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,  1996

                                   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 September  30,  1996
 Common  Stock,  $.01 par value                     27,738,840


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

                                               MIAMI SUBS CORPORATION
                                            CONSOLIDATED BALANCE SHEETS
                                                    (UNAUDITED)



                                                                                           AUGUST 31,     MAY 31,
ASSETS                                                                                        1996          1996
----------------------------------------------------------------------------------------  ------------  ------------
<S>                                                                                       <C>           <C>

CURRENT ASSETS
Cash and cash equivalents (including unexpended marketing fund contributions of           $ 2,002,000   $ 3,103,000 
   $565,000 and $525,000 respectively)
Notes and accounts receivable (net of allowances for uncollectible accounts of $390,000     2,578,000     2,250,000 
   at August 31, 1996 and May 31, 1996)
Food and supplies inventories                                                                 329,000       381,000 
Other                                                                                         295,000       332,000 
                                                                                          ------------  ------------
Total Current Assets                                                                        5,204,000     6,066,000 

Notes receivable                                                                            4,742,000     3,778,000 
Property and equipment - net                                                               16,892,000    17,955,000 
Intangible assets - net                                                                     7,899,000     8,004,000 
Other                                                                                         538,000       558,000 
                                                                                          ------------  ------------
TOTAL                                                                                     $35,275,000   $36,361,000
                                                                                          ============  ============
LIABILITIES AND SHAREHOLDERS' EQUITY
----------------------------------------------------------------------------------------                            
CURRENT LIABILITIES
Accounts payable and accrued liabilities                                                  $ 5,776,000   $ 6,106,000 
Current portion of notes payable and capitalized lease obligations                          1,236,000     1,539,000 
                                                                                          ------------  ------------
Total Current Liabilities                                                                   7,012,000     7,645,000 

Long-term portion of notes payable and capitalized lease obligations                        7,685,000     7,955,000 
Deferred franchise fees and other deferred income                                           1,581,000     1,712,000 
Accrued liabilities and other                                                               1,987,000     2,106,000 

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY
Series A Convertible Preferred Stock, $.01 par value,
   8,000,000 shares authorized; 505,500 shares outstanding at
   August 31, 1996, with aggregated liquidation preference
   of $1,011,000                                                                                5,000        10,000 
Common stock, $.01 par value; authorized 50,000,000 shares; 27,738,840
   shares outstanding at August 31, 1996                                                      278,000       273,000 
Additional paid-in capital                                                                 24,565,000    24,565,000 
Accumulated deficit                                                                        (7,275,000)   (7,342,000)
                                                                                          ------------  ------------
                                                                                           17,573,000    17,506,000 
Less note receivable from sale of stock                                                      (563,000)     (563,000)
                                                                                          ------------  ------------
Total Shareholders' Equity                                                                 17,010,000    16,943,000 
                                                                                          ------------  ------------
TOTAL                                                                                     $35,275,000   $36,361,000 
                                                                                          ============  ============

</TABLE>


See  accompanying  notes  to  consolidated  financial  statements.

<TABLE>
<CAPTION>

                                           MIAMI SUBS CORPORATION
                                     CONSOLIDATED STATEMENTS OF INCOME
                                                (UNAUDITED)



                                                                            THREE MONTHS ENDED
                                                                            -------------------
                                                                                AUGUST 31,       AUGUST 31,
REVENUES                                                                           1996             1995
--------------------------------------------------------------------------  -------------------  -----------
<S>                                                                         <C>                  <C>

Restaurant sales                                                            $         9,053,000  $ 7,951,000
Revenues from franchised restaurants                                                  1,132,000    1,190,000
Net gain from sales of restaurants                                                      173,000       84,000
Interest income                                                                         116,000      140,000
Other revenues                                                                           61,000       54,000
                                                                            -------------------  -----------
Total                                                                                10,535,000    9,419,000
                                                                            -------------------  -----------

EXPENSES
--------------------------------------------------------------------------                                  
Restaurant operating costs (including lease costs paid to Kavala, Inc. of
   $41,000 and $54,000, respectively)                                                 8,243,000    7,044,000
General, administrative and franchise costs                                           1,467,000    1,560,000
Depreciation and amortization                                                           515,000      467,000
Interest expense - net                                                                  243,000      190,000
                                                                            -------------------  -----------
Total                                                                                10,468,000    9,261,000
                                                                            -------------------  -----------

Net income                                                                  $            67,000  $   158,000
                                                                            ===================  ===========

Net income per common and common share equivalents                                            -  $       .01
                                                                            ===================  ===========

Weighted average number of common and common share
   equivalents outstanding                                                           28,251,000   26,920,000
                                                                            ===================  ===========



</TABLE>







See  accompanying  notes  to  consolidated  financial  statements.

