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                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549
 
                               ----------------
 
                                   FORM 10-K
 
                 FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO
          SECTIONS 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
(MARK ONE)
 
  [X]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
     EXCHANGE ACT OF 1934
                  FOR THE FISCAL YEAR ENDED DECEMBER 30, 1996
 
                                      OR
 
  [_]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
     SECURITIES EXCHANGE ACT OF 1934
 
                 FOR THE TRANSITION PERIOD FROM       TO
                       COMMISSION FILE NUMBER 333-04261
 
                                AMERIKING, INC.
 
            (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
              DELAWARE                                 36-3970707
 
 
   (STATE OR OTHER JURISDICTION OF        (I.R.S. EMPLOYER IDENTIFICATION NO.)
   INCORPORATION OR ORGANIZATION)
 
 
 
  2215 ENTERPRISE DRIVE, SUITE 1502                       60154
        WESTCHESTER, ILLINOIS                          (ZIP CODE)
 
   (ADDRESS OF PRINCIPAL EXECUTIVE
              OFFICES)
 
        REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE 708-947-2150
 
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
 
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        EACH    NAME OF EACH EXCHANGE ON
        CLASS       WHICH REGISTERED
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SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
 
                               (TITLE OF CLASS)
                               (TITLE OF CLASS)
 
  Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.  Yes   X    No
 
  Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K:  [X]
 
  The aggregate market value of the voting stock held by non-affiliates (as
defined in Rule 405) of the registrant as of March 15, 1997 was approximately
$47,454.
 
  The number of shares outstanding of each of the registrant's classes of
common stock as of March 15, 1997 was 893,290 of common stock, $.01 par value
per Share (the "Common Stock").
 
                      DOCUMENTS INCORPORATED BY REFERENCE
  Portions of the following document have been incorporated by reference into
this Annual Report on Form 10-K.
 
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                        DOCUMENT                            WHERE INCORPORATED
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      AmeriKing's Inc.                                           Part IV
       Registration Statement (Reg. No. 333-04261)
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                               TABLE OF CONTENTS
 
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 PART I
    ITEM 1.  BUSINESS...................................................     1
    ITEM 2.  PROPERTIES.................................................     9
    ITEM 3.  LEGAL PROCEEDINGS..........................................     9
    ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS........    10
 PART II
    ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
              STOCKHOLDER MATTERS.......................................    10
    ITEM 6.  SELECTED FINANCIAL DATA....................................    10
    ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
              AND RESULTS OF OPERATIONS.................................    13
    ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA................    18
    ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
              AND FINANCIAL DISCLOSURE..................................    35
 PART III
    ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.........    35
    ITEM 11. EXECUTIVE COMPENSATION.....................................    37
    ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
              MANAGEMENT................................................    40
    ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.............    41
 PART IV
    ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES....................    43
             Financial Statements Included in Item 6....................    43
             Schedules Omitted as Not Required and Inapplicable.........    43
             Exhibits...................................................    43
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                                    PART I
 
  Certain statements in this Form 10-K may constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements involve known and unknown risks,
uncertainties, and other factors which may cause the actual results,
performance, or achievements of AmeriKing, Inc. ("AmeriKing" or the "Company")
to be materially different from any future results, performance, or
achievements expressed or implied by such forward-looking statements. Such
factors include, among others, the following: general economic and business
conditions; competition; success of operating initiatives; development and
operating costs; advertising and promotional efforts; brand awareness; adverse
publicity; acceptance of new product offerings; availability, locations, and
terms of sites for store development; changes in business strategy or
development plans; quality of management; availability, terms, and deployment
of capital; business abilities and judgment of personnel; availability of
qualified personnel; food, labor, and employee benefit costs; changes in, or
the failure to comply with, governmental regulations; regional weather
conditions; construction schedules; and other factors referenced in this Form
10-K.
 
ITEM 1. BUSINESS
 
RECENT DEVELOPMENTS
 
  On March 20, 1997, the Company entered into a contract to sell to a third
party franchisee, 10 restaurants in the south Chicago suburban area, as
required by the acquisition of the Franchise restaurants, for $8.2 million in
cash. For fiscal 1996, the restaurants to be sold accounted for approximately
$11.4 million and $700,000 of the Company's revenues and restaurant
contribution, respectively. The closing of the sale of the restaurants is
expected to occur in the second quarter of fiscal 1997, at which time the
Company will recognize a gain on sale of the stores in the amount of
approximately $1.9 million.
 
GENERAL DEVELOPMENT
 
  AmeriKing is the second largest independent Burger King franchisee in the
United States with 184 restaurants located primarily in eleven Midwestern and
Southern states. The Company was formed in 1994 by a group consisting of
independent Burger King franchisees, former Burger King Corporation ("BKC")
executives and The Jordan Company. Since inception, the Company has acquired
175 Burger King restaurants and developed nine new Burger King restaurants.
 
  AmeriKing, Inc. and its wholly owned subsidiary, National Restaurant
Enterprises, Inc. were organized as Delaware corporations and incorporated on
August 17, 1994. AmeriKing's principal executive offices are located at 2215
Enterprise Drive, Suite 1502, Westchester, Illinois, 60154. Its telephone
number is (708) 947-2150.
 
BURGER KING CORPORATION
 
  Overview. According to information publicly filed by Grand Metropolitan,
PLC, the parent corporation of BKC, BKC is the second largest restaurant
franchisor in the world, with system-wide restaurant sales of $9.0 billion for
its fiscal year ended September 30, 1996. There are more than 8,000 Burger
King restaurants worldwide, of which over 90% are operated by approximately
1,500 independent franchise groups. Burger King's share of the quick-service
hamburger restaurant market grew from 18% in 1995 to 19.2% in 1996. As is the
case for all Burger King franchisees, the Company is required to comply with
BKC guidelines as to menu and operations, restaurant configurations and
marketing and promotion.
 
  Menu and Operations. The Burger King system philosophy is characterized by
its "Have It Your Way" service, flame-broiling, generous portions and
competitive prices. Each of the Company's Burger King restaurants offers a
standard menu containing a variety of traditional and innovative food items.
Burger King restaurants feature flame-broiled hamburgers, the most popular of
which is The Whopper(R) sandwich. The
<PAGE>
 
Whopper is a large, flame-broiled hamburger on a toasted bun garnished with
combinations of lettuce, onions, pickles, tomatoes and mayonnaise. At present,
the standard menu of all Burger King restaurants consists primarily of
hamburgers, cheeseburgers, chicken sandwiches, fish sandwiches, breakfast
items, french fried potatoes, salads, shakes, desserts, soft drinks, milk and
coffee. In addition, promotional menu items are introduced periodically for
limited times.
 
  The Company's Burger King restaurants are typically open seven days per week
with minimum operating hours from 7:00 AM to 11:00 PM. Burger King restaurants
are of distinctive design and are generally located in high-traffic areas
throughout the United States. The Company believes that convenience of
location, speed of service, quality of food and price/value of food served are
the primary competitive advantages of Burger King restaurants. The Company
believes that it will continue to realize significant benefits from its
affiliation with BKC as a result of the widespread recognition of the Burger
King brand, the effectiveness of BKC's national marketing programs and the
overall management of the Burger King system, including product development,
quality assurance and strategic planning.
 
  The Company participates in a variety of Burger King programs designed to
increase restaurant revenues and profitability. In October 1993, BKC
implemented the first stages of a nationwide Value Menu Program. The program
consisted of discounted combination meals and menu items designed to give the
consumer greater value while increasing customer traffic and profitability.
BKC has also focused its efforts on a back-to-basics marketing strategy by
eliminating over 30 items from its menu and emphasizing its core hamburgers,
french fries and soft drinks. In addition, as part of its "Bigger, Better
Burgers" campaign, BKC increased its standard hamburger patty size to 2.8
ounces, which is 75% larger than McDonald's current standard size of 1.6
ounces.
 
  Restaurant Configurations. The Company's Burger King restaurants consist of
one of several building types with various layouts, seating capacities and
engineering specifications. BKC's traditional restaurant contains
approximately 2,500 square feet, seats 86 customers and offers interior design
flexibility. BKC also features alternative restaurant formats ranging in size
from 500 to 4,000 square feet and seating capacities ranging up to over 100
customers. BKC has developed a number of standard and non-traditional
restaurant formats which enable maximum seating capacities from available
square footage in such facilities as airports, hospitals, college campuses,
gas stations and retail shopping centers. Substantially all of the Company's
restaurants are traditional free-standing restaurants with seating capacities
of at least 50 and which contain drive-thru windows. According to BKC, over
50% of all restaurant sales in the Burger King system are generated from
drive-thru windows.
 
  National Marketing and Promotion. The Burger King brand has been in
existence for over 40 years. BKC currently has an annual advertising and
promotional budget of over $240 million to heighten brand awareness. BKC's
advertising campaigns are generally carried on television, radio and in mass
circulation print media (national and regional newspapers and magazines). BKC
franchisees are required to contribute 4.0% of monthly gross sales from
restaurant operations to a BKC advertising fund, which contributions are
generally utilized by BKC for its advertising and promotional programs and
public relations activities. BKC has also entered into selective partnership
arrangements to help promote its products.
 
COMPANY OPERATIONS
 
  Management Structure. All executive management, finance, marketing and
operations support functions are conducted centrally at the Company's
Westchester, Illinois headquarters. In each of its six regions (Chicago,
Virginia, Colorado, Texas, Tennessee and Cincinnati), the Company has a
regional managing director who is responsible for the operations of all
Company Burger King restaurants within the assigned region. Each of these
managing directors must be approved by BKC. Supporting the managing director
in Chicago are two directors of operations (who each oversee an average of 58
restaurants), who supervise 17 district managers (who directly supervise five
to nine restaurants each). The five other managing directors are also
supported by district
 
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managers. The district managers are responsible for direct oversight of the
day-to-day operations of the Company's Burger King restaurants. Typically,
district managers have previously served as restaurant managers within the
Burger King system. A typical Company restaurant is staffed with a full-time
manager, one to three assistant managers and full-and part-time hourly
employees.
 
  Management Incentives and Retention. Managing directors, directors of
operations, district managers and most restaurant managers are compensated
with a fixed salary plus a bonus based upon the performance of the restaurants
under their supervision. Evaluation criteria include compliance with Burger
King's restaurant operating guidelines and restaurant profitability. Senior
management believes that the Company's larger size and regional focus provide
significant professional development opportunities for the Company's
management and operating personnel not available to smaller franchisees. The
Company believes that its compensation structure and professional development
opportunities are significant advantages in attracting and retaining qualified
management personnel.
 
  Training. The Company maintains a comprehensive training and development
program for all of its personnel. This program emphasizes the Burger King
system-wide operating procedures, food preparation methods and customer
service standards. The management training program features an intensive five
week hands-on restaurant training period, followed by two weeks of classroom
instruction (one week of simulated restaurant management activities and one
week of food sanitation). Special emphasis is placed on quality food
preparation, service standards and total customer satisfaction. Upon
certification, new managers work closely with experienced managers to solidify
their skills and expertise. The Company's existing restaurant managers
regularly participate in the Company's ongoing training efforts, including
classroom programs and in-restaurant programs. In addition, BKC's training and
development programs are also available to the Company.
 
  Management Information System. The Company's customized management
information system, REMACs, provides daily tracking and reporting of customer
traffic counts, sales, average check values, menu item sales, inventory
variances, key labor measures and other detailed information in comparative
form, by individual restaurant and for the Company as a whole. The Company's
integrated management information system, typically installed in its
restaurants within 60 to 90 days of acquisition, transmits data on a daily
basis to Company headquarters. This information is available by 6:00 AM the
following day and can be accessed by district managers on a remote basis using
a laptop computer. The Company's sophisticated management information system,
typically not affordable by smaller Burger King franchisees and other smaller
quick-service restaurant chains, provides management with the ability to
identify and quickly capitalize on restaurant sales enhancement and profit
opportunities. The Company utilizes its management information system to: (i)
minimize shrinkage and control labor costs; (ii) monitor point-of-sale order
taking; (iii) effectively manage inventory; and (iv) quickly integrate
accounting systems following acquisitions. Customized exception reporting is
used to focus operations on high priority issues and opportunities. The
Company also utilizes the system to increase sales revenues by assisting
restaurant managers in optimally scheduling the restaurant work force during
any particular shift at the restaurant work stations for which they are best
qualified. In addition, the system enables the Company to analyze various
promotional programs using product mix information.
 
FRANCHISE AGREEMENTS
 
  The Company operates Burger King restaurants through its wholly owned
subsidiaries, each of which is a party to a BKC franchise agreement. The BKC
franchise agreements do not grant any franchisee exclusive rights to a defined
territory; however, the Company, based upon its review of BKC's Uniform
Franchise Offering Circular and its experience with BKC, believes that BKC
generally seeks to ensure that newly granted franchises do not materially
affect the operations of existing Burger King restaurants. Acceptance as a
franchisee is based upon several factors, including management experience,
qualifications, financial status and net worth. The franchise agreements
require, among other things, that all restaurants be of standardized design
and operated in a prescribed manner, including utilization of the standard
Burger King menu. Most franchise agreements provide for a term of 20 years,
and, at the option of the franchisee and BKC, a renewal (successor) franchise
agreement may be granted by BKC provided that the restaurant meets BKC's
operating standards applicable at that time
 
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and the franchisee is not in default under the relevant franchise agreement.
The BKC franchise agreements are noncancelable except for failure to abide by
the terms thereof and in certain other limited circumstances.
 
  BKC franchise agreements generally are renewable for an additional term
based upon the form of franchise agreement applicable at that time, provided
that the franchisee (i) pays a successor franchise fee equal to the franchise
fee applicable at that time, (ii) has demonstrated an ability to operate the
business consistent with the standards set forth in the franchise agreement,
(iii) agrees to make capital improvements to the subject restaurant to bring
the restaurant up to BKC's image standards applicable at that time and (iv) is
not then currently in default with respect to any other obligations to BKC,
including pursuant to other franchise agreements. The Company, through its
district managers, closely supervises the operation of all of its restaurants
to ensure that operating policies are followed and that the requirements of
the franchise agreements are met. The amount of capital expenditures that may
be required to bring a restaurant up to BKC's current standards at any given
time varies widely depending upon the magnitude of the required changes and
the degree to which the franchisee has made interim changes to the restaurant.
Within five years of December 30, 1996, 30 of the Company's subsidiaries'
current 184 franchise agreements with BKC, which contributed $30.7 million in
restaurant sales in fiscal 1996, are scheduled to expire.
 
  The Company intends to expand its operations of Burger King restaurants
through both new restaurant development and acquisitions. Pursuant to current
BKC policies and procedures applicable to the Company, BKC's approval is
required for the development of new Burger King restaurants by the Company and
the acquisition of Burger King restaurants by the Company from other Burger
King franchisees. BKC's consent to such renewals, acquisitions or development
may be withheld in BKC's sole discretion.
 
  Current BKC policies and procedures also place certain restrictions on the
management structure of the Company and its subsidiary franchisees. For
example, a managing owner and an owner must be named in each franchise
agreement. The managing owner has the authority to bind the franchisee in its
dealings with BKC and to direct any action necessary to ensure compliance with
the franchise agreements and related documents, including leases with BKC. In
addition, the managing owner is personally liable to BKC for the franchisee's
obligations under such agreements. Also, each franchise agreement requires
that a managing director be designated to ensure that the day-to-day operation
of the relevant franchised restaurant complies with BKC's standards. BKC has
the right to terminate its franchise agreement with a franchisee if (i) the
franchisee or the managing owner is convicted of a crime punishable by a term
of imprisonment in excess of one year or (ii) the franchisee, the managing
owner or a managing director engages in conduct which reflects unfavorably on
the franchisee or Burger King system generally. Managing owners cannot be
replaced without receiving the consent of BKC. In addition, absent BKC's prior
written consent, managing owners are required to hold a 5% voting interest in
a corporate franchise and to personally guarantee the franchisee's obligations
to BKC. Furthermore, no managing owner or owner may sell, encumber or
otherwise transfer any portion of his equity interest in the Company without
first obtaining the consent of BKC. After the transfer of its equity interest,
managing owners remain personally obligated to BKC under the franchise
agreements and any other agreements between the franchisee and BKC, unless
such obligation has been fully satisfied or waived by BKC.
 
  Pursuant to the BKC franchise agreements, BKC may terminate all the
franchise agreements with the Company's subsidiary franchisees or the
applicable subsidiary franchisee if, as applicable, any person serving on the
board of directors of the Company or the applicable subsidiary franchisee is
(i) an employee of BKC, (ii) an owner (subject to certain exceptions), board
member or principal or employee of any business that is then approved by BKC
as a supplier to the Burger King system or (iii) an owner (subject to certain
exceptions), board member or principal or employee of any hamburger restaurant
business other than the Burger King restaurant business.
 
OBLIGATIONS TO BURGER KING CORPORATION
 
  BKC franchise agreements provide for a one-time franchise fee (currently
$40,000), a monthly royalty fee of 3.5% of each restaurant's gross sales and a
monthly advertising contribution of 4.0% of gross sales. During fiscal 1996,
the Company paid BKC an aggregate of $6.9 million in royalty fees and $9.2
million in advertising contributions.
 
 
                                       4
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  BKC is the lessor on approximately 60% of the Company's currently leased
properties, primarily as a result of the Company's initial acquisition of
Burger King restaurants from BKC. The Company guarantees all of the
obligations of its subsidiaries under these leases. Under certain lease
agreements with BKC affiliates, the Company's subsidiaries made rent payments
aggregating $10.1 million during fiscal 1996. In connection with the execution
of the lease agreements, the Company guaranteed the payment and performance
obligations of each of its subsidiaries. In addition, the Company has agreed
to guarantee the payment and performance obligations under each of the
franchise agreements between BKC and its subsidiary franchisees.
 
  As required by BKC regulations, the Company's obligations under the Senior
Notes (as defined), the Senior Preferred Stock (as defined) and, if issued,
the Exchange Debentures (as defined) will be subject to an intercreditor
agreement pursuant to which the Company's obligations in respect of such
securities are subject to the prior payment in full of all indebtedness,
liabilities and other obligations of the Company and its subsidiaries to BKC
under the BKC franchise agreements, BKC leases and any other indebtedness of
the Company and its subsidiaries to BKC.
 
  The Company has committed to BKC that, without BKC's prior written consent,
(i) it will not pay cash dividends on the Senior Preferred Stock on or prior
to December 1, 2001 and (ii) it will not pay cash dividends to holders of
Common Stock until the Senior Notes are repaid in full and the Senior
Preferred Stock is redeemed or otherwise retired. In addition, the Company has
committed to BKC that it will make capital expenditures at its AmeriKing
Tennessee Corporation I restaurants of approximately $1.5 million on or before
September 7, 1997, of which approximately half had been made as of December
30, 1996. The Company has further committed to BKC that for the foreseeable
future (i) it will make capital expenditures on its existing restaurants equal
to 1% of its gross sales and (ii) it will spend an amount equal to 1% of its
gross sales on local advertising. The Company has also committed to BKC that
it will develop 17 restaurants in fiscal 1997. In the event the Company fails
to develop at least 14 restaurants in fiscal 1997, the Company will pay BKC
$150,000. In addition, to the extent the Company develops 13 or fewer
restaurants in fiscal 1997, the Company will be obligated to pay BKC $75,000
for each restaurant less than 14 it fails to develop.
 
ADVERTISING AND PROMOTION
 
  The Company supplements BKC's current $240 million annual advertising budget
and promotional activities with local advertising and promotions, including
purchasing additional television, radio and print advertising and running
promotional programs that support national programs with local tie-ins to
other consumer brands. These local tie-ins have included cross promotions with
the Colorado Rockies, Fannie May Candies and Northwestern University, among
others. Other promotional programs include coupons and price discounts, which
are tailored by the Company to appeal to its customer base depending on
demographics and other factors, thereby creating flexible and directed
marketing programs. For fiscal 1996, the Company spent approximately $834,000
on supplemental local advertising and promotions, and plans to continue its
local advertising and promotional programs at comparable levels in the future.
 
