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, 1997
                                                ---------------

                                       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 8, 1997
         -----                                 ------------------------------
Common  Stock,  $.01 par value                           28,244,340




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


                                               MIAMI SUBS CORPORATION
                                             CONSOLIDATED BALANCE SHEETS
                                                     (UNAUDITED)



                                                                                           August 31,     May 31,
ASSETS                                                                                        1997          1997
----------------------------------------------------------------------------------------  ------------  ------------
<S>                                                                                       <C>           <C>
CURRENT ASSETS
Cash and cash equivalents (including unexpended marketing fund contributions of. . . . .  $ 3,278,000   $ 2,940,000 
  $1,133,000 and $683,000, respectively)
Notes and accounts receivable (net of allowances for uncollectible accounts of $281,000.    1,808,000     2,000,000 
  and $289,000, respectively)
Food and supplies inventories. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      178,000       192,000 
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      190,000       191,000 
                                                                                          ------------  ------------
Total Current Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    5,454,000     5,323,000 

Notes receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    7,793,000     8,073,000 
Property and equipment - net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   11,502,000    11,500,000 
Intangible assets - net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    7,022,000     7,128,000 
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      463,000       457,000 
                                                                                          ------------  ------------

TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $32,234,000   $32,481,000
                                                                                          ============  ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . .  $ 4,890,000   $ 4,737,000 
Current portion of notes payable and capitalized lease obligations . . . . . . . . . . .    1,649,000     1,706,000 
                                                                                          ------------  ------------
Total Current Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    6,539,000     6,443,000 

Long-term portion of notes payable and capitalized lease obligations . . . . . . . . . .    5,971,000     6,288,000 
Deferred franchise fees and other deferred income. . . . . . . . . . . . . . . . . . . .    2,025,000     2,088,000 
Accrued liabilities and other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    2,066,000     2,154,000 

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY
Common stock, $.01 par value; authorized 50,000,000 shares; 28,244,340
   shares outstanding at August 31, 1997 . . . . . . . . . . . . . . . . . . . . . . . .      283,000       283,000 
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   24,565,000    24,565,000 
Accumulated deficit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   (7,608,000)   (7,733,000)
                                                                                          ------------  ------------
                                                                                           17,240,000    17,115,000 
Note receivable from sale of stock . . . . . . . . . . . . . . . . . . . . . . . . . . .     (563,000)     (563,000)
Treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   (1,044,000)   (1,044,000)
                                                                                          ------------  ------------
Total Shareholders' Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   15,633,000    15,508,000 
                                                                                          ------------  ------------

TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $32,234,000   $32,481,000 
                                                                                          ============  ============

</TABLE>




See  accompanying  notes  to  consolidated  financial  statements.


<TABLE>
<CAPTION>



                                               MIAMI SUBS CORPORATION
                                          CONSOLIDATED STATEMENTS OF INCOME
                                                     (UNAUDITED)






                                                                            Three Months Ended   Three Months Ended
REVENUES                                                                      August 31, 1997      August 31, 1996
--------------------------------------------------------------------------  -------------------  -------------------
<S>                                                                         <C>                  <C>

Restaurant sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $         4,778,000  $         9,053,000
Revenues from franchised restaurants . . . . . . . . . . . . . . . . . . .            1,119,000            1,132,000
Net gain from sales of restaurants . . . . . . . . . . . . . . . . . . . .               11,000              173,000
Interest income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              197,000              116,000
Other revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              113,000               61,000
                                                                            -------------------  -------------------
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            6,218,000           10,535,000
                                                                            -------------------  -------------------

EXPENSES

Restaurant operating costs (including lease costs paid to Kavala, Inc. of
  $41,000 in 1997 and 1996, respectively). . . . . . . . . . . . . . . . .            4,550,000            8,243,000
General, administrative and franchise costs. . . . . . . . . . . . . . . .              900,000            1,467,000
Depreciation and amortization. . . . . . . . . . . . . . . . . . . . . . .              368,000              515,000
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              208,000              243,000
                                                                            -------------------  -------------------
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            6,026,000           10,468,000
                                                                            -------------------  -------------------

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

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $           125,000  $            67,000
                                                                            ===================  ===================

Net income per common and common share equivalents . . . . . . . . . . . .                    -                    -
                                                                            ===================  ===================

Weighted average number of common and common share
  equivalents outstanding. . . . . . . . . . . . . . . . . . . . . . . . .           27,119,000           28,251,000
                                                                            ===================  ===================



</TABLE>









See  accompanying  notes  to  consolidated  financial  statements.