<TABLE>
<CAPTION>


                                         MIAMI SUBS CORPORATION
                                  CONSOLIDATED STATEMENTS OF CASH FLOWS
                                               (UNAUDITED)





                                                                        THREE MONTHS ENDED
                                                                            AUGUST 31,
                                                                       --------------------        
OPERATING ACTIVITIES:                                                          1996              1995
                                                                       --------------------  ------------
<S>                                                                    <C>                   <C>

Net income                                                             $            67,000   $   158,000 
Adjustments to reconcile net income to net cash provided by (used in)
   operating activities:
Depreciation and amortization                                                      396,000       341,000 
Amortization of intangible assets                                                  119,000       126,000 
Net gain from sales of restaurants                                                (173,000)      (84,000)
Changes in assets and liabilities:
(Increase) in accounts receivable                                                 (380,000)     (150,000)
Decrease in food and supplies inventories                                           52,000         5,000 
Decrease (increase) in other current assets                                         37,000       (68,000)
Decrease in other assets                                                            20,000        23,000 
(Decrease) in accounts payable and accrued liabilities                            (435,000)     (383,000)
(Decrease) in deferred fees and other deferred income                             (291,000)     (244,000)
                                                                       --------------------  ------------
Net Cash (Used For) Operating Activities                                          (588,000)     (276,000)
                                                                       --------------------  ------------

INVESTMENT ACTIVITIES:
Purchase of property and equipment                                                (289,000)     (797,000)
Proceeds from sales of restaurants                                                 250,000       105,000 
Loans to franchisees and other                                                           -       (29,000)
Payments received on notes receivable                                               99,000       257,000 
                                                                       --------------------  ------------
Cash Provided By (Used For) Investment Activities                                   60,000      (464,000)
                                                                       --------------------  ------------

FINANCING ACTIVITIES:
Repayment of debt                                                                 (573,000)     (421,000)
                                                                       --------------------  ------------
Cash (Used For) Financing Activities                                              (573,000)     (421,000)
                                                                       --------------------  ------------

(DECREASE) IN CASH                                                              (1,101,000)   (1,161,000)

CASH AT BEGINNING OF PERIOD                                                      3,103,000     3,145,000 
                                                                       --------------------  ------------

CASH AT END OF PERIOD                                                  $         2,002,000   $ 1,984,000 
                                                                       ====================  ============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest                                                 $           242,000   $   190,000 
                                                                       ====================  ============
Loans to franchisees in connection with sales of restaurants           $         1,010,000   $   571,000 
                                                                       ====================  ============

</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,  1996.

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

     2.          ADOPTION  OF  NEW  ACCOUNTING  STANDARD

In the first quarter of the current fiscal year, the Company adopted Statement
of  Financial  Accounting  Standards  (SFAS)  No.  121,  "Accounting  For  the
Impairment  of Long-Lived Assets and For Long-Lived Assets to be Disposed Of."
SFAS  No. 121 in general requires that such impaired assets be written down to
a reduced carrying value.  The adoption of SFAS No. 121 by the Company did not
result  in  a  write  down  of  such  assets.

3.          REVENUES  FROM  FRANCHISED  RESTAURANTS

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



                                  THREE MONTHS ENDED
                                  -------------------       
                                      AUGUST 31,       AUGUST 31,
                                         1996             1995
                                  -------------------  -----------
<S>                               <C>                  <C>

Royalties                         $           985,000  $   934,000
Franchise and development fees                116,000      229,000
Sublease rental income and other               31,000       27,000
                                  -------------------  -----------
Total                             $         1,132,000  $ 1,190,000
                                  ===================  ===========


</TABLE>



     4.          INCOME  TAXES

The Company did not provide for income taxes for the three month periods ended
August  31,  1996  and  1995  due  to  the  availability of net operating loss
carry-forwards.