SUPPLIES AND DISTRIBUTION
 
  The Company is a member of a national purchasing cooperative created by and
for the Burger King system known as Restaurant Services, Inc. ("RSI"). RSI is
an independent, member-owned, non-profit cooperative which provides services
on behalf of, and for the benefit of, Burger King restaurant operators. RSI
negotiates the lowest cost for the Burger King system while improving quality,
enhancing competitiveness and ensuring the best possible value. RSI has the
sole and exclusive responsibility for negotiating purchasing arrangements for
the Burger King system with respect to certain paper goods, restaurant
supplies, food and drink products, certain equipment and many other items
mutually agreed to by Burger King franchisees for use in the Burger King
system. The Company uses its purchasing power to negotiate directly with
certain other vendors, as well as each of its distributors, to obtain
favorable pricing and terms for the distribution of its products. Currently,
the Company's primary distributor of foodstuffs and supplies is ProSource
Distribution Services, Inc. ("ProSource").
 
 
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  All BKC-approved suppliers are required by BKC to purchase all foodstuffs
and supplies from BKC-approved manufacturers and purveyors. BKC is responsible
for quality control and supervision of these manufacturers and purveyors, and
BKC monitors all BKC-approved manufacturers and purveyors of its foodstuffs.
BKC regularly visits these manufacturers and purveyors to observe the
preparation of the foodstuffs and conducts various tests to ensure that only
high quality foodstuffs are sold to BKC-approved suppliers, distributors and
franchisees. In addition, BKC coordinates and supervises audits of approved
suppliers and distributors to determine continuing product specification
compliance and to ensure that manufacturing plant and distribution center
standards are met.
 
  The Company believes that reliable alternative sources for virtually all
restaurant supplies are readily available at competitive prices should the
arrangements with ProSource or any other existing supplier or distributor
change.
 
QUALITY ASSURANCE
 
  The Company's operations are focused on achieving a high level of customer
satisfaction, with speed, accuracy and quality of service closely monitored.
The Company's senior management and restaurant management staff are
principally responsible for ensuring compliance with the Company's and BKC's
operating procedures. The Company and BKC have uniform operating standards and
specifications relating to the quality, preparation and selection of menu
items, maintenance and cleanliness of the premises and employee conduct.
Detailed reports from the Company's own management information system and
surveys conducted by the Company or BKC are tabulated and distributed to
management on a regular basis to help maintain compliance. In addition to
customer satisfaction, these reports track comparable sales and customer
counts, labor and food costs, inventory levels, waste losses and cash
balances.
 
  All Burger King franchisees operate subject to a comprehensive regimen of
quality assurance standards set by BKC, as well as standards set by Federal,
state and local governmental laws and regulations. These standards include
food preparation rules regarding, among other things, minimum cooking times
and temperatures, sanitation and cleanliness. In addition, BKC has set maximum
time standards for holding unsold prepared food. For example, sandwiches and
french fries are required to be discarded after ten minutes and seven minutes
following preparation, respectively. The "conveyor belt" cooking system
utilized in all Burger King restaurants, which is calibrated to carry
hamburgers through the flame broiler at regulated speeds, is one of the safest
cooking systems among major quick-service restaurants and helps to ensure that
the standardized minimum times and temperatures for cooking are met.
 
  The Company closely supervises the operation of all of its restaurants to
help ensure that standards and policies are followed and that product quality,
customer service and cleanliness of the restaurants are maintained. In
addition, BKC may conduct unscheduled inspections of Burger King restaurants
throughout the nationwide system.
 
BUSINESS STRATEGY
 
  AmeriKing's business strategy is to continue to increase revenues,
restaurant contribution and earnings before interest, taxes, depreciation and
amortization. The Company's strategy is based on the following elements:
 
  Develop New Burger King Restaurants in Existing Markets. The Company seeks
to develop new Burger King restaurants in existing markets where it has
established a significant presence, enabling the Company to enhance its
operating leverage and increase overall margins and profitability. Management
believes that the underpenetration of the Burger King system relative to other
quick-service hamburger concepts provides the Company with significant new
development opportunities. Furthermore, management believes the Company's new
restaurant development risk is substantially reduced due to: (i) the proven
success of the Burger King concept; (ii) the predictability of development
costs and restaurant profitability compared to that of newer restaurant
concepts; and (iii) management's extensive experience within the Burger King
system. The Company currently leases all but one of its properties, minimizing
its cost to develop new restaurants.
 
 
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  To date, the Company has developed nine new restaurants. Prior to developing
a new restaurant, the Company's senior management conducts an extensive site
selection process with significant input from BKC's development field
personnel, including an analysis of projected development costs and
anticipated profitability on a per location basis. The Company also uses
regional and local developers, as well as former Burger King restaurant owners
with significant knowledge of local markets, to assist in site selection and
in reviewing zoning requirements and other regulatory matters related to the
construction of new Burger King restaurants.
 
  Pursue Strategic Acquisitions of Burger King Restaurants. The Company
intends to selectively pursue strategic acquisitions in the highly fragmented,
growing Burger King system. Since 1994, the Company has successfully completed
175 restaurant acquisitions for an aggregate purchase price of approximately
$138 million. The Company evaluates each prospective acquisition using a set
of stringent criteria, including the potential for future fill-in acquisitions
and new restaurant development in targeted markets and the overall
attractiveness of market demographics. The Company seeks to enter new
geographic markets through acquisitions that provide the critical mass
necessary to realize operating efficiencies. Six of the Company's nine
acquisitions to date have been of large, regional operations, each consisting
of more than 10 restaurants. AmeriKing seeks to augment new market
acquisitions with fill-in acquisitions, which enable the Company to:
(i) achieve greater restaurant penetration within existing markets; (ii)
capitalize on its significant operating leverage; and (iii) increase operating
margins and profitability. The Company continually engages in discussions with
Burger King franchisees, including with respect to the potential acquisition
of the business or assets of such franchisees.
 
  The Company's key criteria when evaluating new market acquisitions are the
future opportunities for fill-in acquisitions, potential for new restaurant
development in the area, the overall attractiveness of the market from a
demographic perspective and the acquisition price relative to historical and
expected financial performance of these restaurants. Typically, key operating
personnel of acquired restaurants are retained to oversee the operation with
the added benefit of the Company's sophisticated management information
systems and other corporate resources.
 
  The Company's fill-in acquisitions typically involve smaller, local
operations in areas in, or contiguous to, the Company's existing operations.
An example of a typical fill-in acquisition is the Company's acquisition in
September 1995 of five additional restaurants in Denver, Colorado. An example
of a larger fill-in acquisition is the Company's acquisition in November 1994
of 39 additional restaurants in the Chicago market.
 
  The table below summarizes each of the Company's acquisitions, representing
175 restaurants, since its inception.
 
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                                                       NUMBER OF
      ACQUISITION                                     RESTAURANTS        TYPE OF
          DATE                   STATE                 ACQUIRED           SELLER
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     <S>                <C>                           <C>               <C>
     September 1994     Illinois/Indiana                   68           BKC
     September 1994     Texas/Colorado                     11           Management
     September 1994     Colorado                            3           Management
     November 1994      Illinois/Wisconsin                 39           Franchisee
     September 1995     Colorado                            5           Franchisee
     October 1995       Illinois                            2           BKC
     November 1995      Tennessee/Georgia                  11           Franchisee
     February 1996      Virginia/North Carolina            24           Franchisee
     February 1996      Kentucky/Ohio/Indiana              12           Franchisee
</TABLE>
 
  Achieve Operating Efficiencies. The Company's large number of restaurants,
centralized management structure and advanced management information systems
enable the Company to: (i) tightly control restaurant and corporate level
costs; (ii) capture economies of scale by leveraging its existing corporate
overhead structure; and (iii) continuously monitor point-of-sale data to more
efficiently manage its restaurant operations. The Company has experienced both
restaurant-level and corporate-level savings as a result of its size and
related
 
                                       7
<PAGE>
 
bargaining power, particularly with respect to food and paper purchasing and
distribution, restaurant maintenance services and general liability insurance.
 
  Capitalize on Strong Support from Burger King Corporation. The Company
believes that it realizes significant benefits from its affiliation with BKC
as a result of: (i) the widespread recognition of the Burger King name and
products; (ii) BKC's management of the proven, successful Burger King concept,
including new product development, quality assurance and strategic planning;
(iii) the size and market penetration of BKC's approximate $240 million annual
media budget; and (iv) the expected continued growth of the Burger King
system. During BKC's fiscal year ended September 30, 1996, a record number of
836 new restaurants were added to the Burger King system.
 
  Leverage Sophisticated Management Information System. The Company's
customized integrated management information system, REMACs, typically not
affordable by smaller Burger King franchisees and other smaller quick-service
restaurant chains, provides management with the ability to identify and
quickly capitalize on restaurant sales enhancement and profit opportunities.
The Company utilizes its management information system to: (i) minimize
shrinkage and control labor costs; (ii) efficiently schedule labor;
(iii) effectively manage inventory; (iv) analyze product mix and various
promotional programs using point-of-sale information; and (v) quickly
integrate accounting systems following acquisitions.
 
  Consistently Provide High Quality Products and Superior Customer Service. As
the number of restaurants that the Company owns in a particular market
increases, the Company has a greater ability to (i) ensure overall customer
satisfaction in that market through consistency in food quality, service and
restaurant appearance and (ii) coordinate and influence local Burger King
advertising and promotional programs and pricing policies. In addition, the
large number of restaurants that the Company owns and the corresponding
professional development opportunities permit the Company to attract and
retain strong regional, district and individual restaurant management. Most of
these managers receive significant incentive compensation based on compliance
with Burger King's restaurant operating guidelines and restaurant
profitability.
 
COMPETITION
 
  The restaurant industry is intensely competitive with respect to price,
service, location and food quality. The industry is mature and competition can
be expected to increase. The Company's Burger King restaurants compete with a
large number of national and regional restaurant chains, as well as locally-
owned restaurants offering low-priced and medium-priced food. Convenience
stores, grocery stores, delicatessens, food counters, cafeterias and other
purveyors of moderately priced and quickly prepared foods also compete with
the Company. In the Company's markets, McDonald's, Wendy's and Hardees provide
the most significant competition.
 
  McDonald's operates more restaurants than the Company in all but one of the
Company's current markets and is the Company's largest competitor. According
to publicly available information, as of December 31, 1996, the McDonald's
system comprised 21,022 restaurants and total system-wide revenues for
McDonald's for the year ended December 31, 1996 were $31.8 billion. The
Company believes that product quality and taste, name recognition, convenience
of location, speed of service, menu variety, price, and ambiance are the most
important competitive factors in the quick-service restaurant industry and
that its Burger King restaurants effectively compete in each category.
 
  The Company faces competition in its expansion plans. Potential Burger King
development and acquisition competitors include BKC, which has exercised its
right of first refusal with respect to previously proposed restaurant sales,
controls the areas in which new Burger King restaurant sites can be developed
and may impose, as a condition to its consent to any proposed acquisition or
development opportunity, conditions, limitations or other restrictions on the
Company and its activities. Other potential competitors in acquiring and
developing Burger King restaurants include other investors and existing Burger
King franchisees. The Company also competes with other quick-service
restaurant operators and developers for the most desirable site locations.
 
 
                                       8
<PAGE>
 
GOVERNMENT REGULATION
 
  The Company is subject to various Federal, state and local laws affecting
its business, including various health, sanitation, fire and safety standards.
Newly constructed or remodeled restaurants are subject to state and local
building code and zoning requirements. In connection with the remodeling and
alteration of the Company's Burger King restaurants, the Company may be
required to expend funds to meet certain Federal, state and local regulations,
including regulations requiring that remodeled or altered restaurants be
accessible to persons with disabilities. The Company is also subject to
Federal and state environmental regulations, although such regulations have
not had a material effect on the Company's operations taken as a whole.
Difficulties or failures in obtaining the required licenses or approvals could
delay or prevent the opening of a new restaurant in a particular area.
 
  The Company is also subject to the Fair Labor Standards Act and various
state laws governing such matters as minimum wage requirements, overtime and
other working conditions and citizenship requirements. A significant number of
the Company's food service personnel are paid at rates related to the Federal
minimum wage and increases in the minimum wage, including those recently
enacted by the U.S. Government, would increase the Company's labor costs.
 
  The Company is also subject to various local, state and Federal laws
regulating the discharge of pollutants into the environment. The Company
believes that it conducts its operations in substantial compliance with
applicable environmental laws and regulations. In an effort to prevent and, if
necessary, to correct environment problems, the Company conducts environmental
audits of proposed restaurant sites in order to determine whether there is any
evidence of contamination prior to purchasing or entering into a lease with
respect to such restaurant.
 
  The Company believes that it conducts its operations in substantial
compliance with applicable laws and regulations governing its operations.
 
EMPLOYEES
 
  As of December 30, 1996, the Company employed 738 full-time salaried
employees and approximately 5,515 full-time and part-time hourly employees. Of
the Company's full-time employees, 35 are involved in overseeing restaurant
operations, 474 are involved in the management of individual restaurants, and
the remainder are responsible for corporate administration. None of the
Company's employees are covered by a collective bargaining agreement. The
Company believes that the dedication of its employees is critical to its
success, and that its relations with its employees are good.
 
ITEM 2. PROPERTIES
 
  The Company currently operates all but one of its restaurants on locations
where it leases the land and the buildings. BKC is the lessor on approximately
60% of such properties, primarily as a result of the Company's initial
acquisition of Burger King restaurants from BKC. Most of the Company's leases
are coterminous with the related franchise agreements and require the Company
to pay property taxes, insurance, maintenance and other operating costs of the
properties. Generally, the terms of the leases require lease payments equal to
the greater of a fixed minimum annual rent or 8.5% of annual gross sales.
 
  Within five years of December 30, 1996, 30 of the Company's 184 current
restaurant leases are due to expire. The Company believes that it will
generally be able to renew leases at commercially reasonable rates as they
expire. During fiscal 1996, the Company renewed each of its two leases
expiring during such fiscal year on terms generally consistent with those of
the expiring leases.
 
  The Company's headquarters are located in an approximately 16,000 square
foot leased office space in Westchester, Illinois. The term of the present
lease expires on September 30, 1998. The Company believes that its existing
central office provides sufficient space to support its expected expansion
over the next several years.
 
 
                                       9
<PAGE>
 
ITEM 3. LEGAL PROCEEDINGS
 
  The Company is not a party to any pending legal proceeding the resolution of
which, the management of the Company believes, would have a material adverse
effect on the Company's results of operations or financial condition, nor to
any other pending legal proceedings other than ordinary, routine litigation
incidental to its business.
 
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
  No matters were submitted to a vote of the security holders of the Company
during the period December 3, 1996, when the Company filed its registration
statement pursuant to Rule 424(b) of the Securities Act of 1933, to
December 30, 1996.
 
                                    PART II
 
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
 
  There is no established trading market for the Company's common equity.
 
                                      10
<PAGE>
 
ITEM 6. SELECTED FINANCIAL DATA
 
  The following table sets forth certain historical financial and operating
data for the Company and restaurants formerly owned and operated by BKC (the
"BKC Restaurants") and entities controlled by certain members of the Company's
current management (the "Management Restaurants") (collectively, the "Initial
Acquisitions"). Prior to their acquisition by the Company on September 2,
1994, the BKC Restaurants and the Management Restaurants were not under common
control or management. In addition, restaurant contribution for the BKC
Restaurants and the Management Restaurants, which reflects restaurant sales
net of restaurant operating expenses, does not reflect all costs of operating
the BKC Restaurants and Management Restaurants. Accordingly, restaurant sales,
restaurant operating expenses and restaurant contribution may not be
comparable to or indicative of post-acquisition results. The data presented
for the Company as of December 31, 1994 and for the period from September 2,
1994 through December 31, 1994, and for the 1995 and 1996 fiscal years are
derived from the Company's audited financial statements appearing elsewhere
herein. The Selected Consolidated Financial Information should be read in
conjunction with (i) Item 7--Management's Discussion and Analysis of Financial
Condition and Results of Operations and (ii) Item 8--the audited Consolidated
Financial Statements of the Company and the notes thereto.
 
<TABLE>
<CAPTION>
                                THE INITIAL
                            ACQUISITIONS(1)(2)                THE COMPANY
                          ----------------------- ------------------------------------
                                  JANUARY 1, 1994
                                      THROUGH     SEPTEMBER 2, 1994
                          FISCAL   SEPTEMBER 1,   THROUGH DECEMBER   FISCAL    FISCAL
                           1993        1994          31, 1994(3)      1995      1996
                          ------- --------------- ----------------- --------  --------
                               (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S>                       <C>     <C>             <C>               <C>       <C>
STATEMENT OF OPERATIONS
 DATA:
Restaurant sales........  $82,895     $56,720          $33,931      $139,572  $203,753
Restaurant operating
 expenses:
 Cost of sales..........   25,832      18,602           10,807        44,798    66,071
 Restaurant labor and
  related costs.........   21,998      15,529            8,647        34,526    50,838
 Depreciation and
  amortization..........    2,062       1,366            1,193         4,927     7,386
 Occupancy and other
  operating expenses....   26,405      17,854            9,229        38,930    57,011
                          -------     -------          -------      --------  --------
   Total restaurant
    operating expenses..   76,297      53,351           29,876       123,181   181,306
                          -------     -------
Restaurant
 contribution...........  $ 6,598     $ 3,369
                          =======     =======
General and
 administrative
 expenses...............                                 1,374         6,039    10,067
                                                       -------      --------  --------
Operating income........                                 2,681        10,352    12,380
Other income (expense):
 Interest expense.......                                (1,925)       (8,323)  (11,983)
 Other income
  (expense), net........                                  (324)         (302)   (4,895)
                                                       -------      --------  --------
   Total other income
    (expense)...........                                (2,249)       (8,625)  (16,878)
                                                       -------      --------  --------
Income (loss) before
 extraordinary item and
 provision (benefit) for
 income taxes...........                                   432         1,727    (4,498)
Provision (benefit) for
 income taxes...........                                   191           825    (1,556)
                                                       -------      --------  --------
Income (loss) before
 extraordinary item.....                                   241           902    (2,942)
Extraordinary item--loss
 from early
 extinguishment of
 debt...................                                                        (5,055)
                                                       -------      --------  --------
Net income (loss).......                               $   241      $    902  $ (7,997)
                                                       =======      ========  ========
Preferred stock
 dividends(4)...........                               $   122      $    450  $    753
Weighted average number
 of common shares
 outstanding (in
 thousands)(5)..........                                   970           970       866
Net income per common
 share (before
 extraordinary
 item)(6)...............                               $  0.12      $   0.47  $  (4.28)
Extraordinary item(6)...                                                         (5.84)
                                                       -------      --------  --------
Net income per common
 share(6)...............                               $  0.12      $   0.47  $ (10.12)
                                                       =======      ========  ========
OTHER DATA:
EBITDA(7)...............                               $ 4,021      $ 16,142  $ 23,597
                                                       =======      ========  ========
Capital expenditures:
 Existing restaurants...                               $   239      $  1,416  $  2,424
 New restaurant
  development...........                                                 696     3,219
 Other..................                                   358         1,609     2,655
                                                       -------      --------  --------
   Total capital
    expenditures........                               $   597      $  3,721  $  8,298
                                                       =======      ========  ========
SELECTED OPERATING DATA:
Ratio of earnings to
 fixed charges(8).......                                                 1.1x
Ratio of earnings to
 fixed charges and
 preferred stock
 dividends(8)...........                                                 1.1
</TABLE>
 
