Big bucks follow fast food concepts to Arkansas.

A couple of Arkansas restaurant franchisees have discovered exactly how lucrative hamburgers, tacos and fried chicken can be.

A national restaurant publication, Restaurant Finance Monitor, has cited two Of Arkansas' franchisees as among the largest in the United States.

Kenneth King, owner of K-MAC Enterprises in Fort Smith, and Jeff Voskamp, chief operating officer and an owner of Four Jay Enterprises in North Little Rock, are Nos. 23 and 146 respectively of the 200 largest franchisees in the nation.

King's K-MAC Enterprises operates 100 Taco Bells and eight KFC's in Arkansas, Oklahoma, Missouri and Texas. Revenue from K-MAC's restaurants has been estimated by the Restaurant Finance Monitor at near $96 million. K-MAC employs about 2,250 people.

Four Jay Enterprises is an investment group that owns 36 Wendy's Old Fashioned. Hamburgers restaurants in the Arkansas, with about 1,300 employees. The company's Wendy's franchises had 1996 estimated revenue between $20 million and $30 million, ac- cording to Restaurant Finance Monitor. Voskamp says he thinks that revenue estimate is a little low.

"We've been on that list at least the last five years," Voskamp says. "The numbers that they come up with are usually low."

The Monitor uses surveys and other research to determine an estimate of annual revenues.

The reports shows an average revenue growth for the top 200 franchisees of about 9 percent from '95 to '96. The total revenue of the 200 companies in 1996 was about $11.7 billion, compared with about $10.8 billion in 1995.

The growth in the number of restaurants operated by the top 200 franchisees was from 12,325 in 1995 to 12,846 in 1996, or about 4 percent more restaurants.

Requirements for buying a restaurant franchise from Taco Bell include a minimum initial investment of $3 million. KFC requires $500,000 in liquid assets, a net worth of $1 million and five years of food service experience. To qualify for a Wendy's franchise, an individual must prove a net worth of at least $500,000 with liquid assets of at least $250,000.

K-MAC has increased the number of its Taco Bells from the low 90s to 100 with plans to add several more throughout 1997, says a spokesman for the company. The most recent additions to the K-MAC fold include a Taco Bell in the Northwest Arkansas Mall and one in the Texarkana market.

Plans for future restaurants include a "two-in-one" restaurant with half the store being a Taco Bell and the other a KFC. This concept will open in Paris, Ark., and in Wagoner, Okla.

Fried Chicken and Gasoline 

The two-in-one concept is a version of the co-branding that highway travelers along the intestates of America have gotten used to. Voskamp says he's not sure if Four Jay will opt to co-brand any Wendy's soon. He says he thinks he can put in 10-15 additional free-standing restaurants in the state before considering co-branding.

"I don't expect us to do that within the next two or three years," he says. "We have an opportunity to put in 1015 more stores in the state before we look at co-branding. It's an interesting concept, but we're not ready to do it."

Voskamp says the perfect opportunity for co-branding exists in communities with populations of 4,000 to 5,000 that are on an interstate. He says the residents of the community, who long for a restaurant like Wendy's, and travelers combine to make co-branded stores successful. He adds that if Wendy's can be successful without teaming with a gas station in a market, he wants to take that route.

K-MAC has Taco Bells and KFC's in gas stations throughout its markets.

Winning Franchises

Of the Monitor's top 200 franchisees, the most popular restaurant concept is Burger King, with 41 franchisees. The second most popular concept is Wendy's, with 26 franchisees out of the top 200.

Voskamp says Wendy's is popular with franchisees because the corporate franchiser has a good concept that is popular with consumers. He says support from the Wendy's International Corp. helps ensure success of franchisees.

"We cater to the adult tastes," Voskamp says. "We change the menu to have new items like the pita pocket, and we serve all menu items to order. The customer appreciates that."

Sales growth for Voskamp's Wendy's has averaged about 9 percent a year for the past five years. Four Jay Enterprises bought the Wendy's from the corporation after Jerry Hamra's estate sold the stores back to the headquarters in 1995. In December of that year, Voskamp and a group of investors from Memphis bought the restaurant franchises from the corporation.

Voskamp says he worked for Hamra's Wendy's of Little Rock from 1976-95. Voskamp started as a manager trainee and eventually was head of operations for Hamra's restaurants.

"It's basic," he says of Wendy's success. "If you have a Wendy's franchise and you operate it correctly, you will be successful."

He says, without comparing himself to past owners of Wendy's in northwest Arkansas who have failed, that his restaurants in Bentonville and Springdale are successful because he sticks to the concepts that work: good service, good food and a flexible menu.

Franchise Support

For the franchise, Voskamp says Four Jay gives Wendy's International 4 percent of the sales for royalties and 2.5 percent for marketing. In return, Wendy's headquarters provides national advertising, real estate support, construction support and training.support to the franchisees.

"These things make you successful," he says.

National marketing campaigns and promotions are important to most franchisees. A spokesman for K-MAC says Taco Bell promotions for the Batman and StarWars movies have helped ensure record sales for 1996 and for this year.

Pepsico, the parent company of Taco Bell, Pizza Hut and KFC, plans to spin off the restaurant franchises. Burger King decided in the early 1990s to sell its company stores to investment groups and to allow those groups to create large blocks of stores. The move has been successful for Burger King and K-MAC officials say they expect the same opportunities for future growth with Taco Bell and KFC.

Currently, KFC has 17 franchisees on the list of 200, making it the fourth most popular concept. Taco Bell also has 17 franchisees in the top 200.

In 1995 and 1996, particularly in central Arkansas, casual-theme restaurant franchises, like Chili's Grill and Bar and Applebee's Neighborhood Grill and Bar have taken some of the traditional fast-food market, Voskamp says.

"We've done fairly well over the past five years, but we've been a little flatter for about the last three years because of the casual-theme places," he says. "Look at the number of the them that have come into this market. They are popular and do well, but we think we'll have better numbers this year."