“The economy is bad for small places. It’s been a tough route,” says Naser Derneika, owner of several Coney Islands around town called King of Queens, the last of which just bit the dust. Unlike the others, this K of Q got a second lease on life as the Gyro Palace.

When Derneika opened King of Queens in the Colonnade a few years ago, there were already several other restaurants in the small crescent-shaped mall, but he thought he had a lock on the burger and fries market. Then Bagger Dave’s opened. “The competition in the plaza is a little overwhelming. We used to sell a lot of burgers, so we either have to compete with someone with a huge sign that says ‘burger and fries’–or change.” The sign actually says “Legendary Burgers and Fries”–and Bagger Dave’s also has a liquor license.

Gyro Palace is focused on Middle Eastern favorites, like fattoush, grape leaves, hummus, and, of course, gyros. “I grew up on this food,” says Derneika, who is Lebanese. He had gyros on the menu before–what coney doesn’t?–but it was a presliced, frozen product. “In order to use the cone [of fresh meat], you have to sell eighty orders per day,” he says. He’ll be using the Kronos brand of cone, which he prefers to its primary rival, Grecian Delight, because it’s not as salty.

The other surprise he’s rolling out that he hopes will rescue him from the heavy shadow of Bagger Dave’s is “hippie hash,” available every day, but particularly showcased in a weekend breakfast buffet. He dismisses any suggestion that he’s copying one of the Fleetwood’s signature items: “I don’t know how they make it–we create our own.”

Gyro Palace, 865 Eisenhower (Colonnade). 997-9848. Mon.-Fri. 7 a.m.-10 p.m., Sat. 8 a.m.-8 p.m., Sun. 8 a.m.-4 p.m. gyropalaceannarbor.com