The  Company's  federal income tax returns for fiscal years 1992 through 1995,
inclusive,  are  currently under examination by the Internal Revenue Service. 
The  examining  agent  has  not  issued  a  formal  report reflecting proposed
adjustments to tax returns previously filed by the Company.  Based on informal
communications  with  the  examining  agent,  the  Company  believes  that any
adjustment(s)  likely  to  be  proposed  will  (if  sustained  upon  a  final
determination)  impact  only  on the loss and credit carryovers and not have a
material  effect  on  the  Company's  current  tax  liability.

     5.          COMMITMENTS  AND  CONTINGENCIES

The  Company and its subsidiaries are parties to various legal actions arising
in the ordinary course of business as described in the Company's Annual Report
on  Form  10-K  for  the  fiscal  year  ended  May  31,  1996.  The Company is
vigorously contesting these actions and currently believes that the outcome of
such  cases  will  not  have  a  material  adverse  effect  on  the  Company.

Subsidiaries  of  the  Company  are  the  prime  lessee under various land and
building  leases for restaurants operated by the Company and its franchisees. 
Two  Miami  Subs  restaurants  which  are  sub-leased from subsidiaries of the
Company  to  franchisees  have  recently  closed.    The  Company (through its
subsidiaries)  is  reviewing  the  prospects  of  reopening  the  restaurants,
franchising  the  restaurants,  sub-leasing to new tenants, or terminating the
leases.

6.          SHAREHOLDERS'  EQUITY  AND  EARNINGS  PER  SHARE

At  August  31,  1996,  options and warrants representing a total of 6,306,000
shares  of  common  stock,  at  an  average  exercise  price  of  $2.47,  were
outstanding.

The  net  income  per share amounts are computed based on the weighted average
number  of  common  shares and common share equivalents outstanding during the
period,  computed  using  the treasury stock method.  Common share equivalents
include  convertible  preferred  stock,  options  and  warrants.



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

INTRODUCTION

The Company's revenues and expenses are derived principally from operating and
franchising  Miami  Subs  Grill  restaurants.    Franchise  revenues  consist
principally  of initial franchise fees, area development fees, monthly royalty
fees, and net sublease rental income.  In the normal course of operations, the
Company  may also derive revenues from the sale of restaurants to franchisees.

Restaurant  operating  costs  include  food and paper costs, direct restaurant
labor and benefits, marketing fees, 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, sales volumes
and  profitability  of franchised restaurants.  Initial franchise fees and any
gains  on  sales  of  restaurants  are  directly  affected  by  the  number of
restaurants  opened  and  sold  during  the  period.

The  Company's  fiscal year ends on May 31.  The results of operations for the
three  months  ended  August  31,  1996  are not necessarily indicative of the
results  that  may  be  expected  for  the  Company's  fiscal  year.

During  the  three  months  ended August 31, 1996, four franchised restaurants
opened,  one  Company  and  two franchised restaurants closed, and the Company
sold/transferred  four of its Company-operated restaurants to franchisees.  At
August  31,  1996,  there were 178 restaurants in the system, consisting of 32
Company  operated  restaurants  and 146 franchised restaurants.  At August 31,
1995,  there  were  167  restaurants  in  the system, consisting of 29 Company
operated  restaurants  and  138  franchised  restaurants.

COMPARISON  OF  THREE  MONTHS  ENDED  AUGUST  31,  1996  TO AUGUST 31, 1995

Total  Revenues

Total  Company  revenues increased 11.8% to $10.5 million in the first quarter
of  the current year, as compared to $9.4 million in the first quarter of last
year.   The increase in total revenues in the current period was primarily due
to  restaurant  sales  from  additional  Company  operated  restaurants  being
operated  by  the  Company  in  the  current  period.

Restaurant  Sales

The  Company's  total  restaurant  sales increased approximately 13.9% to $9.1
million in this year's first quarter, as compared to $8.0 million in the first
quarter  of last year.  The increase in sales resulted from additional Company
operated  restaurants,  which totaled 32 at quarter end, as compared to 29 one
year  earlier.    At  the  beginning  of  the current year quarter the Company
operated  37  restaurants  and during the quarter the Company sold/transferred
four  restaurants to franchisees and closed one restaurant at quarter end.  In
the prior year first quarter, the Company operated 30 restaurants for the full
quarter,  and  during  the  quarter  the  Company  sold  one  restaurant  to a
franchisee.