                                      11
<PAGE>
 
<TABLE>
<CAPTION>
                                                      THE INITIAL ACQUISITIONS
                                                    ----------------------------
                                                                JANUARY 1, 1994
                                                      FISCAL        THROUGH
                                                       1993    SEPTEMBER 1, 1994
                                                    ---------- -----------------
                                                       (DOLLARS IN THOUSANDS)
<S>                                                 <C>        <C>
SUPPLEMENTAL OPERATING DATA(9)(10)
RESTAURANT SALES:
BKC Restaurants....................................  $ 70,667      $ 47,762
Management Restaurants:
 Jaro restaurants..................................    10,115         7,400
 Osborn restaurants................................     2,113         1,558
                                                     --------      --------
   Total for Initial Acquisitions..................  $ 82,895      $ 56,720
                                                     ========      ========
RESTAURANT OPERATING EXPENSES:
BKC Restaurants....................................  $ 65,263      $ 45,257
Management Restaurants:
 Jaro restaurants..................................     9,166         6,718
 Osborn restaurants................................     1,868         1,376
                                                     --------      --------
   Total for Initial Acquisitions..................  $ 76,297      $ 53,351
                                                     ========      ========
RESTAURANT CONTRIBUTION:
BKC Restaurants....................................  $  5,404      $  2,505
Management Restaurants:
 Jaro restaurants..................................       949           682
 Osborn restaurants................................       245           182
                                                     --------      --------
   Total for Initial Acquisitions..................  $  6,598      $  3,369
                                                     ========      ========
<CAPTION>
                                                            THE COMPANY
                                                    ----------------------------
                                                    JANUARY 1,
                                                       1996    DECEMBER 30, 1996
                                                    ---------- -----------------
                                                       (DOLLARS IN THOUSANDS)
<S>                                                 <C>        <C>
BALANCE SHEET DATA:
Cash and cash equivalents..........................  $  1,887      $  5,259
Total assets.......................................   107,236       155,037
Total debt and capitalized leases..................    90,110       108,465
Senior Preferred Stock.............................                  30,303
Total stockholders' equity.........................     8,743           433
</TABLE>
-------
 (1) The Initial Acquisitions consist of the 68 BKC Restaurants and the 14
     Management Restaurants acquired by the Company on September 2, 1994 from
     BKC and from entities formerly controlled by certain members of the
     Company's current management. The information set forth under "Initial
     Acquisitions" reflects the combined historical financial results of the
     BKC Restaurants and Management Restaurants for the indicated period
     during which time the restaurants were owned and operated by BKC and
     management-controlled entities. The results of the Initial Acquisitions
     for fiscal 1993 and the period from January 1, 1994 through September 1,
     1994 may not be reflective of the ongoing operations of the Company under
     its current ownership structure.
 (2) Due to the inability of the Company to determine certain expenses for the
     Initial Acquisitions prior to their acquisition by the Company on a
     meaningful and consistent basis, net income is not comparable and is not
     presented for the Initial Acquisitions.
 (3) Reflects the historical results of the Company, including the Initial
     Acquisitions subsequent to their acquisition by the Company on September
     2, 1994. Also includes limited expenses of the Company during the period
     August 17, 1994 (date of incorporation) to September 2, 1994, during
     which period the Company had no operations.
 (4) As of December 30, 1996, no dividends have been declared by the Company
     on either its Class A1 Preferred Stock, Class A2 Preferred Stock or Class
     B Preferred Stock (collectively the "Preferred Stock") or its 13% Senior
     Exchangeable Preferred Stock, due 2008 (the "Senior Preferred Stock"). In
     addition, no cash dividends have been declared by the Company on its
     Common Stock.
 (5) The weighted average number of common shares outstanding assumes the
     following changes to the historical number of common shares outstanding:
     (i) the 863.281-for-1 stock split of the shares of Common
 
                                      12
<PAGE>
 
    Stock pursuant to the Recapitalization, (as defined) and (ii) for all
    periods in which there is positive earnings available for the holders of
    Common Stock, the conversion of immediately exercisable warrants and
    options to purchase 106,700 shares of Common Stock and Non-Voting Common
    Stock (as defined).
 (6) Net income per common share was computed by deducting in all periods
     dividends payable (whether or not declared) to the holders of Preferred
     Stock and Senior Preferred Stock and using the weighted average number of
     shares of Common Stock outstanding.
 (7) EBITDA (as defined) represents operating income plus depreciation and
     amortization (including losses on disposal of fixed assets and provisions
     for disposition of restaurants and equipment included in occupancy and
     other operating expenses and other income (expense), net) and management
     and director's fees (included in other income (expense), net). For fiscal
     1996, $152,000 of amortization relative to new restaurant development
     start up costs was included in other operating expenses. EBITDA is
     included because the Cash Flow Coverage Ratio (each as defined in the
     Indenture and the Exchange Debenture Indenture), is calculated on a
     similar basis. See the Consolidated Statements of Operations of the
     Company and the related notes to the Consolidated Financial Statements
     thereto included herein.
 (8) For purposes of determining the ratio of earnings to fixed charges,
     earnings are defined as earnings before income taxes, plus fixed charges.
     Fixed charges consist of interest expense on all indebtedness and
     capitalized interest, amortization of deferred financing costs and rental
     expense on operating leases, representing that portion of rental expense
     deemed by the Company to be attributable to interest. For fiscal 1996,
     earnings were insufficient to cover fixed charges by approximately $4.5
     million. For fiscal 1996, earnings were insufficient to cover fixed
     charges and preferred stock dividends by approximately $4.5 million.
 (9) Sets forth for the Initial Acquisitions the components constituting
     aggregate restaurant sales, restaurant operating expenses and restaurant
     contributions for the indicated periods.
(10) Jaro restaurants consist of the 11 Management Restaurants acquired from
     entities owned or controlled by Lawrence Jaro, the Company's current
     Chief Executive Officer and Chairman of the Company's Board of Directors.
     Osborn restaurants consist of the three Management Restaurants acquired
     from entities owned or controlled by William Osborn, the current Vice
     Chairman of the Company's Board of Directors.
 
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
 
OVERVIEW
 
  The Company operates Burger King restaurants through its wholly owned
subsidiaries, each of which is a party to a BKC franchise agreement. BKC
franchise agreements require a one-time franchise fee (currently $40,000), a
monthly royalty fee of 3.5% of each restaurant's gross sales and a monthly
advertising contribution of 4.0% of gross sales. Most franchise agreements
provide for a term of 20 years, and, at the option of the franchise and BKC, a
renewal franchise agreement may be granted by BKC upon payment of the then
current franchise fee provided that the restaurant meets BKC's operating
standards applicable at that time and the franchisee is not in default under
the relevant franchise agreement. In addition, the Company has reached a
separate agreement with BKC in which the Company has committed to spend 1% of
gross sales on local advertising to supplement BKC's national advertising
activities.
 
  As the Company acquires additional Burger King restaurants, it capitalizes
the value of franchise agreements based on the number of years remaining on
the terms of the agreement and the franchise fee in effect at the time of
acquisition (currently, $40,000 over a 20 year term or $2,000 per year) and it
capitalizes excess cost over fair value of the other net assets acquired and
amortizes goodwill expense for financial statement purposes over a 35-year
period. The Company generally purchases assets and is able to deduct goodwill
amortization expense for tax purposes over a 15-year period.
 
  Restaurant sales include food sales and merchandise sales. Merchandise sales
include convenience store sales at the Company's dual-use facilities (of which
the Company currently has five), as well as sales of promotional products at
the Company's restaurants. Historically, merchandise sales have contributed
less than 3.0% to restaurant sales. Promotional products, which account for
the majority of merchandise sales, are generally sold at or near the Company's
costs.
 
 
                                      13
<PAGE>
 
  EBITDA represents operating income plus depreciation and amortization
(including losses on disposal of fixed assets and provisions for disposition of
restaurants and equipment) and management and director's fees. While EBITDA
should not be construed as a substitute for operating income or a better
indicator of liquidity than cash flow from operating activities, which are
determined in accordance with generally accepted accounting principles, EBITDA
is included to provide additional information with respect to the ability of
the Company to meet its future debt service, capital expenditure and working
capital requirements. In addition, management believes that certain investors
find EBITDA to be a useful tool for measuring the ability of the Company to
service its debt. EBITDA is not necessarily a measure of the Company's ability
to fund its cash needs. See the Consolidated Statements of Cash Flows of the
Company and the related notes to the Consolidated Financial Statements included
herein.
 
  The Company includes in the comparable restaurant sales analysis discussed
below only those restaurants that have been in operation for a minimum of
thirteen months. For a restaurant not operating for the entire prior annual
period, the sales for the interim period in the prior year are compared to that
for the comparable interim period in the indicated year.
 
  On August 1, 1995, the Company converted its fiscal year to a 52/53 week
fiscal year. Due to the conversion, the 1996 and 1995 fiscal years included 364
and 366 days of operating activity, respectively.
 
  The discussion below of the Company's operating performance for the fiscal
years 1996, 1995 and 1994 should be read in conjunction with Item 6--Selected
Financial Data contained herein.
 
FISCAL 1996 COMPARED TO FISCAL 1995
 
  Restaurant Sales. Total sales increased $64.2 million or 46.0% during fiscal
1996, to $203.8 million from $139.6 million in fiscal 1995, due primarily to
the inclusion of the 18 restaurants acquired in 1995 and the 36 restaurants
acquired in 1996. In addition, the Company developed 1 new restaurant in 1995
and 8 new restaurants in 1996. In fiscal 1996, newly acquired and newly
developed restaurants accounted for $55.3 million and $6.1 million,
respectively, of the total increase in restaurant sales. Sales at the 121
comparable restaurants owned by the Company at the end of the fiscal 1996
increased 2.0% primarily due to increases in customer traffic. Restaurant menu
prices remained stable during the period.
 
  Restaurant Operating Expenses. Total restaurant operating expenses increased
$58.1 million, or 47.2% during fiscal 1996, to $181.3 million from $123.2
million in fiscal 1995, due primarily to the inclusion of newly acquired
restaurants. As a percentage of sales, restaurant operating expenses increased
0.6% to 88.9% in fiscal 1996 from 88.3% in fiscal 1995 due to increases in
lower margin non-food sales, labor costs and local advertising costs.
 
  Cost of sales increased $21.3 million during fiscal 1996, and increased 0.3%
as a percentage of sales to 32.4% in fiscal 1996 from 32.1% in fiscal 1995. The
percentage increase in cost of sales was due to a 0.5% increase in the cost of
non-food sales offset by a 0.2% decrease on the cost of food sales. Several
restaurants acquired in 1996 included co-branded units that included
significant non-food sales.
 
  Restaurant labor and related expenses increased $16.3 million during fiscal
1996, and increased 0.3% as a percentage of restaurant sales to 25.0% in fiscal
1996 from 24.7% in fiscal 1995. The percentage increase in restaurant labor was
due to an increase in the federal minimum wage, effective October 1, 1996.
 
  Depreciation and amortization increased $2.5 million during fiscal 1996, to
$7.4 million in fiscal 1996 from $4.9 million in fiscal 1995. As a percentage
of sales, depreciation and amortization expense remained constant at 3.6% for
fiscal 1996 and fiscal 1995. The $2.5 million increase was due primarily to the
increase in goodwill amortization resulting from the purchase method of
accounting for the newly acquired restaurants.
 
                                       14
<PAGE>
 
  Occupancy and other expenses increased $18.1 million during fiscal 1996, but
remained constant as a percentage of sales at 27.9% for fiscal 1996 and fiscal
1995. Occupancy expense increased $6.0 million, but decreased 0.6% as a
percentage of sales to 10.5% in fiscal 1996 from 11.1% in fiscal 1995, due
primarily to lower effective rental rates and lower property taxes as a
percentage of sales at the Company's newly acquired restaurants. Rental rates,
as a percentage of sales, declined due to higher customer traffic at the
Company's restaurants in fiscal 1996. Other operating expenses increased $12.1
million during fiscal 1996, and increased 0.6% as a percentage of sales to
17.4% in fiscal 1996 from 16.8% for fiscal 1995. This increase is primarily due
to the accrual of an equipment disposition reserve and a 0.4% increase in local
advertising expense.
 
  EBITDA. Earnings before interest, taxes, depreciation, and amortization
("EBITDA") increased $7.5 million or 46.2% to $23.6 million for fiscal 1996
from $16.1 million for fiscal 1995. As a percentage of restaurant sales, EBITDA
remained constant at 11.6% in fiscal 1996 and in fiscal 1995.
 
  Operating Income. Operating income increased $2.0 million or 19.6% to $12.4
million for fiscal 1996 from $10.4 million for fiscal 1995. As a percentage of
sales, operating income decreased 1.2%, to 6.2% in fiscal 1996 from 7.4% for
fiscal 1995. This decrease was primarily due to the accrual for dispositions of
restaurants and restaurant equipment.
 
FISCAL 1995 COMPARED TO FISCAL 1994
 
  Restaurant Sales. Restaurant sales increased $48.9 million or 54.0% during
fiscal 1995, to $139.6 million from $90.7 million in fiscal 1994 due primarily
to the inclusion of 39 Burger King restaurants acquired in December 1994, five
Burger King restaurants acquired in September 1995, two Burger King restaurants
acquired in October 1995 and 11 Burger King restaurants acquired in November
1995. Combined, the newly acquired restaurants accounted for $46.4 million of
the total increase in restaurant sales. In addition, the Company developed one
new restaurant in August 1995. Sales at comparable restaurants for all 139
restaurants owned by the Company at the end of fiscal 1995 declined 0.1%,
primarily as a result of the discontinuation of extensive promotional couponing
at the 39 restaurants acquired in December 1994. Sales at the 82 restaurants
owned by the Company since its inception increased $2.5 million or 1.7%
primarily due to increases in customer traffic. Restaurant menu prices remained
stable during the year.
 
  Restaurant Operating Expenses. Total restaurant operating expenses increased
$40.0 million or 48.0% during fiscal 1995, to $123.2 million from $83.2 million
in fiscal 1994, due primarily to the inclusion of the 39 restaurants acquired
in December 1994, and the 18 restaurants acquired in fiscal 1995. As a
percentage of restaurant sales, restaurant operating expenses declined 3.5% to
88.3% in fiscal 1995 from 91.8% in fiscal 1994, due primarily to decreases in
food and paper costs, insurance costs and rents.
 
  Cost of sales increased $15.4 million during fiscal 1995, but decreased 0.3%
as a percentage of restaurant sales to 32.1% in fiscal 1995 from 32.4% in
fiscal 1994 due primarily to a 1.0% decline in food and paper costs as a
percentage of restaurant sales created by improved distribution efficiencies
from restaurant acquisitions. This decline was partially offset by a 0.7%
increase in the cost of promotional merchandise.
 
  Restaurant labor and related expenses increased $10.4 million during fiscal
1995, but remained constant as a percentage of restaurant sales at 26.7% in
fiscal 1995 and fiscal 1994. Increases in restaurant labor and related expenses
in the early part of fiscal 1995 were offset by improvements in group insurance
costs being applied over the larger restaurant base and, the successful
application of the Company's information systems technology within the
restaurant base. These improvements increased scheduling efficiency and further
reduced labor costs as a percentage of restaurant sales.
 
  Depreciation and amortization increased $2.4 million during fiscal 1995, to
$4.9 million in fiscal 1995 from $2.5 million in fiscal 1994. As a percentage
of restaurant sales, depreciation and amortization expense increased 0.8% to
3.6% in fiscal 1995 from 2.8% in fiscal 1994, due primarily to the increase in
goodwill amortization resulting from the purchase method of accounting for the
newly acquired restaurants.
 
 
                                       15
<PAGE>
 
  Occupancy and other expenses increased $11.8 million during fiscal 1995, but
decreased 2.0% as a percentage of restaurant sales to 27.9% in fiscal 1995 from
29.9% in fiscal 1994. Occupancy expense increased $4.5 million, but decreased
1.0% as a percentage of sales to 11.1% in fiscal 1995 from 12.1% in fiscal
1994, due primarily to the negotiation of more favorable lease terms under the
Company's existing lease agreements. Other operating expenses increased $7.3
million during fiscal 1995, but decreased 1.0% as a percentage of restaurant
sales to 16.8% in fiscal 1995 from 17.8% in fiscal 1994, due primarily to the
result of more favorable terms negotiated for general liability insurance
policies covering the Company's larger restaurant base.
 
LIQUIDITY AND CAPITAL RESOURCES
 
  The Company's primary cash requirements following its concurrent offerings
(together, the "Offerings") of $100.0 million of 10 3/4% Senior Notes due 2006
(the "Senior Notes") and $30.0 million of units (the "Units") consisting of 1.2
million shares of Senior Preferred Stock and 30,000 shares of Common Stock will
be used to finance additional acquisitions, capital expenditures in connection
with the development of new restaurants, upgrades of acquired and existing
restaurants and general working capital needs. The Company has budgeted
approximately $355,000 for the development of each of its new restaurants. The
Company anticipates it will spend approximately an additional $3.0 to $5.0
million annually for other capital expenditures. In connection with certain of
its previous acquisitions of Burger King restaurants, the Company committed to
expend up to $2.3 million by September 1, 1997 to upgrade the initial 68 Burger
King restaurants it acquired. The Company has met this commitment. In addition,
the Company has committed to BKC that it will make capital expenditures at its
AmeriKing Tennessee Corporation I restaurants of approximately $1.5 million on
or before September 7, 1997, of which approximately half had been made as of
December 30, 1996. The Company has further committed to BKC that for the
foreseeable future (i) it will make capital expenditures on its existing
restaurants equal to 1% of its gross sales and (ii) it will spend an amount
equal to 1% of its gross sales on local advertising. The Company has also
committed to BKC that it will develop 17 restaurants in fiscal 1997. In the
event the Company fails to develop at least 14 restaurants in fiscal 1997, the
Company will pay BKC $150,000. In addition to the extent the Company develops
13 or fewer restaurants in fiscal 1997, the Company will be obligated to pay
BKC $75,000 for each restaurant less than 14 it fails to develop. The actual
amount of the Company's cash requirements for capital expenditures depends on,
among other things, the number of new restaurants opened or acquired and the
costs associated with such restaurants and the number of franchises subject to
renewal and the costs associated with bringing the related restaurants up to
BKC's then current design specifications in connection with these franchise
renewals.
 
  The Company is structured as a holding company with no independent
operations, as the Company's operations are conducted exclusively through its
wholly owned subsidiaries. The Company's only significant assets are the
capital stock of its subsidiaries. As a holding company, the Company's cash
flow, its ability to meet its debt service requirements and its ability to pay
cash dividends on the Senior Preferred Stock are dependent upon the earnings of
its subsidiaries and their ability to declare dividends or make other
intercompany transfers to the Company. Under the terms of the indenture
pursuant to which the Senior Notes were offered (the "Indenture"), the
Company's subsidiaries may incur certain indebtedness pursuant to agreements
that may restrict the ability of such subsidiaries to make such dividends or
other intercompany transfers necessary to service the Company's obligations,
including its obligations under the Senior Notes, the Senior Preferred Stock
and any 13% Subordinated Exchange Debentures due 2008 (the "Exchange
Debentures") the Company may exchange pursuant to the Indenture. The Indenture
restricts, among other things, the Company's and its Restricted Subsidiaries'
(as defined in the Indenture) ability to pay dividends or make certain other
restricted payments, including the payment of cash dividends on or the
redemption of the Senior Preferred Stock, to incur additional indebtedness, to
encumber or sell assets, to enter into transactions with affiliates, to enter
into certain guarantees of indebtedness, to make restricted investments, to
merge or consolidate with any other entity and to transfer or lease all or
substantially all of their assets. In addition, (i) the Company's Amended and
Restated Credit Agreement (as defined) with the First National Bank of Boston
and other lenders thereto contains other and more restrictive covenants and
prohibits the Company's subsidiaries from declaring dividends or making other
intercompany transfers to the Company in certain circumstances and (ii)
agreements reached with BKC contain restrictions with respect to dividend
payments and intercompany loans.
 