<TABLE>
<CAPTION>


                                           MIAMI SUBS CORPORATION
                                   CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                (UNAUDITED)




                                                                  Three Months Ended    Three Months Ended
OPERATING ACTIVITIES:                                              August 31, 1997       August 31, 1996
---------------------------------------------------------------  --------------------  --------------------
<S>                                                              <C>                   <C>
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . .  $           125,000   $            67,000 
Adjustments to reconcile net income to net cash provided by
  operating activities:
Depreciation and amortization . . . . . . . . . . . . . . . . .              259,000               396,000 
Amortization of intangible assets . . . . . . . . . . . . . . .              108,000               119,000 
Net gain from sales of restaurants. . . . . . . . . . . . . . .              (11,000)             (173,000)
Changes in assets and liabilities:
(Increase) in accounts receivable . . . . . . . . . . . . . . .             (194,000)             (380,000)
Decrease in food and supplies inventories . . . . . . . . . . .               14,000                52,000 
Decrease in other current assets. . . . . . . . . . . . . . . .                1,000                37,000 
(Increase) decrease in other assets . . . . . . . . . . . . . .               (6,000)               20,000 
Increase (decrease) in accounts payable and accrued liabilities              153,000              (435,000)
(Decrease) in deferred fees and accrued liabilities . . . . . .              (98,000)             (291,000)
                                                                 --------------------  --------------------
Net Cash Provided By (Used For) Operating Activities. . . . . .              351,000              (588,000)
                                                                 --------------------  --------------------

INVESTMENT ACTIVITIES:
Purchase of property and equipment. . . . . . . . . . . . . . .              (73,000)             (289,000)
Proceeds from sales of restaurants. . . . . . . . . . . . . . .               10,000               250,000 
Payments received on notes receivable . . . . . . . . . . . . .              424,000                99,000 
                                                                 --------------------  --------------------
Cash Provided By Investment Activities. . . . . . . . . . . . .              361,000                60,000 
                                                                 --------------------  --------------------

FINANCING ACTIVITIES:
Repayment of debt . . . . . . . . . . . . . . . . . . . . . . .             (374,000)             (573,000)
                                                                 --------------------  --------------------
Cash (Used For) Financing Activities. . . . . . . . . . . . . .             (374,000)             (573,000)
                                                                 --------------------  --------------------

INCREASE (DECREASE) IN CASH . . . . . . . . . . . . . . . . . .              338,000            (1,101,000)

CASH AT BEGINNING OF PERIOD . . . . . . . . . . . . . . . . . .            2,940,000             3,103,000 
                                                                 --------------------  --------------------

CASH AT END OF PERIOD . . . . . . . . . . . . . . . . . . . . .  $         3,278,000   $         2,002,000 
                                                                 ====================  ====================

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest. . . . . . . . . . . . . . . . . . . . .  $           209,000   $           242,000 
                                                                 ====================  ====================
Loans to franchisees in connection with sales of restaurants. .  $           190,000   $         1,010,000 
                                                                 ====================  ====================
Acquisition of restaurants in exchange for notes receivable . .  $           432,000 
                                                                 ====================  ====================

</TABLE>




See  accompanying  notes  to  consolidated  financial  statements.


                            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,  1997.

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


2.          REVENUES  FROM  FRANCHISED  RESTAURANTS

<TABLE>
<CAPTION>

     Revenues  from  franchised  restaurants  consist  of  the  following:


                                        Three Months Ended   Three Months Ended
                                          August 31, 1997      August 31, 1996
                                        -------------------  -------------------
<S>                                     <C>                  <C>
Royalties. . . . . . . . . . . . . . .  $           922,000  $           985,000
Franchise and development fees . . . .              142,000              116,000
Sublease rental income (net) and other               55,000               31,000
                                        -------------------  -------------------
Total. . . . . . . . . . . . . . . . .  $         1,119,000  $         1,132,000
                                        ===================  ===================