During  the current year's first quarter and in an effort to improve sales and
customer  traffic  in  its  restaurants,  the  Company  continued  a  recently
implemented  marketing  strategy  involving  price  discounting.   The Company
believes  that such programs were instrumental in achieving an approximate .5%
increase  in  same-store-sales  in the Company operated restaurants during the
quarter.    However  principally  as  a  result  of  the use of such marketing
programs,  the  Company's  restaurant operating profit and margins declined in
the  quarter  (see  "Restaurant  Operating  Costs").

Due  to  the  positive  impact  of  the marketing programs on sales during the
current  quarter and to a change in the composition of restaurants operated by
the  Company,  average  unit sales for restaurants operated by the Company for
all  of  the  current  year's  first quarter increased by approximately .7% as
compared  to  the  average  in  the  prior  year  quarter.

At August 31, 1996, Company operated restaurants were located in Florida (15),
Texas  (6),  Georgia (3), North Carolina (4), South Carolina (3), and New York
(1).    The  Company  currently  plans on franchising up to 21 of its existing
Company  operated  restaurants,  however  there can be no assurances that such
restaurants  will  be  franchised  on  terms  and conditions acceptable to the
Company.

Revenues  From  Franchised  Restaurants

Revenues  from  franchised  restaurants  declined  approximately  4.9% to $1.1
million  in the first quarter of the current year, as compared to $1.2 million
in  the  prior year's first quarter.  Although royalty fee income increased by
approximately  5.5% in the quarter, such increase was offset by a reduction in
initial  franchise  fee  income.  In addition, the prior year quarter included
income  of  $60,000  associated  with  the  termination  of  area  development
agreements  with  franchisees.    No such income was recognized in the current
quarter.

The  Company  and  its  franchises  recently  implemented a marketing strategy
involving  price  discounting.    The  Company  believes  that  such marketing
programs  were  in  large  part instrumental in improving the sales trends and
same-store-sales  comparisons in the franchised restaurants.  Same-store-sales
in  franchised  restaurants  decreased by approximately .2% during the current
year's  first  quarter.   Although it is expected that such marketing programs
will  continue,  there  can  be  no  assurance  that  they will be successful.

During  the  first  quarter  of  the current year, four franchised restaurants
opened  (including a co-branded test unit with a Dunkin' Donuts franchisee and
the  second  Miami Subs restaurant contained in a convenience store/motor fuel
facility), two franchised restaurants closed, and four restaurants operated by
the  Company  were  franchised.    There  were  146  franchised restaurants in
operation  at  August  31,  1996, as compared to 133 franchised restaurants at
August  31,  1995.

System-Wide  Sales

System-wide  sales, which includes sales from all Company operated restaurants
and  franchised restaurants, increased by approximately 12.5% to $40.0 million
in  this  year's  first  quarter,  as compared to $35.6 million in last year's
first  quarter,  principally  reflecting  the  increase in the total number of
units  in  the system (178 at August 31, 1996 as compared to 162 at August 31,
1995).    Same-store-sales for both Company and franchised units in the system
decreased by approximately .8% in the current quarter.  Average unit sales for
restaurants  in  operation  for  all  of  the  current  quarter  increased  by
approximately 2.5% as compared to average sales for units in operation for all
of  the  prior  year  quarter.

Net  Gains  From  Sales  of  Restaurants

The  Company  sold/transferred four of its existing restaurants to franchisees
during  the  first  quarter  of  the  current  year.    Gains  on  the sale of
restaurants  are  dependant  on  the  Company's  basis  in  and  the  overall
performance of such units.  Any 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  gains recognized in the first quarter of the current
year  amounted to $173,000, as compared to $84,000 in the prior year quarter. 
Although the Company intends to sell other existing restaurants in the future,
there  can  be  no  assurance  that any such sales will be consummated or that
gains  will  be  realized.

Interest  Income  and  Other  Revenues

Interest  income  declined in the current year's first quarter principally due
to the non-accrual of interest on certain delinquent notes receivable due from
franchisees.  Subsequent to quarter end, all but one of these delinquent notes
receivable  were  resolved  and  brought  current.  In connection with the one
delinquent  note receivable, which is secured by a Miami Subs Grill restaurant
and  related  assets,  the  Company  is pursuing collection efforts, which may
include  eviction  of  the  franchisee.