                                       16
<PAGE>
 
  The Company believes that the proceeds from its Offerings, together with its
available credit of $15.0 million under its Amended and Restated Credit
Agreement and the Company's cash on hand, will be sufficient to cover its
working capital, capital expenditures, planned development and debt service
requirements for fiscal 1997. The Company expects that additional financing
will be required in connection with any significant acquisitions in the future.
 
INCOME TAXES
 
  The Company completed fiscal 1996 with a net operating loss carry-forward for
tax purposes of approximately $25.8 million. Substantially all of the Company's
acquisitions completed to date have been structured as asset purchases. As a
result, the Company is able to deduct goodwill amortization expense for income
tax purposes over a 15 year period. The Company has not been a cash taxpayer
since its inception.
 
EXTRAORDINARY LOSS
 
  In connection with the prepayment of its subordinated debt and repayment of
borrowings under its credit agreement, the Company recorded an extraordinary
loss of approximately $5.1 million, net of taxes, reflecting a prepayment
penalty, as well as the write-off of deferred financing costs.
 
                                       17
<PAGE>
 
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 
     INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS OF AMERIKING, INC. AND
                                   SUBSIDIARY
 
<TABLE>
<CAPTION>
                                                                            PAGE
                                                                            ----
<S>                                                                         <C>
Independent Auditors' Report..............................................   19
Consolidated Balance Sheets as of December 30, 1996 and January 1, 1996...   20
Consolidated Statements of Operations for the fiscal years ended December
 30, 1996 and January 1, 1996 and the period August 17, 1994 (Date of
 Incorporation) to December 31, 1994......................................   21
Consolidated Statements of Stockholders' Equity for the fiscal years ended
 December 30, 1996 and January 1, 1996 and the period August 17, 1994
 (Date of Incorporation) to December 31, 1994.............................   22
Consolidated Statements of Cash Flows for the fiscal years ended December
 30, 1996 and January 1, 1996 and the period August 17, 1994 (Date of
 Incorporation) to December 31, 1994......................................   23
Notes to Consolidated Financial Statements................................   24
</TABLE>
 
                                       18
<PAGE>
 
                         INDEPENDENT AUDITORS' REPORT
 
To the Board of Directors of
AmeriKing, Inc.
Westchester, Illinois
 
  We have audited the accompanying consolidated balance sheets of AmeriKing,
Inc. and subsidiary as of December 30, 1996 and January 1, 1996, and the
related consolidated statements of operations, stockholders' equity and cash
flows for the fiscal years ended December 30, 1996 and January 1, 1996 and the
period August 17, 1994 (date of incorporation) to December 31, 1994. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
 
  We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
 
  In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of AmeriKing, Inc. and
subsidiary as of December 30, 1996 and January 1, 1996, and the results of
their operations and their cash flows for the fiscal years ended December 30,
1996 and January 1, 1996 and the period August 17, 1994 (date of
incorporation) to December 31, 1994 in conformity with generally accepted
accounting principles.
 
Deloitte & Touche LLP
 
Chicago, Illinois
February 26, 1997 (March 20,
 1997 as to Note 15)
 
                                      19
<PAGE>
 
                         AMERIKING, INC. AND SUBSIDIARY
 
                          CONSOLIDATED BALANCE SHEETS
                     DECEMBER 30, 1996 AND JANUARY 1, 1996
 
<TABLE>
<CAPTION>
                                       DECEMBER 30,   JANUARY 1,
                                           1996          1996
                                       ------------  ------------
 <S>                                   <C>           <C>          <C> <C> <C> <C>
                ASSETS
 CURRENT ASSETS:
   Cash and cash equivalents.........  $  5,259,000  $  1,887,000
   Accounts receivable...............       828,000     1,118,000
   Inventories.......................     1,667,000     1,009,000
   Prepaid expenses..................     1,338,000     1,218,000
   Current portion of deferred income
    taxes (Note 9)...................       438,000
                                       ------------  ------------
     Total current assets............     9,530,000     5,232,000
 PROPERTY AND EQUIPMENT (Note 4).....    36,765,000    28,457,000
 GOODWILL............................    94,324,000    66,847,000
 DEFERRED INCOME TAXES (Note 9)......     3,426,000
 OTHER ASSETS:
   Deferred financing costs..........     6,577,000     3,096,000
   Deferred organization costs.......       170,000       220,000
   Franchise agreements..............     4,245,000     3,384,000
                                       ------------  ------------
     Total other assets..............    10,992,000     6,700,000
                                       ------------  ------------
 TOTAL...............................  $155,037,000  $107,236,000
                                       ============  ============
 LIABILITIES, SENIOR PREFERRED STOCK
       AND STOCKHOLDERS' EQUITY
 CURRENT LIABILITIES:
   Accounts payable and other accrued
    expenses.........................  $ 10,333,000  $  5,399,000
   Accrued payroll...................     3,571,000       802,000
   Accrued sales tax payable.........     1,021,000     1,047,000
   Accrued interest payable..........       911,000       346,000
   Current portion of long-term debt
    (Note 5).........................       525,000    10,741,000
   Current portion of capital leases
    (Note 7).........................       110,000        99,000
                                       ------------  ------------
     Total current liabilities.......    16,471,000    18,434,000
 LONG-TERM DEBT--Less current portion
  (Note 5)...........................   107,167,000    63,094,000
 LONG-TERM DEBT--Related parties
  (Note 5)...........................       600,000    16,000,000
 OTHER LONG-TERM LIABILITIES (Note
  7).................................        63,000       176,000
 DEFERRED INCOME TAXES (Note 9)......                     789,000
                                       ------------  ------------
     Total liabilities...............   124,301,000    98,493,000
                                       ------------  ------------
 SENIOR PREFERRED STOCK (Note 6).....    30,303,000
 STOCKHOLDERS' EQUITY:
   Preferred stock...................            75            75
   Common stock......................         8,933            10
   Additional paid-in capital........     7,277,992     7,599,915
   Retained earnings (deficit).......    (6,854,000)    1,143,000
                                       ------------  ------------
     Total stockholders' equity......       433,000     8,743,000
                                       ------------  ------------
 TOTAL...............................  $155,037,000  $107,236,000
                                       ============  ============
</TABLE>
 
                See notes to consolidated financial statements.
 
                                       20
<PAGE>
 
                         AMERIKING, INC. AND SUBSIDIARY
 
                     CONSOLIDATED STATEMENTS OF OPERATIONS
      FOR THE FISCAL YEARS ENDED DECEMBER 30, 1996 AND JANUARY 1, 1996 AND
    THE PERIOD AUGUST 17, 1994 (DATE OF INCORPORATION) TO DECEMBER 31, 1994
 
<TABLE>
<CAPTION>
                                                                      AUGUST 17,
                                                                       1994 TO
                             FISCAL     % OF       FISCAL     % OF   DECEMBER 31,  % OF
                              1996      SALES       1995      SALES      1994      SALES
                          ------------  -----   ------------  -----  ------------  -----
<S>                       <C>           <C>     <C>           <C>    <C>           <C>
SALES
 Restaurant food sales..  $197,931,000   97.1%  $136,461,000   97.8% $33,088,000    97.5%
 Non-food sales.........     5,822,000    2.9      3,111,000    2.2      843,000     2.5
                          ------------  -----   ------------  -----  -----------   -----
 Total sales............   203,753,000  100.0    139,572,000  100.0   33,931,000   100.0
RESTAURANT OPERATING
 EXPENSES:
 Cost of food sales.....    60,576,000   29.7     41,671,000   29.9   10,016,000    29.5
 Cost of non-food
  sales.................     5,495,000    2.7      3,127,000    2.2      791,000     2.3
 Restaurant labor and
  related costs.........    50,838,000   25.0     34,526,000   24.7    8,647,000    25.5
 Occupancy..............    21,488,000   10.5     15,454,000   11.1    3,768,000    11.1
 Depreciation and
  amortization of
  goodwill and franchise
  agreements............     7,386,000    3.6      4,927,000    3.6    1,193,000     3.5
 Advertising............    10,072,000    4.9      6,330,000    4.5    1,449,000     4.3
 Royalties..............     6,943,000    3.4      4,788,000    3.4    1,162,000     3.4
 Provision for
  disposition of
  equipment (Note 12)...       943,000    0.5
 Other operating
  expenses..............    17,565,000    8.6     12,358,000    8.9    2,850,000     8.4
                          ------------  -----   ------------  -----  -----------   -----
 Total restaurant
  operating expenses....   181,306,000   88.9    123,181,000   88.3   29,876,000    88.0
GENERAL AND
 ADMINISTRATIVE
 EXPENSES...............     7,331,000    3.6      5,176,000    3.7    1,227,000     3.6
OTHER OPERATING
 EXPENSES:
 Depreciation expense--
  office................       444,000    0.2        199,000    0.1       15,000     0.1
 Provision for
  disposition of
  restaurants (Note
  12)...................     1,287,000    0.6        135,000    0.1
 Loss on disposal of
  fixed assets..........       341,000    0.2
 Management and
  directors' fees.......       664,000    0.3        529,000    0.4      132,000     0.4
                          ------------  -----   ------------  -----  -----------   -----
 Total other operating
  expenses..............     2,736,000    1.3        863,000    0.6      147,000     0.5
                          ------------  -----   ------------  -----  -----------   -----
OPERATING INCOME........    12,380,000    6.2     10,352,000    7.4    2,681,000     7.9
OTHER INCOME (EXPENSE):
 Interest expense.......   (10,139,000)  (5.0)    (6,296,000)  (4.4)  (1,256,000)   (3.7)
 Interest expense--
  related party.........    (1,844,000)  (0.9)    (2,027,000)  (1.5)    (669,000)   (2.0)
 Amortization of
  deferred costs........      (943,000)  (0.5)      (511,000)  (0.4)    (104,000)   (0.3)
 Other income
  (expense)--net (Note
  12)...................    (3,952,000)  (2.0)       209,000    0.1     (220,000)   (0.6)
                          ------------  -----   ------------  -----  -----------   -----
 Total other expense....   (16,878,000)  (8.4)    (8,625,000)  (6.2)  (2,249,000)   (6.6)
                          ------------  -----   ------------  -----  -----------   -----
INCOME (LOSS) BEFORE
 EXTRAORDINARY ITEM AND
 PROVISION FOR INCOME
 TAXES..................    (4,498,000)  (2.2)     1,727,000    1.2      432,000     1.3
PROVISION (BENEFIT) FOR
 INCOME TAXES...........    (1,556,000)  (0.8)       825,000    0.6      191,000     0.6
                          ------------  -----   ------------  -----  -----------   -----
INCOME (LOSS) BEFORE
 EXTRAORDINARY ITEM.....    (2,942,000)  (1.4)       902,000    0.6      241,000     0.7
EXTRAORDINARY ITEM--LOSS
 FROM EARLY
 EXTINGUISHMENT OF DEBT
 (Net of taxes of
 $3,301,000) (Note 13)..    (5,055,000)  (2.6)
                          ------------  -----   ------------  -----  -----------   -----
NET INCOME (LOSS).......  $ (7,997,000)  (4.0)% $    902,000    0.6% $   241,000     0.8%
                          ============  =====   ============  =====  ===========   =====
PREFERRED STOCK
 DIVIDENDS (cumulative,
 undeclared)............  $    753,000          $    450,000         $   122,000
                          ============          ============         ===========
WEIGHTED AVERAGE NUMBER
 OF SHARES OUTSTANDING..       865,590               969,990             969,990
NET INCOME (LOSS) PER
 COMMON SHARE (Note 8)
 Income before
  extraordinary item....  $      (4.28)         $       0.47         $      0.12
 Extraordinary item.....         (5.84)
                          ------------          ------------         -----------
NET INCOME (LOSS) PER
 COMMON SHARE...........  $     (10.12)         $       0.47         $      0.12
                          ============          ============         ===========
</TABLE>
 
                See notes to consolidated financial statements.
 
                                       21
<PAGE>
 
                         AMERIKING, INC. AND SUBSIDIARY
 
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
      FOR THE FISCAL YEARS ENDED DECEMBER 30, 1996 AND JANUARY 1, 1996 AND
    THE PERIOD AUGUST 17, 1994 (DATE OF INCORPORATION) TO DECEMBER 31, 1994
 
<TABLE>
<CAPTION>
                                          ADDITIONAL   RETAINED
                         PREFERRED COMMON  PAID-IN     EARNINGS
                           STOCK   STOCK   CAPITAL     (DEFICIT)      TOTAL
                         --------- ------ ----------  -----------  -----------
<S>                      <C>       <C>    <C>         <C>          <C>
INITIAL ISSUANCE OF
 STOCK..................    $56    $   10 $5,699,934               $ 5,700,000
  Issuance of preferred
   stock................     19            1,899,981                 1,900,000
  Net income............                              $   241,000      241,000
                            ---    ------ ----------  -----------  -----------
BALANCE--December 31,
 1994...................     75        10  7,599,915      241,000    7,841,000
  Net income............                                  902,000      902,000
                            ---    ------ ----------  -----------  -----------
BALANCE--January 1,
 1996...................     75        10  7,599,915    1,143,000    8,743,000
  Dividends on senior
   preferred stock......                    (303,000)                 (303,000)
  Amortization of senior
   preferred stock
   issuance costs.......                     (10,000)                  (10,000)
  Recapitalization of
   common stock.........            8,923     (8,923)
  Net loss..............                               (7,997,000)  (7,997,000)
                            ---    ------ ----------  -----------  -----------
BALANCE--December 30,
 1996...................    $75    $8,933 $7,277,992  $(6,854,000) $   433,000
                            ===    ====== ==========  ===========  ===========
</TABLE>
 
                See notes to consolidated financial statements.
 
                                       22
<PAGE>
 
                         AMERIKING, INC. AND SUBSIDIARY
 
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
      FOR THE FISCAL YEARS ENDED DECEMBER 30, 1996 AND JANUARY 1, 1996 AND
    THE PERIOD AUGUST 17, 1994 (DATE OF INCORPORATION) TO DECEMBER 31, 1994
 
<TABLE>
<CAPTION>
                                                             AUGUST 17, 1994 TO
                                 FISCAL 1996   FISCAL 1995   DECEMBER 31, 1994
                                -------------  ------------  ------------------
<S>                             <C>            <C>           <C>
CASH FLOWS FROM OPERATING
 ACTIVITIES:
Net income (loss).............. $  (7,997,000) $    902,000     $    241,000
 Adjustments to reconcile net
  income (loss) to net cash
  flows
  from operating activities:
 Depreciation and
  amortization.................     8,773,000     5,637,000        1,311,000
 Deferred income taxes.........    (4,653,000)      535,000          171,000
 Provision for disposition of
  equipment....................       943,000
 Loss on disposition of
  equipment....................       341,000
 Extraordinary loss on early
  extinguishment of debt.......     8,356,000
 Unrealized loss on property
  and equipment................     1,287,000       135,000
 Changes in:
  Accounts receivable..........       290,000      (984,000)        (134,000)
  Inventories..................      (658,000)       (8,000)      (1,001,000)
  Prepaid expenses.............      (120,000)     (443,000)        (775,000)
  Accounts payable and accrued
   expenses....................     8,241,000    (1,601,000)       7,845,000
                                -------------  ------------     ------------
   Net cash flows from
    operating activities.......    14,803,000     4,173,000        7,658,000
CASH FLOWS FROM INVESTING
 ACTIVITIES:
 Purchase of restaurant
  franchise agreements,
  equipment and goodwill.......   (39,245,000)  (11,305,000)     (81,671,000)
 Proceeds from sale of
  property.....................       817,000
 Cash paid for organization
  costs........................                      (6,000)        (290,000)
 Cash paid for franchise
  agreements...................      (330,000)      (60,000)
 Cash paid for property and
  equipment....................    (8,298,000)   (3,721,000)        (597,000)
                                -------------  ------------     ------------
   Net cash flows from
    investing activities.......   (47,056,000)  (15,092,000)     (82,558,000)
CASH FLOWS FROM FINANCING
 ACTIVITIES:
 Issuance of senior preferred
  stock........................    30,000,000
 Issuance of senior
  subordinated notes...........   100,000,000
 Issuance of preferred stock...                                    5,900,000
 Issuance of common stock......                                       71,000
 Proceeds from short-term
  debt.........................                   6,920,000
 Proceeds from long-term
  debt.........................    26,300,000     1,865,000       68,500,000
 Proceeds from subordinated
  debt--related party..........    15,000,000                     11,600,000
 Cash paid for financing
  costs........................    (9,280,000)     (135,000)      (3,521,000)
 Cash paid for penalties
  related to early
  extinguishment of debt.......    (3,450,000)
 Advances under line of
  credit.......................     5,800,000     2,000,000        3,500,000
 Payments on line of credit....    (5,800,000)   (2,000,000)      (3,500,000)
 Payments on long-term debt....  (122,843,000)   (3,450,000)
 Payments on capital leases....      (102,000)      (44,000)
                                -------------  ------------     ------------
   Net cash flows from
    financing activities.......    35,625,000     5,156,000       82,550,000
                                -------------  ------------     ------------
NET CHANGE IN CASH AND CASH
 EQUIVALENTS...................     3,372,000    (5,763,000)       7,650,000
CASH AND CASH EQUIVALENTS--
 Beginning of period...........     1,887,000     7,650,000
                                -------------  ------------     ------------
CASH AND CASH EQUIVALENTS--End
 of period..................... $   5,259,000  $  1,887,000     $  7,650,000
                                =============  ============     ============
SUPPLEMENTAL DISCLOSURES OF
 CASH FLOW INFORMATION:
 Cash paid during the period
  for interest................. $   9,283,000  $  6,671,000     $    884,000
 Cash paid during the period
  for interest-related party...     2,135,000     2,347,000
                                -------------  ------------     ------------
 Total cash paid during the
  period for interest.......... $  11,418,000  $  9,018,000     $    884,000
                                =============  ============     ============
SUPPLEMENTAL DISCLOSURE OF
 NONCASH INVESTING
 AND FINANCING ACTIVITIES:
On September 1, 1994, in
 connection with its initial
 capitalization, the Company
 received noncash consideration
 from certain members of the
 Company's management for its
 issuance of:
 Preferred stock (including
  additional paid-in
  capital).....................                                 $  1,600,000
 Common stock (including
  additional paid-in
  capital).....................                                       29,000
 Subordinated debt--related
  party........................                                    4,400,000
Senior preferred stock
 dividends (cumulative, non-
 declared)..................... $     303,000
New capital leases.............                $    319,000
                                -------------  ------------     ------------
 TOTAL......................... $     303,000  $    319,000     $  6,029,000
                                =============  ============     ============
On September 1, 1994, in
 connection with the purchase
 of restaurant franchises from
 BKC, the Company received a
 purchase price allowance for
 deferred maintenance which was
 recorded as other accrued
 expenses......................                                 $  1,350,000
                                                                ============
</TABLE>
 
                See notes to consolidated financial statements.
 