</TABLE>



     3.                    NOTES  AND  ACCOUNTS  RECEIVABLE

<TABLE>
<CAPTION>

          Notes  and  accounts  receivable  consist  of  the  following:


                                                       Three Months Ended    Three Months Ended
                                                        August 31, 1997         May 31, 1997
                                                      --------------------  --------------------
<S>                                                   <C>                   <C>
Notes receivable . . . . . . . . . . . . . . . . . .  $         8,771,000   $         9,437,000 
Royalties and other receivables due from franchisees            1,029,000               867,000 
Other. . . . . . . . . . . . . . . . . . . . . . . .               82,000                58,000 
                                                      --------------------  --------------------
Total. . . . . . . . . . . . . . . . . . . . . . . .            9,882,000            10,362,000 
Less allowance for doubtful accounts . . . . . . . .             (281,000)             (289,000)
                                                      --------------------  --------------------
                                                                9,601,000            10,073,000 
Less notes receivable due after one year . . . . . .           (7,793,000)           (8,073,000)
                                                      --------------------  --------------------
Notes and accounts receivable-current portion. . . .  $         1,808,000   $         2,000,000 
====================================================  ====================  ====================



<FN>

Notes  receivable  at August 31, 1997, 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%.

</TABLE>



     4.          INCOME  TAXES

The  Company's  federal income tax returns for fiscal years 1991 through 1995,
inclusive,  have  been  examined  by  the  Internal  Revenue  Service  and  an
examination  of  fiscal  year 1996 is in process.  The IRS has issued a report
for  the  years 1991 through 1995 reflecting substantial adjustments which the
Company  and  its  outside  counsel  are  currently  reviewing.   Based on the
preliminary  review  of the report, a substantial portion of the Company's net
operating  loss  carryovers  may  be  absorbed  by  the  proposed adjustments,
however,  the  Company  is  unable  at  this  time  to  determine the ultimate
potential  impact  of  the  proposed  adjustments on the carryovers and on its
overall  tax liability.  The Company, through its counsel, will appeal many of
the  proposed  adjustments.


5.          STOCK  OPTIONS  AND  WARRANTS

At  May  31,  1997,  there  were 4,416,700 stock options outstanding under the
Company's  stock  option plan, of which 2,362,500 of such options subsequently
expired.    There  are currently 2,638,200 options outstanding under the plan.
As  a  result  of  a  repricing of certain options to current market value and
grants  of 584,000 new options during June 1997, 2,055,500 of such options are
exercisable  at  prices  between  $  .59 and $ .75 per share (average exercise
price  of  $  .747 per share), and the remaining options outstanding under the
plan  are  exercisable  at  prices  between $2.00 and $3.00 per share (average
exercise  price of $2.40 per share).  In addition to options outstanding under
the  plan, there are 509,600 additional warrants and options outstanding which
are  exercisable at prices between $2.00 and $6.00 per share (average exercise
price  $2.91  per  share).



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.

In order to supplement expansion of traditional free-standing restaurants, the
Company  has  continued  to  focus  growth  in  franchising  non-traditional
restaurants.    Such  restaurants  are  typically  smaller  and less costly to
develop  then  the  traditional  free-standing restaurants, and sales at these
non-traditional  restaurants  are  typically  less  than  those of traditional
restaurants.    During  the  three  months  ended  August  31,  1997,  six new
non-traditional  restaurants  were  opened  by  franchisees, and at August 31,
1997,  there  were  27  non-traditional  restaurants  in  the  system.

The  Company's  ability to achieve and sustain profitability will, among other
factors,  be  dependent  on  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.

The  Company's  fiscal year ends on May 31.  The results of operations for the
three  months  ended  August  31,  1997  are not necessarily indicative of the
results  that  may  be  expected  for  the  Company's  fiscal  year.

During  the  three  months ended August 31, 1997, seven franchised restaurants
opened  (of  which six were non-traditional restaurants), and three franchised
restaurants  closed.    In  addition,  the  Company  sold/transferred  two
Company-operated  restaurants  to  franchisees, and reacquired two restaurants
from  former  franchisees in exchange for notes receivable due to the Company.
At August 31, 1997, there were 191 restaurants in the system, consisting of 17
Company  operated  restaurants  and 174 franchised restaurants.  At August 31,
1996,  there  were  178  restaurants  in  the system, consisting of 32 Company
operated  restaurants  and  146  franchised  restaurants.

