since the prior year quarter.  Same-store-sales for
all comparable restaurants in the system declined by approximately 1.6% in the
current  quarter, representing the fourth consecutive quarterly improvement in
system  wide  same-store-sales.   Same-store-sales for the system in the prior
year  quarter  were  down  approximately  10.1%.    The Company attributes the
improvement  in  same-store-sales  principally  to  the  changes  which  were
implemented  during  the prior fiscal year relating to pricing, marketing, and
operations.

Net  Gain  From  Sales  of  Restaurants

As  a  part of the Company's strategy to focus future growth and operations in
franchising, the Company sold four restaurants to franchisees during the first
quarter  of the current year, as compared to two restaurants that were sold in
the  year  earlier quarter.  Gains on the sale of restaurants are dependent on
the  Company's  basis  in  and  the  overall performance of such units.  Gains
realized  are  recorded  as  income  when  the sales are consummated and other
conditions  are  met,  including  the  adequacy  of  the  down payment and the
completion  by  the  Company  of  its obligations under the contracts.   Total
deferred  gains on the sales of restaurants amounted to $749,000 at August 31,
1998.    Although  the Company intends to sell other existing Company operated
restaurants  in the future, there can be no assurance that any such sales will
be  consummated  on  terms  acceptable to the Company.  In addition, it is not
anticipated  that  significant  gains  will  be  realized  from  such  sales.

Interest  Income

In connection with its strategy of focusing growth in franchising, the Company
has  continued  to  sell restaurants to franchisees and has provided financing
for such sales.  During the current quarter, loans in the amount of $1,015,000
were  made  to  franchisees  in  connection  with the sale of four restaurants
during  the  quarter.    Total notes receivable amounted to approximately $7.9
million at August 31, 1998, as compared to $8.8 million at August 31, 1997. At
August  31,  1998,  nine  individual  notes receivable which are due from five
franchisees with outstanding balances totaling approximately $1.8 million (net
of  deferred  fees and credits) were delinquent in monthly payments due to the
Company.   As a result of these delinquencies and the lower average balance of
notes  receivable  outstanding during the quarter, interest income declined to
$164,000  in  the current quarter, as compared to $197,000 in the year earlier
quarter.

Other  Revenues  -  Net

Other  revenues  -  net  declined  from  $113,000 in the prior year quarter to
$55,000  in  the current quarter.  The decline resulted principally form costs
associated  with certain properties that were unleased during a portion of the
current quarter and non-recurring revenues realized in the prior year quarter.
 All  of  the  properties  have  been  subsequently  leased  to third parties.

Restaurant  Operating  Costs

Restaurant  operating  costs  in  Company  operated  restaurants  amounted  to
approximately  $4.6  million  or  93.1%  of  sales  in the current quarter, as
compared to 95.2% of sales in the prior year's first quarter.  The improvement
in  restaurant  operating  costs  as a percent of sales was principally due to
improved  supervision  and  controls  over food, paper, and labor costs in the
current  quarter.

General,  Administrative  and  Franchise  Costs

General,  administrative  and franchise costs amounted to $876,000 or 13.7% of
total  revenue  in  the  current  quarter, as compared to $900,000 or 14.5% of
total  revenue  in  the  prior  year  quarter.    Following a reduction in its
corporate  infrastructure  last year, the Company continues to maintain strict
costs controls in all areas of its business, and does not currently anticipate
any  significant  increase  to  current  operating  cost  levels.

Interest  Expense

Principally  as  a  result  of  the  repayment  of  outstanding  debt  from
approximately  $8.0  million  at August 31, 1997 to $6.4 million at August 31,
1998,  interest  expense  decreased  to  $170,000  in  the current quarter, as
compared  to  $208,000  in  the  prior  year  quarter.

Provision  for  Income  Taxes

The  Company's  federal income tax returns for fiscal years 1991 through 1996,
inclusive, have been examined by the Internal Revenue Service, and the IRS has
issued reports for such years reflecting substantial adjustments to previously
filed tax returns.  The Company has appealed many of the proposed adjustments.
 If  the  Company is not successful in its appeal, the Company's net operating
loss  carryovers  would  be substantially absorbed by the proposed adjustments
and  significant amounts of additional taxes, interest, and penalties would be
due.    The  Company  believes  that  the  accruals  that  it  has provided in
connection  with this matter are adequate.  The Company is providing currently
for  taxes  on  income  based on the expected effective tax rate for the year.

