Robert Paganes, the CEO of Tubby’s Sub Shops and youngest of the five siblings who were involved in the sandwich chain, announced Monday that he, along with the chain’s executive vice president Bill Kiryakoza, are sole owners of the Michigan company founded in 1968.
One by one, Robert’s older siblings — Tom, 72; Terry, 71; Richard, 65; Ann McCallum, 63 — divested from the business and sold their stake to the remaining family members.
On Monday, the two partners said they acquired the ownership held by Terry Paganes, who they said sought to retire and had been reluctant to expand the chain.
“It’s a new day,” Robert Paganes, 57, said in a conference room at the company’s Roseville headquarters. The shop’s original menu hanging on the wall shows subs selling for $1.80. “It’s basically, like anything else, you have to look at the new business model and see where you’re at.”
Now, with the company completely in their hands, the owners said they aim to invest about $50,000 per store to update the look, equipment and menus. They intend to add bread ovens and introduce healthier items while continuing to promote the long-time favorites.
They also plan to open 20 to 30 franchise stores a year in cities across the country.
Paganes, who said he started working in the store at age 12, acknowledged there is risk to this strategy that, for years, his older siblings were unwilling to take.
The chain started about 45 years ago, when Richard Paganes wanted to open his own sandwich shop.
The story goes that he had an idea for a sandwich shop, and one day he got a flat tire in front of a building in St. Clair Shores that had a for rent sign on it.
He called the number on the sign and that location became the first store. The name of the chain, Tubby’s, came from the a popular comic strip character with the same name. A version of the character, a boy in a sailor suit, was used to advertise the shop.
As the chain grew, Richard’s siblings joined and also became owners.
Robert worked his way up through the company from slicing meat as a boy to CEO in 1999. But along the way, he said he occasionally clashed with his brothers, who did not agree with his plans for expansion.
“I had a lot of fighting,” he said. “I’m the youngest. Who wants to listen to the youngest brother?”
Paganes said he’ll focus on the restaurant and operations, while Kiryakoza, 54, who joined the company about five years ago and has experience in commercial real estate, concentrates on the franchising. They said they share the same vision for the business.
They said there is tremendous potential for the company to grow, even as they compete with larger competitors such as Subway and Jimmy John’s.
Within the next month, the owners said, they are set to open new stores in Richmond, Romulus and Ecorse. By the end of the year, they plan to open seven more. One group, they said, is talking to them about opening 150 franchise stores during the next five years.
“Our ambitions are going to lie with what we can handle,” Paganes said. “We don’t want to sit here and have these big grandiose ideas about having 1,000 locations. But we can be a nice-size company with 150 locations — or even 100.”
