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Waiting on Wendy's.

While Jonesboro-Based Franchise Reorganizes, Wendy's Of Little Rock Looks To Expand

While the fate of one Wendy's Old Fashioned Hamburgers franchise rests in federal court, the owner of a Little Rock-based Wendy's franchise is taking steps to expand his presence in Arkansas.

Wendy's of the South Inc., a Jonesboro-based parent company that operates Wendy's of the Ozarks Inc. and Wendy's of Louisiana Inc., filed for Chapter 11 bankruptcy protection Aug. 4 in federal court.

Allen W. Bird II, a Little Rock lawyer and member of the Rose Law Firm, filed the bankruptcy petitions on behalf of Wendy's of the South and J. Murl Smith, the company's president and chief executive officer.

The petitions showed Wendy's of the South holding assets worth $1.4 million while debts were $4.5 million. Wendy's of the South operates 20 restaurants -- seven in Arkansas and the remainder in southern Louisiana.

A meeting of the corporation's creditors will be held Sept. 11 at the Jonesboro Post Office, according to Bird, with over 400 invitations extended to those owed money by the corporation. Matters of insurance, operating income and total assets will be discussed, Bird says.

"None may come. They may all come. You never know," says Bird, who was approached by Smith to handle the petitions due to his experience in bankruptcy cases.

Bird says Smith intends to continue operating all 20 restaurants in his franchise and has no intention of selling off any of them.

"This is what I call a true reorganization. They plan to pay off their debts over a period of time through future earnings," says Bird.

Headed North

Smith's financial problems, meanwhile, won't discourage Jerry Hamra from expanding beyond the central Arkansas region into the northern portion of the state.

Hamra, chairman and CEO of Wendy's of Little Rock Inc., says his company plans to open its first restaurant outside central Arkansas next month. With a site already acquired, Hamra expects to see construction begin on a Wendy's restaurant in Bentonville by Sept. 1.

Wendy's of Little Rock, one of the leading franchises in the national chain, operates 24 locations. The Little Rock franchise reported earlier this month an increase of more than 30 percent in net income for the first half of 1992, with cash sales up more than 11 percent and a projected sales figure of more than $28 million for 1992.

Hamra, who received the rights to the Bentonville operation from Wendy's International, say he's not interested in purchasing any of Smith's restaurants. He expects to build as many as 12 new restaurants in Arkansas by 1996, some in the northern half of the state.

"Our commitment is to build three a year in the next four years, and that includes Fort Smith," says Hamra, who was inducted into the Wendy's Hall of Fame for his franchise's performance as well as its community involvement.
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Title Annotation:Across Kansas: Northeast; Wendy's of Little Rock Inc. to expand
Author:Taylor, Tim
Publication:Arkansas Business
Date:Aug 24, 1992
Words:477
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