LIQUIDITY  AND  CAPITAL  RESOURCES

During  the first quarter of the current year, the Company's principal sources
of  cash  were  from  operating activities totaling $1,193,000, and  principal
payments  received  on  notes receivable of $111,000.  The Company's principal
uses  of  cash  in  the  current quarter were for scheduled debt repayments of
$321,000,  and  the  acquisition  of  a  franchised  restaurant  and  property
renovations  and  improvements totaling approximately $462,000.  Cash and cash
equivalents  at  August  31,  1998,  amounted  to  $4,058,000  (which includes
unexpended  marketing  fund  contributions  of  $1,356,000),  as  compared  to
$3,457,000  (including $970,000 in unexpended marketing fund contributions) at
May  31,  1998.    At  August 31, 1998, the Company's working capital position
improved to $382,000, as compared to $88,000 at May 31, 1998, and a deficit of
$1,085,000  one year ago.  The Company's working capital position has improved
principally as a result of improved operating results over the past year.  The
Company  is  able to operate with a low working capital position or deficiency
because  restaurant  operations are conducted primarily on a cash basis, rapid
turnover  and  frequent  deliveries allow a limited investment in inventories,
and accounts payable for food, beverages and supplies usually become due after
the  receipt  of  cash  from  the  related  sales.

In  addition  to  scheduled  debt  maturities/repayments  for the remainder of
fiscal year 1999 of approximately $786,000, the Company's capital requirements
for the balance of the current fiscal year relate primarily to planned capital
expenditures  to  certain  Company  operated  restaurants  in  connection with
co-branding  agreements  with  Arthur Treacher's, Inc. and BAB Holdings, Inc.,
other  necessary or required capital improvements to existing restaurants, and
certain  enhancements  to  corporate  and  restaurant  management  information
systems.    The  estimated  cost  of these planned capital expenditures is not
expected  to  exceed  approximately  $325,000.

In  September 1998, the Company's Board of Directors authorized the Company to
repurchase  from time to time up to five percent of the Company's common stock
in  open  market  transactions at current market prices.  Based on the current
market  price  of  the  common stock and the number of shares outstanding, the
Company  has  allocated  approximately  $425,000  for  this  purpose.

The  Company expects that competition in the quick-service restaurant industry
will  continue  to  be  intense  and will remain so in the foreseeable future,
resulting  in  continued  pressure  on  sales and operating profit, and slower
development of traditional restaurants by franchisees.  The Company, through a
co-branding  licensing  agreement  with  Arthur Treacher's, Inc., is currently
offering  Arthur  Treacher's  fish  products  in  a  limited  number  of  its
restaurants,  and will begin testing the sale of Big Apple Bagels, My Favorite
Muffins,  and Brewster's Coffee products in a Company restaurant in the second
quarter.    The Company also intends to pursue other co-branding opportunities
in  the  future.    Continued  emphasis  will  also  be  placed on franchising
non-traditional restaurants and certain of the Company's existing restaurants,
improving  the  performance  of Company and franchised restaurants, developing
new  products,  enhancing the effectiveness of marketing programs, and overall
improvement  and  possible  refinements  to  the  entire  system.

Seasonality

The  Company  does  not  expect  seasonality  to  affect  its  operations in a
materially adverse manner.  However, the Company's restaurant sales during its
first and fourth fiscal quarters have historically been higher that its second
and  third  quarters.

Forward-Looking  Statements

Certain  statements  contained  in  this report are forward-looking statements
which  are  subject  to  a number of known and unknown risks and uncertainties
that  could  cause  the  Company's  actual  results  and performance to differ
materially from those described or implied in the forward-looking statements. 
These  risks  and  uncertainties,  many  of which are not within the Company's
control,  include,  but  are not limited to economic, weather, legislative and
business  conditions;  the  availability  of  suitable  restaurant  sites  on
reasonable  rental  terms;  changes in consumer tastes; ability to continue to
attract  franchisees;  the ability to purchase primary food and paper products
at  reasonable  prices;  no  material  increases  in the minimum wage; and the
Company's  ability  to  attract competent restaurant and managerial personnel.


PART  II.    OTHER  INFORMATION

ITEM  L.    LEGAL  PROCEEDINGS

Reference  is  made  to  Part  I,  Item 3, Legal Proceedings, in the Company's
Annual  Report  on  Form 10-K  for  the  fiscal  year  ended  May  31,  1998
for a description of legal proceedings  involving  the  Company.   Since
May 31, 1998, there have been no material  developments  in  these  legal
proceedings.

ITEM  6.    EXHIBITS  AND  REPORTS  ON  FORM  8-K.

(a)        Exhibits.

          NONE

(b)        Reports  on  Form  8-K

     NONE

                                 SIGNATURES


Pursuant  to  the  requirements  of  the  Securities Exchange Act of 1934, the
Registrant  has  duly  caused  this  Report  to be signed on its behalf by the
undersigned  thereunto  duly  authorized.



                                                     MIAMI SUBS CORPORATION



Date:  October  6,  1998                       By:   /s/  Jerry  W.  Woda
                                                    JERRY W. WODA
                                                    Senior Vice President,
                                                    Chief Financial Officer,
                                                    and Principal Accounting
                                                    and Financial Officer