                                       23
<PAGE>
 
                        AMERIKING, INC. AND SUBSIDIARY
 
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
     FOR THE FISCAL YEARS ENDED DECEMBER 30, 1996 AND JANUARY 1, 1996 AND
    THE PERIOD AUGUST 17, 1994 (DATE OF INCORPORATION) TO DECEMBER 31, 1994
 
1. DESCRIPTION OF BUSINESS
 
  AmeriKing, Inc., and its wholly owned subsidiary, National Restaurant
Enterprises, Inc. d/b/a AmeriKing Corporation ("Enterprises" and collectively
with its parent, the "Company"), were formed on August 17, 1994 to acquire and
operate Burger King restaurants in five states (Illinois, Indiana, Colorado,
Texas and Wisconsin) and to grow through the development and acquisition of
additional Burger King restaurants in these and other states.
 
  Effective September 2, 1994, the Company acquired 68 Burger King restaurants
(the "BKC Restaurants") located in the Chicago metropolitan area from Burger
King Corporation ("BKC") for $41.5 million in cash (excluding transaction fees
and expenses) and 14 Burger King restaurants in Colorado and Texas from
certain members of the Company's management (the "Management Restaurants") for
$6.0 million of subordinated debt and preferred and common stock in the
Company and $2.0 million in cash.
 
  Effective December 1, 1994, the Company acquired an additional 39 Burger
King restaurants in the Chicago metropolitan area from a third party
franchisee (the "Franchise Restaurants") for $37.0 million in cash.
 
  During fiscal 1995, the Company, in a series of transactions, acquired 18
Burger King restaurants in Colorado, Texas, Tennessee and Georgia (the "1995
Acquisitions") for $10.8 million in cash and developed one Burger King
restaurant in Texas.
 
  During fiscal 1996, the Company, in a series of transactions, acquired 36
Burger King restaurants in Virginia, North Carolina and the Cincinnati
metropolitan area (the "1996 Acquisitions") for $36.9 million in cash,
excluding transaction fees and expenses. In addition, the Company developed
eight Burger King restaurants in fiscal 1996, primarily in the Chicago
metropolitan area.
 
  As a result of these acquisitions and developments, the Company is one of
the largest independent Burger King franchisees in the United States,
operating 184 Burger King restaurants as of December 30, 1996.
 
  ORGANIZATIONAL STRUCTURE--At December 30, 1996, the Enterprises had five
wholly owned subsidiaries: AmeriKing Colorado Corporation I, AmeriKing
Illinois Corporation I, AmeriKing Tennessee Corporation I, AmeriKing
Cincinnati Corporation I and AmeriKing Virginia Corporation I.
 
2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
  FISCAL YEAR--In 1995, the Company converted its fiscal year to a 52/53-week
fiscal year. Due to this conversion, the 1996 fiscal year ended December 30,
1996 included 364 days of operating activity. The 1995 fiscal year ended
January 1, 1996 and the period August 17, 1994 (date of incorporation) to
December 31, 1994 included 366 and 136 days, respectively, of operating
activity.
 
  USE OF ESTIMATES--The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
 
  PRINCIPLES OF CONSOLIDATION--The accompanying consolidated financial
statements include the accounts of AmeriKing, Inc. and each of Enterprises'
five wholly owned subsidiaries. All significant intercompany accounts and
transactions have been eliminated in consolidation.
 
                                      24
<PAGE>
 
                        AMERIKING, INC. AND SUBSIDIARY
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
 
  CASH EQUIVALENTS--The Company considers all highly liquid debt instruments
purchased with a maturity of three months or less to be cash equivalents.
 
  INVENTORIES--Inventories consist primarily of restaurant food and supplies
and are stated at the lower of cost or market. Cost is determined using the
first-in, first-out (FIFO) method.
 
  PROPERTY AND EQUIPMENT--Property and equipment are stated at cost. Normal
repairs and maintenance costs are charged to expense as incurred. Depreciation
is being recorded using the straight-line method over the following estimated
useful lives:
 
<TABLE>
        <S>                             <C>
        Restaurant equipment and
         furnishings................... 5-15 years
        Office furniture and
         equipment..................... 5-9 years
        Buildings...................... 40 years
        Leasehold improvement.......... Life of lease
</TABLE>
 
  FRANCHISE AGREEMENTS--The franchise agreements with BKC require the Company
to pay a franchise fee for each new restaurant developed and for the renewal
of franchises that have expired. Franchisee fees are capitalized and amortized
using the straight-line method over the terms of the related franchise
agreements. The franchise agreements generally provide for a term of 20 years
with renewal options upon expiration. Accumulated amortization as of December
30, 1996 and January 1, 1996 was approximately $663,000 and $309,000,
respectively.
 
  GOODWILL--Goodwill represents the excess of cost over fair value of net
assets acquired in connection with the Company's acquisitions described in
Note 1. Goodwill is amortized over 35 years using the straight-line method.
Accumulated amortization of goodwill as of December 30, 1996 and January 1,
1996 was approximately $4,978,000 and $2,203,000, respectively.
 
  DEFERRED COSTS--Costs associated with the organization of the Company are
being amortized on a straight-line basis over five years. Costs incurred by
the Company in obtaining its financing for its acquisitions are being
amortized on a straight-line basis over the term of the related financing.
Accumulated amortization as of December 30, 1996 and January 1, 1996 was
approximately $136,000 and $76,000, respectively, for deferred organization
costs and approximately $8,000 and $569,000, respectively, for deferred
financing costs.
 
  NET INCOME (LOSS) PER COMMON SHARE--Net income per share was computed by
deducting from the Company's net income dividends payable to the holders of
Class A1, Class A2 and Class B Preferred Stock (collectively, the "Preferred
Stock") and 13% Senior Exchangeable Preferred Stock due 2008, (the "Senior
Preferred Stock"), and amortization of the issuance costs on the Senior
Preferred Stock and using the weighted average number of common stock of the
Company (the "Common Stock"), and common stock equivalent shares outstanding
on a post-split basis.
 
  RECLASSIFICATIONS--Certain information in the consolidated financial
statements for fiscal 1996 has been reclassified to conform with the current
reporting format.
 
  PRO FORMA OPERATING RESULTS (UNAUDITED)--The following are the pro forma
operating results for the fiscal years ended December 30, 1996 and January 1,
1996 as if the acquisitions by the Company described above had occurred on
January 1, 1995. The pro forma results give effect to changes in depreciation
and amortization resulting from valuing property and franchise agreements at
their estimated fair value and recording the excess of purchase price over the
net assets acquired (000's omitted):
 
<TABLE>
<CAPTION>
                                                         FISCAL 1996 FISCAL 1995
                                                         ----------- -----------
   <S>                                                   <C>         <C>
   Net Sales............................................  $207,207    $195,692
   Restaurant contribution..............................    22,646      23,639
</TABLE>
 
 
                                      25
<PAGE>
 
                        AMERIKING, INC. AND SUBSIDIARY
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
  The pro forma results of operations are not necessarily indicative of the
actual operating results that would have occurred had the acquisitions been
consummated at the beginning of the respective periods.
 
  NEW STATEMENTS OF FINANCIAL ACCOUNTING STANDARDS--During 1996, the Company
adopted SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and
Long-Lived Assets to be Disposed Of." (See Note 12 for a discussion of the
adoption of SFAS No. 121 relating to forced dispositions.)
 
3. FRANCHISE AGREEMENTS
 
  In connection with the acquisition and development of Burger King
restaurants, the Company is obligated to enter into franchise agreements with
BKC. The franchise agreements set forth the terms under which the Company is
to operate its Burger King restaurants and obligates the Company to pay
monthly royalty and advertising fees equal to 3.5% and 4.0%, respectively, of
restaurant sales.
 
4. PROPERTY AND EQUIPMENT
 
  Property and equipment consist of the following:
 
<TABLE>
<CAPTION>
                                                       DECEMBER 30, JANUARY 1,
                                                           1996        1996
                                                       ------------ -----------
   <S>                                                 <C>          <C>
   Restaurant equipment and furnishings............... $39,261,000  $28,020,000
   Office furniture and equipment.....................   2,945,000    1,941,000
   Leasehold improvements.............................   3,196,000    1,069,000
   Land...............................................     330,000      423,000
   Buildings..........................................     756,000      850,000
                                                       -----------  -----------
     Total............................................  46,488,000   32,303,000
   Less accumulated depreciation......................   9,723,000    3,846,000
                                                       -----------  -----------
     Property and equipment -- net.................... $36,765,000  $28,457,000
                                                       ===========  ===========
</TABLE>
 
5. LONG-TERM DEBT
 
  Debt consists of the following:
 
<TABLE>
<CAPTION>
                                    DECEMBER 30, 1996       JANUARY 1, 1996
                                  --------------------- -----------------------
                                  CURRENT   LONG-TERM     CURRENT    LONG-TERM
                                  -------- ------------ ----------- -----------
<S>                               <C>      <C>          <C>         <C>
Senior Notes, 10.75%, due 2006..           $100,000,000
Franchise Acceptance Corporation
 Limited Note, 9.86%, due 2006..  $393,000    5,554,000
Franchise Acceptance Corporation
 Limited Note,
 at a variable interest rate,
 8.17% at
 December 30, 1996, due 2005....   132,000    1,613,000 $   121,000 $ 1,744,000
Term Loan A, at a variable
 interest rate, 8.687%
 at January 1, 1996, due 2001...                          3,500,000  41,750,000
Term Loan B, at a variable
 interest rate, 9.187%
 at January 1, 1996, due 2002...                            200,000  19,600,000
Burger King Corporation Note,
 9.75%, due 1996................                          6,920,000
                                  -------- ------------ ----------- -----------
  Total.........................  $525,000 $107,167,000 $10,741,000 $63,094,000
                                  ======== ============ =========== ===========
</TABLE>
 
 
                                      26
<PAGE>
 
                        AMERIKING, INC. AND SUBSIDIARY
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
  Debt to related parties consists of the following:
 
<TABLE>
<CAPTION>
                                       DECEMBER 30, 1996      JANUARY 1, 1996
                                       -------------------- -------------------
                                       CURRENT  LONG-TERM   CURRENT  LONG-TERM
                                       -------------------- ------- -----------
<S>                                    <C>      <C>         <C>     <C>
Subordinated Notes, 12.75%, due
 2005................................                               $11,000,000
Seller Notes, 12.75%, due 2005.......                                 4,400,000
Junior Subordinated Notes, 6.00%, due
 2005................................           $   600,000             600,000
                                                -----------         -----------
  Total..............................           $   600,000         $16,000,000
                                                ===========         ===========
</TABLE>
 
  On September 1, 1994, the Company entered into a revolving credit and loan
agreement (the "Credit Agreement") with The First National Bank of Boston
("FNBB"). Under the Credit Agreement, FNBB and the other lenders committed to
lend the Company up to $35.0 million under two credit facilities: a term loan
of $29.0 million and a revolving credit facility of $6.0 million. $35.0
million was borrowed under the Credit Agreement to finance the acquisition of
the BKC Restaurants and the Management Restaurants.
 
  In addition, on September 1, 1994, the Company issued subordinated notes in
the aggregate principal amount of $11.0 million (the "Subordinated Notes") to
MCIT PLC and subordinated notes in the aggregate principal amount of $4.4
million (the "Seller Notes") to certain members of the Company's management.
The Subordinated Notes were used to finance the acquisition of BKC Restaurants
and the Seller Notes were used to finance the acquisition of the Management
Restaurants.
 
  On November 30, 1994, the Credit Agreement was amended and restated (the
"Amended Credit Agreement") to provide for three credit facilities: a term
loan of $48.5 million ("Term Loan A"), a term loan of $20.0 million ("Term
Loan B" and collectively, with Term Loan A, the "Term Loans") and a $6.0
million revolving credit facility (the "Revolver"). $74.5 million was borrowed
under the Amended Credit Agreement to refinance borrowings under the Credit
Agreement and to finance the acquisition of the Franchise Restaurants.
 
  In connection with the Credit Agreement and the Amended Credit Agreement,
the Company entered into a three year interest rate cap agreement with FNBB
under which the interest rate with respect to $40.0 million of the outstanding
principal of the Term Loans is capped at 9.0% per annum. The agreement expired
December 3, 1996 with the prepayment of the Term Loans, and the Company wrote
off the unamortized balance of fees paid to FNBB. (See Note 13.)
 
  On November 30, 1994, the Company issued junior subordinated notes (the
"Junior Subordinated Notes") in the aggregate principal amount of $600,000 to
an affiliate of FNBB. The Junior Subordinated Notes were used to finance the
acquisition of the Franchise Restaurants.
 
  On November 21, 1995, AmeriKing Tennessee Corporation I ("ATCI"), a wholly
owned subsidiary of Enterprises, issued a $6.9 million note to BKC (the "BKC
Note") to finance the acquisition of 11 Burger King restaurants in Tennessee
and Georgia. In July 1996, the BKC Note was refinanced on a long-term basis by
Franchise Acceptance Corporation Limited ("FAC"), an affiliate of BKC.
 
  On November 29, 1995, AmeriKing Colorado Corporation I ("ACCI"), a wholly
owned subsidiary of Enterprises, issued a $1.9 million note (the "FAC Note")
to FAC to finance the acquisition of five Burger King restaurants in Colorado.
The FAC Note bears interest at 2.75% above FAC's program rate, has mandatory
monthly principal payments of $50,083, is secured by certain assets of ACCI
and matures December 2005.
 
  On February 7, 1996, the Company amended and restated its Amended Credit
Agreement (the "Amended and Restated Credit Agreement") to provide for
increased net commitments under its Term Loans and Revolver. Under the Amended
and Restated Credit Agreement, FNBB and the other lenders thereto committed to
lend
 
                                      27
<PAGE>
 
                        AMERIKING, INC. AND SUBSIDIARY
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
$45.0 million under Term Loan A, $40.0 million under Term Loan B and $15.0
million under the Revolver. Pursuant to the terms of the Amended and Restated
Credit Agreement, the interest rate, amortization schedule and maturity of
each of the Term Loans and the Revolver were revised. On February 7, 1996,
$88.0 million was borrowed to refinance borrowings under the Amended Credit
Agreement and to finance the 1996 Acquisitions. As of December 30, 1996, there
were no amounts outstanding under the Revolver.
 
  On February 7, 1996, the Company issued senior subordinated notes in the
aggregate principal amount of $15.0 million (the "Senior Subordinated Notes")
to PMI Mezzanine Fund, L.P. ("PMI") and its nominee. The Senior Subordinated
Notes were used to finance the 1996 Acquisitions.
 
  On July 18, 1996, ATCI issued a note in the principal amount of $6.1 million
(the "TN Note") to FAC in connection with the refinancing of its BKC Note. The
TN Note bears interest at a fixed rate of 9.86% and is secured by certain
assets of ACTI. Principal installments of the note are due monthly. In
connection with the purchase of the TN Note from ATCI, FAC committed to lend
ATCI up to $900,000 under a separate credit facility (the "FAC Credit
Facility") for capital expenditures. Borrowings under the FAC Credit Facility
will bear interest at a variable rate with principal payments due monthly
based on a seven-year amortization schedule. No amounts were outstanding under
the FAC Credit Facility at December 30, 1996.
 
  On December 3, 1996, the Company issued 10 3/4% senior notes (the "Senior
Notes") due 2006 in the aggregate principal amount of $100.0 million to the
investing public. Proceeds from the Senior Notes were used to prepay the
Subordinated Notes, Seller Notes, Senior Subordinated Notes (collectively, the
Subordinated Notes, Seller Notes, and the Senior Subordinated Notes, are
herein referred to as the "Subordinated Debt") and the Term Loans under the
Amended and Restated Credit Agreement as well as pay a prepayment penalty in
connection with the prepayment of the Senior Subordinated Notes.
 
  Interest on the Senior Notes is payable semi-annually in cash in arrears on
June 1 and December 1, commencing June 1, 1997. The Senior Notes mature on
December 1, 2006 and are redeemable, in whole or in part, at the option of the
Company at any time on or after December 1, 2001 at the redemption prices
listed below:
 
<TABLE>
<CAPTION>
      YEAR                                                            PERCENTAGE
      ----                                                            ----------
      <S>                                                             <C>
      2001...........................................................  106.500%
      2002...........................................................  104.333
      2003...........................................................  102.167
      2004 and thereafter............................................  100.000
</TABLE>
 
  At any time prior to December 1, 1999, the Company may redeem up to 35% of
the original aggregate principal amount of the Senior Notes with the net
proceeds of one or more equity offerings at a redemption price equal to 110%
of the principal amount plus any accrued and unpaid interest to the date of
redemption. Upon the occurrence of a change of control, the Company will be
required, subject to certain conditions, to make an offer to purchase the
Senior Notes at a price equal to 101% of the principal amount plus accrued and
unpaid interest to the date of purchase.
 
  The Senior Notes are senior unsecured obligations of the Company and
pursuant to the terms of the Senior Notes indenture rank pari passu in right
of payment with other senior indebtedness of the Company and senior to
subordinated indebtedness of the Company, and effectively rank junior to
secured indebtedness of the Company and to indebtedness of the Company's
subsidiaries, including borrowings under the Amended and Restated Credit
Agreement.
 
  At December 30, 1996, the Senior Notes had a fair value that approximates
their carrying value.
 
 
                                      28
<PAGE>
 
                        AMERIKING, INC. AND SUBSIDIARY
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
  The Senior Notes Indenture includes covenants that, among other things,
limit payments of dividends and other restricted payments and the incurrence
of additional indebtedness. As of December 30, 1996, the Company was in
compliance with all such covenants.
 
  Aggregate maturities of the Company's long-term debt as of December 30, 1996
are as follows:
 
<TABLE>
      <S>                                                           <C>
      1997......................................................... $    525,000
      1998.........................................................      577,000
      1999.........................................................      636,000
      2000.........................................................      700,000
      2001.........................................................      770,000
      Thereafter...................................................  105,084,000
                                                                    ------------
        Total...................................................... $108,292,000
                                                                    ============
</TABLE>
 
6. SENIOR PREFERRED STOCK
 
  Concurrent with the Senior Notes offering, the Company offered $30.0 million
of units (the "Units"), consisting of 1.2 million shares of Senior Preferred
Stock and 30,000 shares of Common Stock. The Senior Preferred Stock is
exchangeable, at the option of the Company, into the Company's 13%
Subordinated Exchange Debentures due 2008, subject to the ability of the
Company to incur such indebtedness under the Amended and Resated Credit
Agreement and the Indenture. The Company incurred issuance costs in the amount
of $1.2 million related to the issuance of the Senior Preferred Stock.
 
  Each share of Senior Preferred Stock has a liquidation preference of $25 per
share. Unless declared, dividends on the Senior Preferred Stock will accrue in
each period ending on March 1, June 1, September 1 and December 1 of each year
at a rate of 13% per annum of the liquidation preference. On or before
December 1, 2001, the Company may, at its option, pay dividends in cash or in
additional fully paid and nonassessable shares of Senior Preferred Stock
having an aggregate liquidation preference equal to the amount of such
dividends, subject to certain restrictions under its existing credit agreement
and the Indenture. Thereafter, dividends may be paid in cash only.
 
  The Senior Preferred Stock may be redeemed at any time on or after December
1, 2001, in whole or in part, at the option of the Company, at the redemption
prices set forth below plus an amount in cash equal to all accumulated and
unpaid dividends (including an amount in cash equal to a prorated dividend for
the period from the dividend payment date immediately prior to the redemption
date to the redemption date), if redeemed during the 12-month period beginning
December 1 of each of the years set forth below:
 
<TABLE>
<CAPTION>
           YEAR                                    PERCENTAGE
           ----                                    ----------
           <S>                                     <C>
           2001...................................  106.500%
           2002...................................  104.333%
           2003...................................  102.167%
           2004 and thereafter....................  100.000%
</TABLE>
 
  On December 1, 2008, the Company will be required to redeem, subject to
contractual and other restrictions and to the legal availability of funds, all
outstanding shares of Senior Preferred Stock at a price equal to the then
effective liquidation preference, plus an amount in cash equal to all
accumulated and unpaid dividends, including an amount in cash equal to a
prorated dividend for the period from the dividend payment date immediately
prior to the redemption date to the redemption date.
 
