Petros “Rocky” Paflias says he came up with the idea for the Gyro Shack.

Gus Zaharioudakis also says he came up with the idea  for the Gyro Shack.

Now the one-time friends are locked in a legal battle as the concept has branched out into franchising and expanded to nearby states.

Paflias sued Zaharioudakis in Ada County District Court earlier this year, alleging he improperly sold the business to a third party in 2015, breaking verbal and written contracts involving the now-booming greek restaurant business.

Lawsuit over a growing concept

According to court documents, Paflias says he sold a 50% interest in the Gyro Shack restaurant on Overland Rd. in Boise in 2009 to another man – Tom Herf. In his complaint, Pafilias said Herf then sold the 50% stake to Zaharioudakis later that year when Herf decided to move to Arizona.

Then, in February 2015 Zaharioudakis sold the entire business to Doug Miller and Seth Brink after health issues forced him to quit the business.

But in the lawsuit, Paflias said Zaharioudakis didn’t have the right to make that sale, and produced a contract between Herf and Zaharioudakis stating Herf had a first right of refusal to repurchase the stake in the business for $50,000.

Paflias claimed Herf had signed over the first right of refusal to him, but after a judge said that didn’t hold up, Herf joined the lawsuit against Zaharioudakis.

What’s unclear from the lawsuit documents reviewed by BoiseDev and an extensive interview with Pafilias is if Zaharioudakis was, in fact, purchasing all or only half of the Gyro Shack business and concept as Pafilias claims.

The bottom line: Rocky says Gus sold the restaurant chain and concept when he only owned 50% of it and ignored a first-right-of-refusal clause he and Tom Herf had to buy it back.

Friendship gone awry

Pafilias said his motivation is what he feels is an unfair perception. He claims he came up with the Gyro Shack concept and recipes.

“What upset me the most is the bragging that (Zaharioudakis) is the creator and that he designed it,” Pafilias said. “Those are all false lies. These are all my ideas and my dreams and what I said I was going to do. I felt he went behind my back and ran with it. He took glory on something he had no right to take glory in.”

In an interview with Boise Weekly earlier this year, Zaharioudakis does in fact say he put the concept together.

“We opened up the [restaurants] for the love of food, because I wanted a good gyro and I couldn’t find a good gyro in Boise, personally,” he explained to Boise Weekly. “So we went out and did it…we just wanted to feed everybody good food, good fresh food. That’s just what it’s all about.”

Zaharioudakis wouldn’t comment to BoiseDev on the lawsuit.

To hear Pafilias tell it, the two were friends, growing up in Boise’s Greek community after meeting in California in the 1990s. Rocky, whose legal name is Petros, is the founder and owner of Rockies Diner on Overland in Boise, as well as Burger Belly on Broadway. Both restaurants have been listed for sale in recent months.

“When Gus came to me and asked to be part of the Gyro Shack, he wanted to put his children in there to work to keep (them) out of trouble. I said ‘buy Tom’s part out,’ (and) he bought Tom out. The whole point is it was never a sale,” Pafilias said.

He claimed he wasn’t even aware of the subsequent sale to Miller and Brink until recently.

“I wasn’t aware of it,” he said. “I didn’t know. I heard things… people talk… I never talked. I didn’t think that Gus would do such a thing, especially to me… I’ve known him all my life.”

In the suit, Pafilias and Herf allege six separate counts, including breach of contract, breach of oral agreement and fraud.  For each count,  Pafilias and Herf are seeking “not less than $10,000” or an amount to be proved at trial.

Judge Lynn G. Norton allowed the case to move forward, and set a jury trial for August of 2019.

Gyro Shack today

Brink and Miller and their entity Perissos Inc. are not a party to the lawsuit.

Miller declined extensive comment, but said the purchase of the business in 2015 was “above board, legal and honest.”

“We checked into everything from the state and from a legal perspective,” he said. “If Gus had some other deals that were in play and in question they didn’t affect (our agreement).”

The chain is growing rapidly, and the Boise Weekly story earlier this year said it had commitments for 25 franchise locations. It just opened a second location in Vancouver this month, and a new location in Nampa last month.

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