COMPARISON  OF  THREE  MONTHS  ENDED  AUGUST  31,  1997  TO  AUGUST  31,  1996

Total  Revenues
---------------

Principally  as  a  result  of  the  planned  sale  of  Company restaurants to
franchisees  since the first quarter of last year and a resulting reduction in
the  number  of  Company operated restaurants, total Company revenues declined
41%  to  $6.2 million in the first quarter of the current year, as compared to
$10.5  million  in  the  first  quarter  of  the  prior  year.

Restaurant  Sales
-----------------

The  Company's  total  restaurant  sales  decreased  approximately 47% to $4.8
million  in the current quarter, as compared to $9.1 million in the prior year
quarter.   The decrease in sales resulted principally from the sale of Company
operated  restaurants  to  franchisees  since  August  1996,  resulting  in  a
reduction  in the number of Company operated restaurants from 32 at August 31,
1996,  to  17  at  August  31,  1997.

"Same-store-sales"  in  Company  operated  restaurants  (which is computed for
restaurants  open  since  December  1995  and  operated by the Company for the
current and prior year quarters) declined by approximately 6.4% in the current
quarter.  To address the decline in same-store-sales, average unit volumes and
lower  guest counts that the Company's restaurants have been experiencing, and
in response to aggressive advertising and lower pricing of the major fast food
chains,  in  March  1997  the Company made a strategic change in its marketing
strategy,  and  revised its pricing structure and menu.  At the same time, the
Company ceased the extensive use of couponing in its restaurants.  The Company
also  began  a  test  of certain operational and marketing changes to increase
guest  counts and become more competitive on price points with other fast-food
operators,  and  began a major system-wide program to bring all restaurants up
to  current  standards and image.  During this test period and throughout most
of  the  first  quarter  of  the  current  year,  system-wide  advertising and
marketing  activities  were  essentially  placed  on  hold.    The  Company's
initiatives  to  date  have  included  an  integrated program to address image
improvements  to  restaurants, crew and manager training and retraining, sales
and  customer service incentives, an introduction of new lower-priced products
and  lower  prices on certain existing products, and new local-store marketing
programs.    Following  the test period and introduction of the changes to the
system,  the Company recommenced radio and print advertising at the end of the
current  quarter.    There can be no assurance that these recent efforts  will
ultimately  be  successful  in  reversing  the  same-store-sales  trends  or
increasing  unit  volumes.

At August 31, 1997, Company operated restaurants were located in Florida (10);
Texas  (6),  and  New  York  (1).    The  Company  currently  plans to sell to
franchisees  up  to  nine  of  these  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 $1,119,000 in the current
quarter,  as  compared  to  $1,132,000  in  the  prior  year  quarter.

In  the  current year's first quarter, seven franchised restaurants opened (of
which  6  were  non-traditional restaurants), the Company sold/transferred two
restaurants  to franchisees, and three franchised restaurants closed.  Royalty
income in the current quarter amounted to $922,000, as compared to $985,000 in
the  prior  year  quarter.  Although the number of franchised restaurants have
increased,  a  decrease  of  approximately  10.4%  in  "same-store-sales"  at
franchised  restaurants  (which  is  computed  for franchised restaurants open
since  December 1995), lower average unit sales at franchised restaurants, and
the non-payment and non-accrual of royalty fees due from franchisees adversely
affected  royalty  income  in the current year's first quarter.  At August 31,
1997,  approximately  15%  of  franchised  units have been granted a temporary
waiver  from paying royalty fees, and royalty fees were not paid or accrued on
22%  of  certain  other  franchised units due to delinquency in the payment of
royalties  to  the  Company.

As  discussed  in  "Restaurant Sales" above, by the end of the current quarter
the  Company  had  initiated  throughout  the system significant and strategic
changes  to  its  marketing  strategy,  pricing  structure,  and  menu,  and
recommenced  radio  and print advertising at the end of the current quarter in
order  to  improve  guest  counts and unit sales in the restaurants and become
more competitive on price points with other fast-food operators.  There can be
no assurance that these initiatives will ultimately be successful in reversing
the  same store sales trends, increasing unit volumes, or improving restaurant
profitability.