 
                                      29
<PAGE>
 
                        AMERIKING, INC. AND SUBSIDIARY
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
7. LEASES
 
  The Company leases restaurant space under noncancelable operating leases
with remaining lease terms of one to twenty years. In many cases, the leases
provide for rent escalations and for one or more five-year renewal options.
The leases generally require the Company to pay property taxes, insurance,
maintenance and other operating costs of the properties, as well as contingent
rentals based upon a percentage (generally 8.5%) of net sales. In addition,
the Company leases office space, office equipment, restaurant equipment and
vehicles under noncancelable operating leases.
 
  Rent expense amounted to:
 
<TABLE>
<CAPTION>
                                                                  AUGUST 17,
                                                                   1994 TO
                                           FISCAL      FISCAL    DECEMBER 31,
                                            1996        1995         1994
                                         ----------- ----------- ------------
   <S>                                   <C>         <C>         <C>
   Minimum rentals under operating
    leases.............................. $15,647,000 $11,072,000  $2,691,000
   Contingent rentals...................   2,083,000     958,000     253,000
                                         ----------- -----------  ----------
     Total.............................. $17,730,000 $12,030,000  $2,944,000
                                         =========== ===========  ==========
</TABLE>
 
  Future minimum lease payments under noncancelable operating leases are as
follows:
 
<TABLE>
<CAPTION>
      FISCAL YEAR                                                      AMOUNT
      -----------                                                   ------------
      <S>                                                           <C>
      1997......................................................... $ 16,738,000
      1998.........................................................   16,681,000
      1999.........................................................   16,303,000
      2000.........................................................   15,624,000
      2001.........................................................   14,635,000
      Thereafter...................................................  132,542,000
                                                                    ------------
        Total...................................................... $212,523,000
                                                                    ============
</TABLE>
 
  Future minimum lease payments under noncancelable capital leases are as
follows:
 
<TABLE>
<CAPTION>
      FISCAL YEAR                                                       AMOUNT
      -----------                                                      --------
      <S>                                                              <C>
      1997............................................................ $129,000
      1998............................................................   66,000
                                                                       --------
        Total minimum lease payments..................................  195,000
      Less amount representing interest...............................   22,000
                                                                       --------
        Present value of the minimum lease obligation................. $173,000
                                                                       ========
</TABLE>
 
  Payments on capital leases for fiscal 1996 and 1995 were $129,000 and
$63,000, respectively. No payments were made in the period August 17, 1994 to
December 31, 1994.
 
                                      30
<PAGE>
 
                        AMERIKING, INC. AND SUBSIDIARY
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
 
8. CAPITAL STOCK
 
  At December 30, 1996, the Company's authorized capital stock was as follows:
 
<TABLE>
<CAPTION>
                                                            NUMBER
                                               NUMBER OF   OF SHARES   VOTING
                                     PAR VALUE   SHARES   ISSUED AND   RIGHTS
                                     PER SHARE AUTHORIZED OUTSTANDING PER SHARE
                                     --------- ---------- ----------- ---------
   <S>                               <C>       <C>        <C>         <C>
   Common Stock.....................   $0.01   4,000,000    893,290        1
   Non-Voting Common Stock..........    0.01     300,000          0        0
                                               ---------    -------
     Total common stock.............           4,300,000    893,290
                                               =========    =======
   Class A1 Preferred Stock.........    0.01       4,425      4,425        0
   Class A2 Preferred Stock.........    0.01       1,200      1,200        0
   Class B Preferred Stock..........    0.01       1,875      1,875        0
                                               ---------    -------
     Total preferred stock..........               7,500      7,500
                                               =========    =======
   Senior Preferred Stock...........    0.01   2,600,000     30,000        0
                                               =========    =======
</TABLE>
 
  Class A1, Class A2 and Class B preferred stock pay dividends at 6% per
annum, payable quarterly. To the extent not declared and paid, such dividends
accumulate. Class A1 preferred stock dividends are payable in cash or
additional shares of Class A1 Preferred Stock; Class A2 and Class B Preferred
Stock dividends are payable in cash only.
 
  In connection with entering into the Credit Agreement, the Company issued
warrants to an affiliate of FNBB to purchase 96,998 shares of a separate class
of non-voting Common Stock (the "Non-Voting Common Stock") at an exercise
price of $0.01 per share. The warrants are exercisable at any time and expire
the earlier of the date such warrants are exercised in full or November 30,
2002.
 
  During 1994, the Company granted stock options to purchase 9,702 shares of
Common Stock at $.12 per share in connection with employment agreements with
certain members of the Company's management. All of these options vested
ratably over a two-year period ending September 1, 1996 at which time all
became fully exercisable. The options expire at the earlier of 90 to 180 days
after separation of the employee from the Company or December 31, 2004. At
December 30, 1996 and January 1, 1996, all of these options remained
outstanding. The Company has not issued any additional stock options or
warrants as of December 30, 1996.
 
  In connection with the offering of its Senior Notes, the Company undertook a
recapitalization (the "Recapitalization"). Under the Recapitalization, the
Company converted all of its authorized, issued and outstanding Class A Common
Stock, Class C Common Stock and Class D Common Stock into an equal number of
shares of Common Stock, converted all of its authorized shares of Class B
Common Stock into an equal number of Non-Voting Common Stock and split all of
its shares of Common and Non-Voting Common Stock on a 863.281-for-1 basis. All
applicable share and per share data have been restated to give effect to the
stock split.
 
                                      31
<PAGE>
 
                        AMERIKING, INC. AND SUBSIDIARY
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
 
9. INCOME TAXES
 
  The provision (benefit) for income taxes, exclusive of amounts related to
the extraordinary item in 1996, was comprised of the following:
 
<TABLE>
<CAPTION>
                                                                    AUGUST 17,
                                                                     1994 TO
                                                                   DECEMBER 30,
                                          FISCAL 1996  FISCAL 1995     1994
                                          -----------  ----------- ------------
<S>                                       <C>          <C>         <C>
Federal:
  Current................................ $(3,357,000)
  Deferred...............................   1,512,000   $535,000     $171,000
State:
  Deferred...............................     289,000    290,000       20,000
                                          -----------   --------     --------
    Net provision (benefit) for income
     taxes............................... $(1,556,000)  $825,000     $191,000
                                          ===========   ========     ========
</TABLE>
 
  The difference between the recorded income tax provision (benefit) and the
"expected" tax provision (benefit) based on the statutory federal income tax
rate is as follows:
 
<TABLE>
<CAPTION>
                                                     FISCAL 1996  FISCAL 1995
                                                     -----------  -----------
   <S>                                               <C>          <C>
   Computed federal income tax provision (benefit)
    at statutory rate............................... $(1,460,000)  $605,000
   State income taxes (net of federal income tax
    effect).........................................    (188,000)    78,000
   Non-deductible expenses..........................      29,000
   Goodwill amortization............................      63,000     16,000
   Rate change......................................                126,000
                                                     -----------   --------
     Net provision (benefit) for income taxes....... $(1,556,000)  $825,000
                                                     ===========   ========
</TABLE>
 
  As of December 30, 1996 the Company had a net operating loss carry-forward
for income tax purposes of approximately $25.8 million to offset against
future taxable income. The net operating loss is expected to be utilized
beginning in fiscal 1999 and will begin to expire in 2009.
 
  Total deferred tax liabilities and deferred tax assets as of December 30,
1996 and January 1, 1996, and the sources of the differences between financial
accounting and tax bases of the Company's assets and liabilities which give
rise to the deferred tax liabilities and deferred tax assets and the effects
of each, are as follows:
 
<TABLE>
<CAPTION>
                                                        FISCAL 1996 FISCAL 1995
                                                        ----------- -----------
   <S>                                                  <C>         <C>
   Deferred tax liabilities:
     Depreciation...................................... $ 7,558,000 $4,411,000
     Other.............................................     161,000     21,000
                                                        ----------- ----------
                                                          7,719,000  4,432,000
   Deferred tax assets:
     Operating loss carry-forwards.....................  10,198,000  3,451,000
     Asset reserve.....................................     934,000
     Other.............................................     451,000    192,000
                                                        ----------- ----------
                                                         11,583,000  3,643,000
                                                        ----------- ----------
       Total........................................... $ 3,864,000 $ (789,000)
                                                        =========== ==========
</TABLE>
 
                                      32
<PAGE>
 
                        AMERIKING, INC. AND SUBSIDIARY
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
 
10. EMPLOYEE BENEFIT PLANS
 
  During fiscal 1996, the Company offered all of its employees the option to
participate in a 401(k) plan, upon fulfillment of certain requirements. The
Company has the option, but not the obligation, to match contributions made by
its employees under the 401(k) plan. In addition, the Company provides
disability insurance to certain key executives. The insurance covers all
salary payments to the executives during the period of disability. For fiscal
1996, the Company contributed approximately $23,000 to the Plan.
 
11. RELATED PARTIES
 
  During fiscal 1996 and 1995, and the period from August 17, 1994 to December
31, 1994, the Company recorded interest expense on the Subordinated Notes and
the Seller Notes totaling $1,880,000, $1,982,000 and $669,000, respectively.
 
  The Company leases two restaurants under noncancelable operating leases from
an entity which is owned by a member of the Company's management. The leases
expire in March 2006 and January 2007, respectively, and require total monthly
rental payments of $20,600. During fiscal 1996 and 1995, and the period from
August 17, 1994 to December 31, 1994, the Company recorded rent expense of
$247,000, $248,000 and $82,000, respectively, under these leases.
 
  The Company has entered into a management consulting agreement (the "TJC
Consulting Agreement") with an affiliate of The Jordan Company. Under the
terms of the TJC Consulting Agreement, the Company was required to pay the
affiliate an annual management fee equal to the higher of (1) $300,000, or (2)
0.35% of food sales. During fiscal 1995, the Company recorded expenses of
$479,000 under the TJC Consulting Agreement. On February 7, 1996, the Company
amended the TJC Consulting Agreement to provide for, among other things, an
annual management fee equal to the higher of $600,000 or 2.5% of the Company's
cash flow, as determined in the TJC Consulting Agreement. During fiscal 1996,
the Company recorded expenses of $600,000 under the amended TJC Consulting
Agreement.
 
12. NONRECURRING ITEMS
 
  In the fourth quarter of fiscal 1996, the Company recorded a loss of
$943,000 on property and equipment due to a vendor no longer servicing such
equipment as of January 1, 1997. The equipment is scheduled to be replaced in
fiscal 1997.
 
  The Company included in the fourth quarter of fiscal 1996 an unrealized,
non-cash, pre-tax loss on property and equipment of $1,287,000 due to the
forced disposition of five Company-owned restaurants. Such loss represents the
difference between the salvage value and the carrying value of equipment,
decor, landscaping, signage and related goodwill of the restaurants at the
expected date of disposition. All dispositions are expected to take place in
1997.
 
  Finally, during the fourth quarter of fiscal 1996, the Company included in
other income (expense)--net certain transaction expenses in the amount of
$2,397,000 associated with its attempted initial public offering.
 
13. EXTRAORDINARY ITEM
 
  In 1996, the Company recognized an extraordinary loss in the amount of
$8,356,000 ($5,055,000 on an after-tax basis) consisting of a write-off of
$4,906,000 ($2,968,000 on an after-tax basis) of deferred financing costs and
interest rate protection related to the repayment of Subordinated Debt and
indebtedness under the Credit Agreement and a prepayment penalty of $3,450,000
($2,087,000 on an after-tax basis) incurred in connection with the prepayment
of the Senior Subordinated Notes (See Note 5).
 
                                      33
<PAGE>
 
                        AMERIKING, INC. AND SUBSIDIARY
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
 
14. LEGAL PROCEEDINGS
 
  Various legal proceedings are pending against the Company, many involving
routine litigation incidental to the businesses.
 
  The consequences of these matters are not presently determinable but, in the
opinion of the management of the Company after consulting with legal counsel,
the ultimate liability is not expected to have a material effect on the
results of operations, financial position, liquidity or capital resources of
the Company.
 
15. SUBSEQUENT EVENT
 
  On March 20, 1997, the Company entered into a contract to sell to a third
party franchisee, 10 restaurants in the south Chicago suburban area, as
required by the acquisition of the Franchise Restaurants, for $8.2 million in
cash. For fiscal 1996, the restaurants to be sold accounted for approximately
$11.4 million and $700,000 of the Company's revenues and restaurant
contribution, respectively. The closing of the sale of the restaurants is
expected to occur in the second quarter of fiscal 1997, at which time the
Company will recognize a gain on sale of the stores in the amount of
approximately $1.9 million.
 
                                      34
<PAGE>
 
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
 
  There have been no changes in accountants during fiscal 1996 or 1995, nor
has there been any disagreement on any matter of accounting principles or
practices or financial disclosure which in either case is required to be
reported pursuant to this Item 9.
 
                                   PART III
 
ITEM 10. DIRECTORS AND EXECUTIVE OFFICES OF THE REGISTRANT
 
  The following sets forth the names and ages of the Company's directors and
executive officers and the positions they held at December 31, 1996:
 
<TABLE>
<CAPTION>
NAME                                      AGE POSITION WITH COMPANY
----                                      --- ---------------------
<S>                                       <C> <C>
Lawrence E. Jaro........................   53 Managing Owner, Chairman and Chief
                                              Executive Officer
William C. Osborn.......................   48 Vice Chairman and Director
Gary W. Hubert..........................   44 Chief Operating Officer and Director
Joel D. Aaseby..........................   38 Chief Financial Officer and Corporate
                                              Secretary
Scott E. Vasatka........................   43 Vice President-Human Resources
A. Richard Caputo, Jr. .................   31 Vice President and Director
Thomas H. Quinn.........................   49 Director
John W. Jordan, II......................   49 Director
David W. Zalaznick......................   43 Director
</TABLE>
 
  Set forth below is a brief description of the business experience of each
director and executive officer of the Company.
 
  MR. JARO has served as the Company's Managing Owner, Chief Executive Officer
and as a Director since the Company's inception, and currently serves as its
Chairman. Mr. Jaro has over 15 years of experience as a Burger King restaurant
franchisee. Prior to joining the Company, Mr. Jaro was the President and Chief
Executive Officer of Jaro Enterprises, Inc., an operator of 12 Burger King
restaurants in Colorado and Texas.
 
  MR. OSBORN has previously served as one of the Company's Managing Owners and
currently serves as a Director. Mr. Osborn also served as the Company's
President until May 10, 1996 at which time he was appointed the Company's Vice
Chairman. Mr. Osborn has over 10 years of experience as a Burger King
restaurant franchisee as well as a franchisee of other restaurant concepts.
Prior to joining the Company, Mr. Osborn owned and operated three Burger King
restaurants in Colorado.
 
  MR. HUBERT has served as the Company's Senior Vice President and as a
Director since the Company's inception, and currently serves as Chief
Operating Officer. Mr. Hubert has over 20 years of experience with BKC in
restaurant operations and franchise management. Prior to joining the Company,
Mr. Hubert was a Vice President with BKC in both the Franchise and Corporate
Operations divisions and served as the Area Operations Manager for BKC's
Chicago region from 1985 to 1989.
 
  MR. AASEBY has served as the Company's Vice President--Finance and Corporate
Secretary since the Company's inception, and currently serves as Chief
Financial Officer. Mr. Aaseby has over 21 years of experience with BKC in
various finance, accounting and operations positions, including Midwest Sector
Controller from 1989 to 1994.
 
  MR. VASATKA has served as the Company's Vice President--Human Resources
since the Company's inception. Mr. Vasatka has over 26 years of experience in
the restaurant industry. Prior to joining the Company,
 
                                      35
<PAGE>
 
Mr. Vasatka was employed by Davgar Restaurants from 1969 until 1994, and held
various senior management positions including District Manager, Director of
Training and Division President.
 
  MR. CAPUTO has served as a Vice President and Director of the Company since
its inception. Mr. Caputo is a partner of The Jordan Company, which he has
been associated with since 1990. Mr. Caputo is also a director of GFSI, Inc.,
Jackson Products, Inc. as well as other privately held companies.
 
  MR. QUINN has served as a Director of the Company since its inception. Since
1988, Mr. Quinn has been President, Chief Operating Officer and a director of
Jordan Industries, Inc., a diversified industrial holding company. Mr. Quinn
is also the Chairman of the Board and Chief Executive Officer of American
Safety Razor Company and Welcome Home, Inc. as well as other privately held
companies.
 
  MR. JORDAN has served as a Director of the Company since its inception. Mr.
Jordan is a managing partner of The Jordan Company, a private merchant banking
firm which he founded in 1982. Mr. Jordan is also a director of Jordan
Industries, Inc., American Safety Razor Company, GFSI, Inc., Jackson Products,
Inc., Carmike Cinemas, Inc., Welcome Home, Inc. and Apparel Ventures, Inc. as
well as other privately held companies.
 
  MR. ZALAZNICK has served as a Director of the Company since its inception.
Since 1982, Mr. Zalaznick has been a managing partner of The Jordan Company.
Mr. Zalaznick is also a director of Jordan Industries, Inc., Carmike Cinemas,
Inc., American Safety Razor Company, GFSI, Inc., Jackson Products, Inc.,
Marisa Christina, Inc. and Apparel Ventures, Inc. as well as other privately
held companies.
 
  Each of the Company's directors was nominated to the Board of Directors
pursuant to the Stockholders Agreement, which required the stockholders named
therein to vote for such nominees.
 
BOARD OF DIRECTORS
 
  Liability Limitation. The Company's Certificate of Incorporation (the
"Certificate of Incorporation") provides that a director of the Company shall
not be personally liable to it or its stockholders for monetary damages to the
fullest extent permitted by Delaware Corporation Law. In accordance with
Delaware Corporation Law, the Certificate of Incorporation does not eliminate
or limit the liability of a director for acts or omissions that involve
intentional misconduct by a director or a knowing violation of law by a
director for voting or assenting to an unlawful distribution, or for any
transaction from which the director will personally receive a benefit in
money, property, or services to which the director is not legally entitled.
Delaware Corporation Law does not affect the availability of equitable
remedies such as an injunction or rescission based upon a director's breach of
his duty of care. Any amendment to these provisions of the Delaware
Corporation Law will automatically be incorporated by reference into the
Certificate of Incorporation and the Company's Bylaws, without any vote on the
part of its stockholders, unless otherwise required.
 
  Indemnification Agreements. Simultaneously with the consummation of the
Offerings, the Company and each of its directors entered into indemnification
agreements. The indemnification agreements provide that the Company will
indemnify the directors against certain liabilities (including settlements)
and expenses actually and reasonably incurred by them in connection with any
threatened or pending legal action, proceeding or investigation (other than
actions brought by or in the right of the Company) to which any of them is, or
is threatened to be, made a party by reason of their status as a director,
officer or agent of the Company, or serving at the request of the Company in
any other capacity for or on behalf of the Company; provided that (i) such
director acted in good faith and in a manner not opposed to the best interest
of the Company, (ii) with respect to any criminal proceedings, such director
had no reasonable cause to believe his or her conduct was unlawful, (iii) such
director is not finally adjudged to be liable for negligence or misconduct in
the performance of his or her duty to the Company, unless the court views in
light of the circumstances the director is nevertheless entitled to
indemnification, and (iv) the indemnification does not relate to any liability
arising under Section 16(b) of the Securities Exchange Act of 1934 or the
rules or regulations promulgated thereunder. With respect to any action
brought by or in the right of the Company, directors may also be indemnified,
to the extent not prohibited by
 
                                      36
<PAGE>
 
applicable laws or as determined by a court of competent jurisdiction, against
costs and expenses actually and reasonably incurred by them in connection with
such action if they acted in good faith and in the best interests of the
Company.
 