Restaurant  Operating  Costs

Restaurant  operating  costs  increased  to approximately $8.2 million in this
year's  first  quarter,  as  compared  to  $7.0  million  in last year's first
quarter,  principally  as  a  result  of  additional  Company  restaurants  in
operation  and correspondingly higher sales in the current year quarter.  Such
costs  as  a  percent  of  restaurant  sales increased to 91.1% in the current
quarter,  as  compared  to  88.6%  in the prior year quarter.  The increase in
operating  costs  was  a  result  of higher labor, cost of sales, repairs, and
amortization  of  pre-opening  costs,  and  also reflected the effect of price
discounting  offered  during  the  quarter  in  order  to  stimulate sales and
customer  traffic.

General,  Administrative  and  Franchise  Costs

General,  administrative  and  franchise  costs amounted to approximately $1.5
million or 13.9% of total revenues in the current quarter, as compared to $1.6
million  or  16.6% of total revenues in the prior year's quarter.  The Company
is  maintaining strict cost controls in all areas of its business resulting in
a  reduction in administrative costs including salaries, general marketing and
outside  legal  costs.  The Company expects that the amount of such costs will
continue  to  decline  in  the  second  half of the fiscal year as a result of
recently  implemented  corporate  streamlining  and as a number of the current
Company  operated  restaurants  are  franchised.

Depreciation  and  Amortization

Depreciation  and  amortization  increased  to  $515,000 in this year's first
quarter, as compared to $467,000 in the prior year quarter, principally due to
depreciation  associated  with  the  additional  restaurants  that the Company
operated  in  the  current  quarter.


Interest  Expense

Interest  expense  increased  to  $243,000  in  this year's first quarter, as
compared  to  $190,000  in  the  prior  year  quarter,  principally reflecting
additional debt outstanding in the current quarter ($8.9 million at August 31,
1996) as compared to the prior year quarter ($7.3 million at August 31, 1995).

Provision  For  Income  Taxes

A  tax  provision  was  not  provided for in the current or prior year periods
because  of  available  net  operating  loss carryforwards (see Note 4. to the
Consolidated  Financial  Statements).

LIQUIDITY  AND  CAPITAL  RESOURCES

During the three months ended August 31, 1996, the Company's principal sources
of cash were from earnings before depreciation and amortization and gains from
sales  of  restaurants  totaling approximately $409,000, from the repayment of
notes  receivable  totaling  approximately  $99,000 and proceeds from sales of
restaurants  totaling  $250,000.   The Company's principal uses of cash during
the  current  quarter  were  for  property  additions  and  improvements  of
approximately  $289,000,  scheduled debt repayments of approximately $573,000,
and  the  net  change  in  other assets and liabilities totaling approximately
$997,000.

Cash  and  cash  equivalents at August 31, 1996, amounted to $2,002,000 (which
includes  unexpended marketing fund contributions of $565,000), as compared to
$3,103,000  (including $525,000 in unexpended marketing fund contributions) at
the  beginning of the year.  At August 31, 1996, the Company's working capital
deficiency  was  $1,808,000, as compared to $1,579,000 at the beginning of the
current  fiscal  year.   The Company is 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.

Current  assets  at  August 31, 1996 include a non-recourse note receivable in
the  amount of approximately $1,270,000 resulting from the acquisition of five
restaurants  in March 1996.  The note, which is secured by 1,325,000 shares of
common  stock of the Company, was originally due on July 1, 1996.  The Company
has  extended  the  maturity  date  to  October  31, 1996 and is considering a
proposal  to  extend  the  maturity  for  one  year.

The  Company  recently  announced a revision of its growth strategy which will
focus  on  expanding  the  restaurant  chain  principally  through  franchised
restaurants.    In addition to continuing to expand its franchise base through
new  traditional  and non-traditional franchised restaurants, the Company also
intends  to  franchise up to 21 of its existing Company-operated restaurants. 
Although  the  Company believes that this new strategic direction will help to
improve  its  future  operating results and cash flow, there are no assurances
that  such  plans  will  be  successful.