System-Wide  Sales
------------------

System-wide  sales,  which includes sales from Company operated and franchised
restaurants,  amounted  to approximately $37.8 million in the current quarter,
as  compared  to  $40.0  million  in  the prior year quarter.  The decrease in
system-wide  sale  reflects  a  decline in "same store sales" for both Company
operated  and  franchised  units (which is computed for restaurants open since
December  1995)  of  approximately 10.1% in the current quarter, the increased
number of non-traditional restaurants in the system which typically have lower
sales  volumes  than  traditional  restaurants,  and  continuation  of intense
industry-wide  competition  and  aggressive price discounting and marketing by
large  national  chains.

As  discussed  in  "Restaurant Sales" above, by the end of the current quarter
the  Company  had  initiated  throughout  the system significant and strategic
changes  to  its  marketing  strategy,  pricing  structure,  and  menu,  and
recommenced  radio and print advertising in order to improve unit sales in the
restaurants  and  become more competitive on price points with other fast-food
operators.    There can be no assurance that these initiatives will ultimately
be  successful  in  reversing  the  same  store  sales trends, increasing unit
volumes,  or  improving  restaurant  profitability.

Net  Gain  From  Sales  of  Restaurants
---------------------------------------

As  a  part  of  the  Company's  current  strategy  to focus future growth and
operations  in  franchising  restaurants,  the  Company  sold/transferred  two
restaurants to franchisees during the first quarter of the current year.  Four
Company  restaurants  were  sold  to  franchisees 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.    Losses  on  the sale of restaurants are
recognized  at  the  time  of  sale.    Total  deferred  gains on the sales of
restaurants  amounted  to  $827,000  at August 31, 1997.  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  or  that  gains  will  be  realized.


Interest  Income
----------------

In connection with its strategy of focusing growth in franchising restaurants,
the  Company  has  sold  restaurants to franchisees and provided financing for
such  sales.  Principally as a result of the increase in notes receivable from
such  sales,  interest income increased to $197,000 in the current quarter, as
compared to $116,000 in the year earlier quarter.  The Company currently plans
to  sell  additional  restaurants to franchisees, and it is expected that such
sales,  when  and  if  consummated,  will  also  be  financed  by the Company.

Restaurant  Operating  Costs
----------------------------

Restaurant  operating  costs  in Company operated restaurants amounted to $4.6
million  or 95.2% of sales in the current quarter, as compared to $8.2 million
or  91.1%  of  sales in last year's first quarter.  The increase in restaurant
operating  costs  as a percent of sales in the current quarter reflects higher
food  and  paper costs as a result of the lower prices currently being offered
in  the  restaurants, higher labor costs as the Company has increased staffing
in  order  to  improve customer service, and also reflects the impact of lower
average  unit  volumes,  especially  in  certain units that are held for sale.

General,  Administrative  and  Franchise  Costs
-----------------------------------------------

General,  administrative  and franchise costs amounted to $900,000 or 14.5% of
total  revenue  in  the  current  quarter,  as  compared to approximately $1.5
million  or  13.9%  of  total  revenue  in  the  prior  year  quarter.

During  the  second  half  of  the  prior year, the Company eliminated certain
administrative  and  support  positions,  implemented  a  reduction  in
office/administration  facilities,  and took other cost control measures which
resulted  in  a  39%  decrease  in  such costs as compared to the year earlier
level.    The  Company is maintaining strict cost controls in all areas of its
business,  and  does not currently expect any significant increases to current
levels.

Depreciation  and  Amortization
-------------------------------

Depreciation  and  amortization  decreased  in  the current quarter due to the
reduction  in the number of restaurants operated by the Company in the current
quarter  as  compared  to  the  year  earlier period.  At August 31, 1997, the
Company  operated  17  restaurants as compared to 32 restaurants at August 31,
1996.

Interest  Expense
-----------------

Interest  expense decreased to $208,000 in the current quarter, as compared to
$243,000  in the prior year quarter, principally reflecting lower average debt
levels  outstanding  in  the  current  quarter.