  Director Compensation. Directors who are not employees of the Company
receive $12,500 per year for serving as a director of the Company. In
addition, the Company reimburses directors for their travel and other expenses
incurred in connection with attending meetings of the Board of Directors.
 
COMPENSATION COMMITTEE INTERLOCK AND INSIDER PARTICIPATION
 
  The Board of Directors does not maintain a Compensation Committee. During
fiscal 1996, however, Messrs. Caputo, Jaro, Jordan and Quinn participated in
deliberations of the Board of Directors concerning executive officer
compensation.
 
ITEM 11. EXECUTIVE COMPENSATION
 
SUMMARY COMPENSATION TABLE
 
  The following table sets forth a summary of certain information regarding
compensation paid or accrued by the Company during the last three fiscal years
to each of the Company's chief executive officer and other executive officers
whose total annual salary and bonus exceeded $100,000 during such period
(collectively, the "Named Executives").
 
                          SUMMARY COMPENSATION TABLE
 
<TABLE>
<CAPTION>
                                           ANNUAL COMPENSATION
                                    ---------------------------------
                                                           OTHER
                             FISCAL                       ANNUAL       ALL OTHER
NAME AND PRINCIPAL POSITION   YEAR   SALARY  BONUS(1) COMPENSATION(2) COMPENSATION
---------------------------  ------ -------- -------- --------------- ------------
<S>                          <C>    <C>      <C>      <C>             <C>
Lawrence E. Jaro........      1996  $215,000 $64,500
 Managing Owner and           1995   215,000  64,500
 Chief Executive Officer
William C. Osborn.......      1996  $215,000 $64,500                    $10,000(3)
 Vice Chairman                1995   215,000  64,500                     10,000(3)
Gary W. Hubert..........      1996  $215,000 $64,500
 Chief Operating Officer      1995   215,000  64,500
 and
 Senior Vice President
Joel D. Aaseby..........      1996  $110,000 $30,000
 Chief Financial Officer      1995   110,000  32,000
 and
 Corporate Secretary
Scott E. Vasatka........      1996  $105,000 $21,000
 Vice President--Human        1995   105,000  31,000
 Resources
</TABLE>
--------
(1) The Company provides bonus compensation based on an individual's
    achievement of certain specified objectives, including achieving the
    Company's stated EBITDA target and amortization. Employees are eligible to
    receive from 10% to 60% of their annual compensation as a bonus.
(2) No executive named in the table above received any Other Annual
    Compensation in an amount in excess of either $50,000 or 10% of salary and
    bonus reported for him in the two preceding columns.
(3) Represents the amount of life insurance premiums paid by the Company on
    the life of Mr. Osborn with death benefits designated by Mr. Osborn.
 
 Option Exercises in Fiscal 1996 and Fiscal Year-end Values
 
  The following table shows stock options exercised by each of the Named
Executives during fiscal 1996, including the aggregate value of gains on the
date of exercise. In addition, this table includes the number of
 
                                      37
<PAGE>
 
shares covered by both exercisable and non-exercisable stock options as of
fiscal year-end, and the values for unexercised options. Except as listed in
the table, no other Named Executive exercised any Company stock options or
beneficially owned unexercised Company stock options.
 
                      AGGREGATED OPTION EXERCISES IN LAST
                    FISCAL YEAR AND FISCAL YEAR-END VALUES
 
<TABLE>
<CAPTION>
                                NUMBER OF SHARES OF
                              COMMON STOCK UNDERLYING    VALUE OF UNEXERCISED
                              UNEXERCISED OPTIONS AT     IN-THE-MONEY OPTIONS
                                 DECEMBER 30, 1996      AT DECEMBER 30, 1996(1)
                             ------------------------- -------------------------
                             EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
                             ----------- ------------- ----------- -------------
<S>                          <C>         <C>           <C>         <C>
Scott E. Vasatka............    4,851                      $ 0
</TABLE>
--------
(1) Based upon the difference between the estimated fair market value of the
    Company's Common Stock on December 30, 1996 (as determined by the Board of
    Directors) of $0.12 per share and the option exercise price of $0.12 per
    share. The above valuation may not reflect the actual value of unexercised
    options as the value of unexercised options will fluctuate over time.
 
RETIREMENT AND 401(K) PLANS
 
  The Company offers all of its employees the option to participate in a
401(k) plan, upon fulfillment of certain requirements. The Company has the
option, but not the obligation, to match contributions made by its employees
under the 401(k) plan. In addition, the Company provides disability insurance
to certain key executives. The insurance covers all salary payments to the
executives during the entire period of disability.
 
EMPLOYMENT AGREEMENTS
 
  Effective September 1, 1994, Enterprises entered into an employment
agreement with Lawrence E. Jaro (the "Jaro Employment Agreement"). Pursuant to
the terms of the Jaro Employment Agreement, Mr. Jaro agreed to serve as Chief
Executive Officer and Co-Managing Owner of the Company and Enterprises for a
five-year period ending on August 31, 1999 with automatic one-year renewals
thereafter, provided that neither Mr. Jaro nor Enterprises has provided the
other with a notice of termination 120 days prior to the expiration date of
the Jaro Employment Agreement. Mr. Jaro also agreed not to compete against
Enterprises throughout the term of his employment and for one year thereafter,
and not to disclose any confidential information during and after the term of
his employment. In exchange for his services and covenants, Enterprises agreed
to compensate Mr. Jaro with a base salary of $215,000 per annum (subject to an
annual cost of living adjustment), an automobile allowance of $800 per month
and reimbursement of up to $6,000 per annum for automobile-related costs. In
the event Mr. Jaro no longer provides services to Enterprises due to (i) his
death or physical or mental disability or (ii) his dismissal without Cause (as
defined in the Jaro Employment Agreement) or as a result of a material
reduction in his authority, then Mr. Jaro is entitled to receive his base
compensation from the date of his termination through the first anniversary of
such termination or through the remaining term of his employment agreement,
respectively.
 
  Effective September 1, 1994, Enterprises entered into an employment
agreement with William C. Osborn (the "Osborn Employment Agreement"). Pursuant
to the terms of the Osborn Employment Agreement, Mr. Osborn agreed to serve as
President and Co-Managing Owner of the Company and Enterprises for a five-year
period ending on August 31, 1999. Mr. Osborn also agreed not to compete
against Enterprises throughout the term of his employment and for one year
thereafter, and not to disclose any confidential information during and after
the term of his employment. In exchange for his services and covenants,
Enterprises agreed to compensate Mr. Osborn with a base salary of $215,000 per
annum (subject to an annual cost of living adjustment), an automobile
allowance of $800 per month and reimbursement of up to $6,000 per annum for
automobile-related costs. In the event Mr. Osborn no longer provides services
to Enterprises due to (i) his death or physical or
 
                                      38
<PAGE>
 
mental disability or (ii) his dismissal without Cause (as defined in the Osborn
Employment Agreement) or as a result of a material reduction in his authority,
then Mr. Osborn is entitled to receive his base compensation from the date of
his termination through the first anniversary of such termination or through
the remaining term of his employment agreement, respectively. Effective May 10,
1996, the Company and Mr. Osborn agreed that Mr. Osborn would resign as
President to become Vice Chairman of the Company.
 
  Effective September 1, 1994, Enterprises entered into an employment agreement
with Gary W. Hubert (the "Hubert Employment Agreement"). Pursuant to the terms
of the Hubert Employment Agreement, Mr. Hubert agreed to serve as Senior Vice
President and Managing Director of the Company and Enterprises for a five-year
period ending on August 31, 1999 with automatic one-year renewals thereafter,
provided that neither Mr. Hubert nor Enterprises has provided the other with
notice of termination 120 days prior to the expiration of the Hubert Employment
Agreement. Mr. Hubert also agreed not to compete against Enterprises throughout
the term of his employment and for one year thereafter, and not to disclose any
confidential information during and after the term of his employment. In
exchange for his services and covenants, Enterprises agreed to compensate Mr.
Hubert with a base salary of $215,000 per annum (subject to an annual cost of
living adjustment), an automobile allowance of $800 per month and reimbursement
of up to $6,000 per annum for automobile-related costs. In the event Mr. Hubert
no longer provides services to Enterprises due to (i) his death or physical or
mental disability or (ii) his dismissal without Cause (as defined in the Hubert
Employment Agreement) or as a result of a material reduction in his authority,
then Mr. Hubert is entitled to receive his base compensation from the date of
his termination through the first anniversary of such termination or through
the remaining term of his employment agreement, respectively.
 
  Effective September 1, 1994, Enterprises entered into an employment agreement
with Joel D. Aaseby (the "Aaseby Employment Agreement"). Pursuant to the terms
of the Aaseby Employment Agreement, Mr. Aaseby agreed to serve as Vice
President--Finance of Enterprises for a five-year period ending on August 31,
1999 with automatic one-year renewals thereafter, provided that neither Mr.
Aaseby nor Enterprises has provided the other with notice of termination 120
days prior to the expiration of the Aaseby Employment Agreement. Mr. Aaseby
also agreed not to compete with Enterprises throughout the term of his
employment and for one year thereafter, and not to disclose any confidential
information during and after the term of his employment. In exchange for his
services and covenants, Enterprises agreed to compensate Mr. Aaseby with a base
salary of $110,000 per annum (subject to an annual cost of living adjustment),
an automobile allowance of $500 per month and reimbursement of up to $6,000 per
annum for automobile-related costs. In the event Mr. Aaseby no longer provides
services to Enterprises due to (i) his death or physical or mental disability
or (ii) his dismissal without Cause (as defined in the Aaseby Employment
Agreement) or as a result of a material reduction in his authority, then Mr.
Aaseby is entitled to receive his base compensation from the date of his
termination through the first anniversary of such termination or through the
remaining term of his employment agreement, respectively.
 
  Effective September 1, 1994, Enterprises entered into an employment agreement
with Scott E. Vasatka (the "Vasatka Employment Agreement"). Pursuant to the
terms of the Vasatka Employment Agreement, Mr. Vasatka agreed to serve as Vice
President--Human Resources of Enterprises for a five-year period ending on
August 31, 1999 with automatic one-year renewals thereafter, provided that
neither Mr. Vasatka nor Enterprises has provided the other with notice of
termination 120 days prior to the expiration of the Vasatka Employment
Agreement. Mr. Vasatka also agreed not to compete against Enterprises
throughout the term of his employment and for one year thereafter, and not to
disclose any confidential information during and after the term of his
employment. In exchange for his services and covenants, Enterprises agreed to
compensate Mr. Vasatka with a base salary of $105,000 per annum (subject to an
annual cost of living adjustment), an automobile allowance of $500 per month
and reimbursement of up to $6,000 per annum for automobile-related costs. In
the event Mr. Vasatka no longer provides services to Enterprises due to (i) his
death or physical or mental disability or (ii) his dismissal without Cause (as
defined in the Vasatka Employment Agreement) or as a result of a material
reduction in his authority, then Mr. Vasatka is entitled to receive his base
compensation from the date of his termination
 
                                       39
<PAGE>
 
through the first anniversary of such termination or through the remaining
term of his employment agreement, respectively.
 
  Effective simultaneously with the closing of the Offerings, the Company
entered into a new employment agreement with Mr. Osborn (the "New Osborn
Employment Agreement"). Pursuant to the terms of the New Osborn Employment
Agreement, Mr. Osborn will (i) continue to serve as Vice Chairman of the
Company, (ii) be entitled to annual compensation of $225,000 and (iii) be
subject to non-competition and confidentiality provisions similar to Mr.
Osborn's existing employment agreement. The term of the New Osborn Employment
Agreement will expire on September 1, 1999.
 
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
  The table below sets forth as of December 30, 1996, certain information
regarding beneficial ownership of Common Stock held by (i) each director and
each of the Named Executives who own shares of the Company's equity
securities, (ii) all directors and executive officers of the Company as a
group, and (iii) each person known by the Company to own beneficially more
than 5% of the Company's Common Stock. Each individual or entity named has
sole investment and voting power with respect to shares of Common Stock
indicated as beneficially owned by them, except where otherwise noted.
 
<TABLE>
<CAPTION>
                                                              SHARES
                                                      BENEFICIALLY OWNED (1)
                                                      --------------------------
                                                       NUMBER       PERCENTAGE
                                                      ------------ -------------
<S>                                                   <C>          <C>
Executive Officers and Directors:
  Lawrence E. Jaro(2)................................      196,051         21.9%
  William C. Osborn(3)...............................       81,105          9.1
  Gary W. Hubert.....................................       29,101          3.3
  Joel D. Aaseby.....................................        9,703          1.1
  Thomas H. Quinn(4).................................       29,096          3.3
  John W. Jordan, II(5)..............................       38,285          4.3
  A. Richard Caputo, Jr.(6)..........................       12,609          1.4
  David W. Zalaznick(7)..............................       38,285          4.3
  Scott E. Vasatka...................................        4,851          0.5
  All executive officers and directors as a group
   (9 persons)(8)....................................      439,086         48.9
Other Principal Stockholders:
  MCIT PLC ("MCIT")(9)...............................      246,302         27.6%
  Leucadia Investors, Inc.(10).......................       61,575          6.9
  BancBoston Investments Inc. ("BancBoston")(11).....       96,998          9.8
</TABLE>
--------
 (1) Calculated pursuant to Rule 13d-3(d) under the Exchange Act. Under Rule
     13d-3(d), shares not outstanding which are subject to options, warrants,
     rights or conversion privileges exercisable within 60 days are deemed
     outstanding for the purpose of calculating the number and percentage
     owned by such person, but not deemed outstanding for the purpose of
     calculating the percentage owned by each other person listed. As of
     December 30, 1996, the Company had 863,290 shares of Common Stock issued
     and outstanding. The table gives effect to an 863.281-for-one stock split
     and the issuance of 30,000 shares of Common Stock, representing 3% of the
     fully diluted outstanding shares of Common Stock of the Company, in
     connection with the Company's Units Offering.
 (2) Includes 166,950 shares of Common Stock beneficially owned by various
     affiliates of Mr. Jaro. Mr. Jaro and his affiliates also own 915 shares
     of Class A2 Preferred Stock and 305 shares of Class B Preferred Stock.
     Mr. Jaro's address is c/o the Company, 2215 Enterprise Drive, Suite 1502,
     Westchester, Illinois 60154.
 (3) Includes 52,004 shares of Common Stock beneficially owned by various
     affiliates of Mr. Osborn. Mr. Osborn and his affiliates also own 285
     shares of Class A2 Preferred Stock and 95 shares of Class B
 
                                      40
<PAGE>
 
    Preferred Stock. Mr. Osborn's address is c/o the Company, 2215 Enterprise
    Drive, Suite 1502, Westchester, Illinois 60154.
 (4) Mr. Quinn is President and Chief Operating Officer of Jordan Industries,
     Inc., a company affiliated with The Jordan Company, an entity with which
     Messrs. Caputo, Jordan and Zalaznick are also affiliated.
 (5) Includes 38,285 shares of Common Stock held by John W. Jordan II
     Revocable Trust, of which Mr. Jordan is trustee. Mr. Jordan also owns
     96.25 shares of Class B Preferred Stock. Mr. Jordan's address is c/o The
     Jordan Company, 9 West 57th Street, New York, New York 10019.
 (6) Mr. Caputo is a partner of The Jordan Company, an entity with which
     Messrs. Jordan and Zalaznick are also affiliated.
 (7) Mr. Zalaznick also owns 96.25 shares of Class B Preferred Stock. Mr.
     Zalaznick's address is c/o The Jordan Company, 9 West 57th Street, New
     York, New York 10019.
 (8) Includes all shares owned directly or beneficially by directors and
     executive officers, including shares beneficially owned by affiliates of
     Messrs. Jaro and Osborn.
 (9) MCIT also owns 3,000 shares of Class A1 Preferred Stock and 500 shares of
     Class B Preferred Stock. The principal address of MCIT is c/o The Jordan
     Company, 9 West 57th Street, New York, New York 10019.
(10) Leucadia also owns 125 shares of Class B Preferred Stock. The principal
     address of Leucadia is 315 Park Avenue South, New York, New York 10010.
     See "Description of Capital Stock--Preferred Stock."
(11) Represents immediately exercisable warrants to purchase 96,998 shares of
     Non-Voting Common Stock. BancBoston also owns 1,425 shares of Class A1
     Preferred Stock and 475 shares of Class B Preferred Stock. The principal
     address of BancBoston is 100 Federal Street, Boston, Massachusetts 02110.
 
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
  Subordinated Debt Holders. PMI, MCIT, affiliates of Messrs. Jaro and Osborn,
and BancBoston were the holders of Senior Subordinated Notes, Subordinated
Notes, Seller Notes and the Junior Subordinated Notes, respectively. In fiscal
1996, the Company paid approximately $1.6 million of interest expense to PMI
under the Senior Subordinated Notes, and during fiscal 1995, the Company paid
to MCIT, the holders of the Seller Notes and BancBoston approximately $1.4
million, $560,000 and $36,000 as interest expense under the Subordinated
Notes, the Seller Notes and the Junior Subordinated Notes, respectively.
Simultaneously with the consummation of the offerings of its Senior Notes and
Units, the Company used approximately $33.9 million from the net proceeds of
the offerings to prepay the principal amount under each of the Senior
Subordinated Notes, the Subordinated Notes and the Seller Notes (including the
prepayment penalty of approximately $3.4 million to PMI). In connection with
the prepayment of the Senior Subordinated Notes, the Company cancelled the
warrants held by PMI. The FAC Notes to ATCI and ACCI and the Junior
Subordinated Notes remain outstanding following the offerings. MCIT and
BancBoston are principal stockholders of the Company. Mr. Jaro is the
Company's Chairman, Chief Executive Officer, managing owner and a principal
stockholder and Mr. Osborn is the Company's Vice Chairman, director and a
principal stockholder.
 
  The Jordan Company. On September 1, 1994, the Company and Enterprises
entered into the TJC Consulting Agreement agreement with an affiliate of The
Jordan Company. The TJC Consulting Agreement was subsequently amended on
February 7, 1996. Under the TJC Consulting Agreement, the Company retained an
affiliate of The Jordan Company to render consulting services to it regarding
the Company and its subsidiaries, their financial and business affairs and
their relationships with their lenders and stockholders, and the operation and
expansion of their business. The TJC Consulting Agreement expires on September
1, 2004, but is automatically renewed for successive one-year terms, unless
either party provides written notice of termination 60 days prior to the
scheduled renewal date. The TJC Consulting Agreement provides for an annual
consulting fee payable on a quarterly basis equal to the higher of (i)
$600,000 or (ii) 2.5% of the Company's cash flow (as determined in the TJC
Consulting Agreement). In addition, the TJC Consulting Agreement provides for
payment to the affiliate of The Jordan Company of (i) an investment banking
and sponsorship fee of up to 2% of the purchase price of certain acquisitions
or sales involving the Company, Enterprises or any of their subsidiaries and
(ii) a financial consulting fee of up to 1.0% of any debt, equity or other
financing arranged by the Company with the assistance of TJC. During fiscal
1996 and 1995, the Company paid consulting fees to the affiliate of
 
                                      41
<PAGE>
 
The Jordan Company of approximately $600,000 and $479,000, respectively,
pursuant to the terms of the TJC Consulting Agreement. In connection with the
acquisition on February 7, 1996 by certain subsidiaries of Enterprises of an
aggregate of 36 Burger King restaurant franchises located in the States of
Indiana, Kentucky, Ohio, Virginia and North Carolina, the Company paid to the
affiliate of The Jordan Company an investment banking fee of $1.0 million and
paid fees totaling $300,000 to certain members of the Company's senior
management. Concurrent with the Offerings and related financings are
consummated by the Company, the Company paid to the affiliate of The Jordan
Company an investment banking fee of $1.3 million pursuant to the terms of the
TJC Consulting Agreement. The Company believes that the terms of the TJC
Consulting Agreement are comparable to the terms that it would obtain from
disinterested third parties for comparable services. Messrs. Jordan, Zalaznick
and Caputo are partners of The Jordan Company.
 