In  addition to scheduled debt maturities/repayments during the balance of the
current  fiscal  year  of $966,000, the Company's capital requirements for the
balance of fiscal year 1997 relate primarily to necessary capital improvements
to  existing  restaurants  and  possible further enhancements to corporate and
restaurant  management information systems.  Such expenditures will be made as
required, and will take into consideration the Company's current liquidity and
working  capital  positions  and anticipated future cash flows from operations
and  other  sources.
In  connection with the planned sale of existing Company-operated restaurants,
the  Company  typically  provides financing for the sale and leases/sub-leases
the property to the franchisee.  Accordingly, the Company would be susceptible
to  default of the note and lease/sub-lease by the franchisee.  If the sale of
such  restaurants  are  consummated  on  terms  acceptable to the Company, the
Company's  working  capital  position  and  restaurant  operating  margins are
expected  to improve, royalty and interest income would increase, while at the
same  time  restaurant  sales  and  total  Company  revenues  would  decrease
substantially.   There can be no assurances however that any future sales will
be  consummated.

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 margins, and slower development
of  traditional  restaurants  by  franchisees.   Accordingly, emphasis will be
placed  on  franchising  certain  existing  Company  restaurants,  expanding
non-traditional  franchised  restaurants,  improving  operations  in  all
restaurants, developing new products, enhancing the effectiveness of marketing
programs,  and  overall  improvement  and  possible  refinements to the entire
system.

As  of  August  31,  1996,  the  Miami Subs restaurant system consisted of 178
restaurants,  of  which  125  of  the  restaurants were located in Florida, 51
restaurants  were located in 15 other states, and two restaurants were located
in  Ecuador.    Of  these  restaurants  32  were Company operated and 146 were
franchised.    The Company plans to significantly reduce the current number of
Company  operated  restaurants by selling units to franchisees, and intends to
focus  on franchise development, with the objective of expanding the franchise
system in existing markets as well as nationally and internationally.  In part
due  to  the  limited  number  of  restaurants  located  in  other states, the
restaurants operating outside of Florida have generally not been as successful
as  the  restaurants  operating  in Florida.  Additionally, as a result of the
current  concentration  of restaurants in Florida, the Company and its Florida
franchisees could be more severely affected by any adverse economic conditions
in  Florida  than  would  a  more  geographically  diversified  company.

Franchisees  currently  operate  146 of the 178 restaurants in the system, and
the  Company  intends  to  franchise up to 21 of its existing Company operated
restaurants.    The  Company  receives  royalty  and advertising fees from its
franchised  restaurants,  and also receives lease/sub-lease rental income from
certain  of  these  franchised  restaurants.    In  addition,  the Company has
guaranteed  certain  third  party equipment and real estate leases for certain
franchisees and typically finances the sale of Company-operated restaurants to
franchisees.  Accordingly, the Company's success and future profitability will
be  substantially  dependent  on  the  management  skills  and  success of its
existing  franchisees,  and  expansion  of  the chain will be dependent on the
Company's  ability  to  attract  qualified  franchisees  who  will  be able to
successfully  develop  and  operate  restaurants.   Two Miami Subs restaurants
which  are  sub-leased  from  subsidiaries  of the Company to franchisees have
recently  closed.    The  Company  (through its subsidiaries) is reviewing the
prospects  of  reopening  the  restaurants,  franchising  the  restaurants,
sub-leasing  to  new  tenants,  or  terminating  the  leases.

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.



Adoption  of  New  Accounting  Standard

In the first quarter of the current fiscal year, the Company adopted Statement
of  Financial  Accounting  Standards  (SFAS)  No.  121,  "Accounting  For  the
Impairment of Long-Lived Assets and For Long-Lived Assets to be Disposed Of." 
SFAS  No. 121 in general requires that such impaired assets be written down to
a reduced carrying value.  The adoption of SFAS No. 121 by the Company did not
result  in  a  write  down  of  such  assets.

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, 1996 for a description of certain legal
proceedings  involving  the Company.  There have been no material developments
in  these  legal  proceedings.    The  Company  is vigorously contesting these
actions  and  currently  believes  the  outcome  of such cases will not have a
material  adverse  effect  on  the  Company.

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  2,  1996                 By:   /s/  Jerry  W.  Woda
                                               JERRY  W.  WODA
                                               Senior Vice President,
                                               Chief Financial Officer,  and
                                               Pricipal Accounting Officer