Provision  for  Income  Taxes
-----------------------------

The  Company's  federal income tax returns for fiscal years 1991 through 1995,
inclusive,  have  been  examined  by  the  Internal  Revenue  Service  and  an
examination  of  fiscal  year 1996 is in process.  The IRS has issued a report
for  the  years 1991 through 1995 reflecting substantial adjustments which the
Company  and  its  outside  counsel  are  currently  reviewing.   Based on the
preliminary  review  of the report, a substantial portion of the Company's net
operating  loss  carryovers  may  be  absorbed  by  the  proposed adjustments.
Accordingly,  in  the  quarter ended August 31, 1997, the Company provided for
estimated  income  taxes  on  the  current  operating  results.

LIQUIDITY  AND  CAPITAL  RESOURCES
----------------------------------

During  the first quarter of the current year, the Company's principal sources
of cash were from principal payments received on notes receivable of $424,000,
and from operating activities totaling $351,000.  The Company's principal uses
of  cash in the current quarter were for scheduled debt repayments and payoffs
of  $374,000,  and property renovations and improvements of $73,000.  Cash and
cash  equivalents  at  August 31, 1997, amounted to $3,278,000 (which includes
unexpended  marketing  fund  contributions  of  $1,133,000),  as  compared  to
$2,940,000  (including $683,000 in unexpended marketing fund contributions) at
May  31, 1997, and $2,002,000 (including $565,000 in unexpended marketing fund
contributions)  at August 31, 1996.  At August 31, 1997, the Company's working
capital  deficiency was $1,085,000, as compared to $1,120,000 at May 31, 1997,
and  $1,808,000  one  year  ago.   The Company has been able to operate with a
working  capital  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.

Due  to  the  high  cost  of  suitable  real  estate  and  sites,  the intense
competition  in  the  industry,  and  the  Company's  strategy  of focusing on
franchising,  the  Company  does  not  currently  plan  to develop new Company
restaurants  in  fiscal year 1998.  Accordingly, in addition to scheduled debt
maturities/repayments  for  the remainder of fiscal year 1998 of approximately
$1,325,000,  the Company's capital requirements for the balance of the current
fiscal  year relate primarily to necessary or required capital improvements to
existing  restaurants  and  certain  enhancements  to corporate and restaurant
management  information  systems.    Such capital expenditures will be made as
required, and will take into consideration the Company's current liquidity and
working  capital  positions,  as  well  as  anticipated future cash flows from
operations  and  other  sources.

In  connection  with  its  strategy  of  focusing future growth in franchising
restaurants,  the  Company  has  sold  restaurants to franchisees and provided
financing for such sales.  Notes receivable, which amounted to $8.8 million at
August  31,  1997  (of  which  approximately $978,000 is due within one year),
principally  consist  of  36  notes  arising  from  the sale of restaurants to
franchisees.    Eight  of  these notes were delinquent at August 31, 1997, and
during the current quarter, the Company reacquired two restaurants from former
franchisees  in  exchange for notes receivable.  In certain cases, the Company
has  instituted proceedings for the collection of such delinquent notes, which
may result in the reacquisition of the restaurant by the Company.  The Company
currently  plans  to  sell  additional  restaurants  to franchisees, and it is
expected  that  such  sales, when and if consummated, will also be financed by
the  Company.

As  a  result  of  fewer  restaurants operated by the Company and a decline in
same-store-sales,  the Company's total revenues declined by 41% in the current
quarter  as compared to the year earlier quarter.  The Company currently plans
to  sell  to  franchisees  up  to  nine of the restaurants that it operated at
August  31,  1997.   If the Company consummates the sale of additional planned
restaurants,  the  Company's  future  total  revenues  would  decline.

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 restaurant operating profit.
Accordingly,  continued emphasis will 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.  The Company's ability to achieve
and  sustain  profitability  and  improve cash flow and liquidity, will, among
other  factors,  be dependent on 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.

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.




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, 1997 for a description of certain legal
proceedings  involving  the  Company.   Since May 31, 1997, 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 8, 1997                         By:/s/  Jerry W. Woda
       ---------------                            --------------------
                                                  JERRY W. WODA
                                                  Senior Vice President,
                                                  Chief Financial Officer, and
                                                  Principal Accounting Officer