  Burger King Corporation. In connection with certain of its previous
acquisitions of Burger King restaurants, the Company and its subsidiaries have
entered into certain agreements with BKC as a precondition to receiving BKC
approval of the acquisition. As part of its purchase agreement with BKC, dated
September 1, 1994, Enterprises committed to expend up to $2.3 million by
September 1, 1997 to upgrade the 68 Burger King restaurants it acquired. As
part of its November 21, 1995 acquisition of 11 Burger King restaurants, the
Company and ATCI agreed to (i) renew the Company's commitment, initially made
in connection with its November 30, 1994 acquisition, to sell up to 10 Burger
King restaurants to a franchisee to be designated by BKC and (ii) expend
approximately $1.5 million by November 21, 1997 to upgrade certain of the 11
Burger King restaurants so acquired. The commitment by ATCI to upgrade the
restaurants is subject to certain capital expenditures to be made by BKC. As
part of its acquisitions of 36 Burger King restaurants on February 7, 1996,
the Company and ATCI (i) renewed the Company's commitment to sell up to 10
Burger King restaurants to a franchisee to be designated and (ii) agreed to
make the capital expenditures necessary to bring each of the Burger King
restaurants operated by the Company and its subsidiaries into compliance with
BKC current repair and maintenance standards by September 7, 1997.
 
  In connection with the Offerings, the Company has committed to BKC that,
without BKC's prior written consent, (i) it will not pay cash dividends on the
Senior Preferred Stock on or prior to December 1, 2001 and (ii) it will not
pay cash dividends to holders of Common Stock until the Senior Notes are
repaid in full and the Senior Preferred Stock is redeemed or otherwise
retired. The Company has further committed to BKC that for the foreseeable
future (i) it will make capital expenditures on its existing restaurants equal
to 1% of its gross sales and (ii) it will spend an amount equal to 1% of its
gross sales on local advertising. The Company has also committed to BKC that
it will develop 17 restaurants in fiscal 1997. In the event the Company fails
to develop at least 14 restaurants in fiscal 1997, the Company will pay BKC
$150,000. In addition, to the extent the Company develops 13 or fewer
restaurants in fiscal 1997, the Company will be obligated to pay BKC $75,000
for each restaurant less than 14 it fails to develop.
 
  In connection with the Offerings, the Company is also required to enter into
an agreement with BKC pursuant to which the Company will, among other things,
indemnify BKC for any claims against BKC arising out of the Offerings.
 
  Members of the Board of Directors. Enterprises leases the land and buildings
for two Burger King restaurants under noncancelable operating leases from an
entity which is owned by Mr. Jaro. The leases expire in March 2006 and January
2007, respectively, and require total monthly rental payments of $20,600. For
the fiscal years ended December 30, 1996 and January 1, 1996, the Company
recorded rent expense of $247,000 and $248,000, respectively, under these
leases. The Company believes that the terms of these leases are comparable to
the terms it would obtain from disinterested third parties for comparable
sites.
 
  Pursuant to the provisions of BKC's franchise agreements, Messrs. Jaro,
Osborn and Hubert, as managing owners and owners, have guaranteed the
obligations of the Company and its subsidiaries under each franchise agreement
and each lease agreement in which BKC is the lessor.
 
 
                                      42
<PAGE>
 
  In connection with the September 1994 purchase of the Management Restaurants,
the Company (i) entered into a $700,000 revolving loan agreement with Mr. Jaro
whereby the Company loaned funds to Mr. Jaro and (ii) deferred payment in full
of the purchase price for one of the Management Restaurants sold to the Company
by a corporation controlled by Mr. Jaro. In September 1996, the Company
canceled the outstanding balance of the revolving loan to Mr. Jaro in exchange
for Mr. Jaro's cancellation of the outstanding balance of the deferred purchase
price for the restaurant.
 
  The Company has adopted a policy to provide that future transactions between
the Company and its officers, directors and other affiliates must (i) be
approved by a majority of the members of the Board of Directors and by a
majority of the disinterested members of the Board of Directors and (ii) be on
terms no less favorable to the Company than could be obtained from unaffiliated
third parties.
 
                                    PART IV
 
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
 
                    FINANCIAL STATEMENTS INCLUDED IN ITEM 8
 
  See "Index to Financial Statements of AmeriKing, Inc. and Subsidiary" set
forth in Item 8, "Financial Statements and Supplementary Data."
 
               SCHEDULES OMITTED AS NOT REQUIRED OR INAPPLICABLE
 
  Schedule I--Condensed financial information of registrant
 
  Schedule II--Valuation and qualifying accounts
 
  Schedule III--Real estate and accumulated depreciation
 
  Schedule IV--Mortgage loans on real estate
 
  Schedule V--Supplemental Information Concerning Property--Casualty Insurance
Operations
 
                                    EXHIBITS
 
  A list of exhibits included as part of this Form 10-K or incorporated by
reference is set forth in the Index to Exhibits. Included in the Index to
Exhibits are the following exhibits which constitute management contracts or
compensatory plans or arrangements.
 
    1. TJC Consulting Agreement
 
    2. Jaro Employment Agreement
 
    3. Osborn Employment Agreement
 
    4. Hubert Employment Agreement
 
    5. Aaseby Employment Agreement
 
    6. Vasatka Employment Agreement
 
    7. New Osborn Employment Agreement
 
                              REPORTS ON FORM 8-K
 
  The Company did not file any reports on Form 8-K in fiscal 1996.
 
                                       43
<PAGE>
 
                                   SIGNATURES
 
  PURSUANT TO THE REQUIREMENTS OF SECTION 13 OF 15(D) OF THE SECURITIES
EXCHANGE OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON
ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF
WESTCHESTER, STATE OF ILLINOIS, ON MARCH  , 1997.
 
                                          Ameriking, Inc.
 
                                                             *
                                          By: _________________________________
                                             LAWRENCE E. JARO MANAGING OWNER,
                                               CHAIRMAN AND CHIEF EXECUTIVE
                                                          OFFICER
 
  PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED, THIS AMENDED REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING
PERSONS IN THE CAPACITIES INDICATED ON THE   DAY OF MARCH, 1997.
 
              SIGNATURE                               TITLE
 
                  *                           Managing Owner, Chairman and
-------------------------------------          Chief Executive Officer
          LAWRENCE E. JARO                     (Principal Executive Officer)
 
                  *                           Vice Chairman
-------------------------------------
          WILLIAM C. OSBORN
 
                  *                           Director and Chief Operating
-------------------------------------          Officer
           GARY W. HUBERT
 
                  *                           Chief Financial Officer and
-------------------------------------          Corporate Secretary (Principal
             JOEL ASAEBY                       Financial and Accounting
                                               Officer)
 
                  *                           Director and Vice President
-------------------------------------
       A. RICHARD CAPUTO, JR.
 
                  *                           Director
-------------------------------------
           THOMAS H. QUINN
 
                  *                           Director
-------------------------------------
          JOHN W. JORDAN II
 
                  *                           Director
-------------------------------------
          DAVID W. ZALANICK
 
      /s/ A. Richard Caputo, Jr.
By: _________________________________
          As Attorney-in-Fact
 
  No copies of any annual report or proxy with respect to any meeting of
security-holders have been sent to the Company's security-holders.
 
                                       44
<PAGE>
 
                               INDEX TO EXHIBITS
 
<TABLE>
<CAPTION>
                                                                  SEQUENTIALLY
 EXHIBIT                                                            NUMBERED
 NUMBER                        DESCRIPTION                            PAGE
 -------                       -----------                        ------------
 <C>     <S>                                                      <C>
 1.1     FORM OF UNDERWRITING AGREEMENT FOR NOTES OFFERING.....         *
 1.2     FORM OF UNDERWRITING AGREEMENT FOR UNITS OFFERING.....         *
 2.1++   PURCHASE AND SALE AGREEMENT, DATED SEPTEMBER 1, 1994,
         BETWEEN BURGER KING CORPORATION ("BKC") AND NATIONAL
         RESTAURANT ENTERPRISES, INC. ("ENTERPRISES") (Filed as
         exhibit 2.1 to AmeriKing's Registration Statement (No.
         333-04261) and incorporated herein by reference)......         *
 2.2++   PURCHASE AND SALE AGREEMENT, DATED SEPTEMBER 1, 1994,
         BETWEEN JARO ENTERPRISES, INC. AND AMERIKING, INC.
         (FORMERLY KNOWN AS NRE HOLDINGS, INC.) ("AMERIKING")
         (Filed as exhibit 2.2 to AmeriKing's Registration
         Statement (No. 333-04261) and incorporated herein by
         reference)............................................         *
 2.3++   PURCHASE AND SALE AGREEMENT, DATED SEPTEMBER 1, 1994,
         BETWEEN JARO RESTAURANTS, INC. AND AMERIKING (Filed as
         exhibit 2.3 to AmeriKing's Registration Statement (No.
         333-04261) and incorporated herein by reference)......         *
 2.4++   PURCHASE AND SALE AGREEMENT, DATED SEPTEMBER 1, 1994,
         BETWEEN TABOR RESTAURANTS ASSOCIATES, INC. AND
         AMERIKING (Filed as exhibit 2.4 to AmeriKing's
         Registration Statement (No. 333-04261) and
         incorporated herein by reference).....................         *
 2.5++   PURCHASE AND SALE AGREEMENT, DATED SEPTEMBER, 1, 1994,
         BETWEEN JB RESTAURANTS, INC. AND AMERIKING (Filed as
         exhibit 2.5 to AmeriKing's Registration Statement (No.
         333-04261) and incorporated herein by reference)......         *
 2.6++   PURCHASE AND SALE AGREEMENT, DATED SEPTEMBER 1, 1994,
         BETWEEN CASTLEKING, INC. AND AMERIKING (Filed as
         exhibit 2.6 to AmeriKing's Registration Statement (No.
         333-04261) and incorporated herein by reference)......         *
 2.7++   PURCHASE AND SALE AGREEMENT, DATED SEPTEMBER 1, 1994,
         BETWEEN OSBURGER, INC. AND AMERIKING (Filed as exhibit
         2.7 to AmeriKing's Registration Statement (No. 333-
         04261) and incorporated herein by reference)..........         *
 2.8++   PURCHASE AND SALE AGREEMENT, DATED SEPTEMBER 1, 1994,
         BETWEEN WHITE-OSBORN RESTAURANTS, INC. AND AMERIKING
         (Filed as exhibit 2.8 to AmeriKing's Registration
         Statement (No. 333-04261) and incorporated herein by
         reference)............................................         *
 2.9++   PURCHASE AND SALE AGREEMENT, DATED NOVEMBER 30, 1994,
         BY AND AMONG SHELDON T. FRIEDMAN, BNB LAND VENTURE,
         INC. AND ENTERPRISES (Filed as exhibit 2.9 to
         AmeriKing's Registration Statement (No. 333-04261) and
         incorporated herein by reference).....................         *
 2.10++  ASSET PURCHASE AGREEMENT, DATED JULY 5, 1995, BY AND
         AMONG DMW, INC., DANIEL L. WHITE AND AMERIKING
         COLORADO CORPORATION I (Filed as exhibit 2.10 to
         AmeriKing's Registration Statement (No. 333-04261) and
         incorporated herein by reference).....................         *
</TABLE>
<PAGE>
 
<TABLE>
<CAPTION>
                                                                  SEQUENTIALLY
 EXHIBIT                                                            NUMBERED
 NUMBER                        DESCRIPTION                            PAGE
 -------                       -----------                        ------------
 <C>     <S>                                                      <C>
 2.11++  ASSET PURCHASE AGREEMENT, DATED JULY 5, 1995, BY AND
         AMONG WSG, INC., DANIEL L. WHITE, SUSAN J. WAKEMAN,
         GEORGE ALAIZ, JR. AND AMERIKING COLORADO CORPORATION I
         (Filed as exhibit 2.11 to AmeriKing's Registration
         Statement (No. 333-04261) and incorporated herein by
         reference)............................................         *
 2.12++  PURCHASE AGREEMENT, DATED NOVEMBER 21, 1995, BY AND
         AMONG QSC, INC., THE SHAREHOLDERS OF QSC, INC. AND
         AMERIKING TENNESSEE CORPORATION I (Filed as exhibit
         2.12 to AmeriKing's Registration Statement (No. 333-
         04261) and incorporated herein by reference)..........         *
 2.13++  PURCHASE AGREEMENT, DATED NOVEMBER 21, 1995, BY AND
         AMONG RO-LANK, INC., THE SHAREHOLDERS OF RO-LANK, INC.
         AND AMERIKING TENNESSEE CORPORATION I (Filed as
         exhibit 2.13 to AmeriKing's Registration Statement
         (No. 333-04261) and incorporated herein by
         reference)............................................         *
 2.14++  PURCHASE AND SALE AGREEMENT, DATED NOVEMBER 30, 1995,
         BY AND AMONG C&N DINING, INC. AND AFFILIATES AND
         AMERIKING VIRGINIA CORPORATION I (Filed as exhibit
         2.14 to AmeriKing's Registration Statement (No. 333-
         04261) and incorporated herein by reference)..........         *
 2.15++  AMENDMENT NO. 1 TO PURCHASE AND SALE AGREEMENT, DATED
         FEBRUARY 7, 1996, BY AND AMONG C&N DINING, INC. AND
         AFFILIATES AND AMERIKING VIRGINIA CORPORATION I (Filed
         as exhibit 2.15 to AmeriKing's Registration Statement
         (No. 333-04261) and incorporated herein by
         reference)............................................         *
 2.16++  ASSET PURCHASE AGREEMENT, DATED FEBRUARY 7, 1996,
         BETWEEN THIRTY-FORTY, INC. AND AMERIKING CINCINNATI
         CORPORATION I (Filed as exhibit 2.16 to AmeriKing's
         Registration Statement (No. 333-04261) and
         incorporated herein by reference).....................         *
 2.17++  ASSET PURCHASE AGREEMENT, DATED FEBRUARY 7, 1996,
         BETWEEN HOUSTON, INC. AND AMERIKING CINCINNATI
         CORPORATION I (Filed as exhibit 2.17 to AmeriKing's
         Registration Statement (No. 333-04261) and
         incorporated herein by reference).....................         *
 2.18++  ASSET PURCHASE AGREEMENT, DATED FEBRUARY 7, 1996,
         BETWEEN FIFTH & RACE, INC. AND AMERIKING CINCINNATI
         CORPORATION I (Filed as exhibit 2.18 to AmeriKing's
         Registration Statement (No. 333-04261) and
         incorporated herein by reference)                              *
 3.1     AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF
         AMERIKING (Filed as exhibit 3.1 to AmeriKing's
         Registration Statement (No. 333-04261) and
         incorporated herein by reference).....................         *
 3.2     AMENDED AND RESTATED BYLAWS OF AMERIKING (Filed as
         exhibit 3.2 to AmeriKing's Registration Statement (No.
         333-04261) and incorporated herein by reference)......         *
 4.1     STOCKHOLDERS AGREEMENT, DATED SEPTEMBER 1, 1994, BY
         AND AMONG AMERIKING AND THE STOCKHOLDERS APPEARING ON
         THE SIGNATURE PAGES THERETO (Filed as exhibit 4.1 to
         AmeriKing's Registration Statement (No. 333-04261) and
         incorporated herein by reference).....................         *
</TABLE>
<PAGE>
 
<TABLE>
<CAPTION>
                                                                   SEQUENTIALLY
 EXHIBIT                                                             NUMBERED
 NUMBER                        DESCRIPTION                             PAGE
 -------                       -----------                         ------------
 <C>     <S>                                                       <C>
 4.2     CONSENT AND AMENDMENT NO. 1 TO STOCKHOLDERS AGREEMENT,
         DATED NOVEMBER 30, 1994, BY AND AMONG AMERIKING AND THE
         STOCKHOLDERS APPEARING ON THE SIGNATURE PAGES THERETO
         (Filed as exhibit 4.2 to AmeriKing's Registration
         Statement (No. 333-04261) and incorporated herein by
         reference).............................................         *
 4.3     CONSENT AND AMENDMENT NO. 2 TO STOCKHOLDERS AGREEMENT,
         DATED FEBRUARY 7, 1996, BY AND AMONG AMERIKING AND THE
         STOCKHOLDERS APPEARING ON THE SIGNATURE PAGES THERETO
         (Filed as exhibit 4.3 to AmeriKing's Registration
         Statement (No. 333-04261) and incorporated herein by
         reference).............................................         *
 4.4++++ AMENDED AND RESTATED STOCKHOLDERS AGREEMENT BY AND
         AMONG AMERIKING AND THE STOCKHOLDERS APPEARING ON THE
         SIGNATURE PAGES THERETO................................
 4.5     MANAGEMENT SUBSCRIPTION AGREEMENT, DATED SEPTEMBER 1,
         1994, BY AND AMONG AMERIKING, TABOR RESTAURANT
         ASSOCIATES, INC., JARO ENTERPRISES, INC., JARO
         RESTAURANTS, INC., JB RESTAURANTS, INC., CASTLEKING,
         INC., WHITE-OSBORN RESTAURANTS, INC., OSBURGER, INC.,
         LAWRENCE JARO, WILLIAM OSBORN, GARY HUBERT, JOEL
         AASEBY, DONALD STAHURSKI AND SCOTT VASATKA (Filed as
         exhibit 4.5 to AmeriKing's Registration Statement (No.
         333-04261) and incorporated herein by reference).......         *
 4.6     STOCK OPTION AGREEMENT, DATED SEPTEMBER 1, 1994,
         BETWEEN AMERIKING AND SCOTT VASATKA (Filed as exhibit
         4.6 to AmeriKing's Registration Statement (No. 333-
         04261) and incorporated herein by reference)...........         *
 4.7     STOCK OPTION AGREEMENT, DATED SEPTEMBER 1, 1994,
         BETWEEN AMERIKING AND DONALD STAHURSKI (Filed as
         exhibit 4.7 to AmeriKing's Registration Statement (No.
         333-04261) and incorporated herein by reference).......         *
 4.8     WARRANT AGREEMENT, DATED SEPTEMBER 1, 1994, BETWEEN
         AMERIKING AND THE FIRST NATIONAL BANK OF BOSTON (Filed
         as exhibit 4.8 to AmeriKing's Registration Statement
         (No. 333-04261) and incorporated herein by reference)..         *
 4.9     COMMON STOCK PURCHASE WARRANT, DATED SEPTEMBER 1, 1994,
         BETWEEN AMERIKING AND BANCBOSTON INVESTMENTS INC.
         (Filed as exhibit 4.9 to AmeriKing's Registration
         Statement (No. 333-04261) and incorporated herein by
         reference).............................................         *
 4.10    FIRST AMENDMENT TO COMMON STOCK PURCHASE WARRANT, DATED
         NOVEMBER 30, 1994 (Filed as exhibit 4.10 to AmeriKing's
         Registration Statement (No. 333-04261) and incorporated
         herein by reference)...................................         *
 4.11    SECOND AMENDMENT TO COMMON STOCK PURCHASE WARRANT,
         DATED FEBRUARY 7, 1996 (Filed as exhibit 4.11 to
         AmeriKing's Registration Statement (No. 333-04261) and
         incorporated herein by reference)......................         *
 4.12    AMENDED AND RESTATED NOTE, DATED FEBRUARY 7, 1996, FROM
         AMERIKING TO MCIT PLC IN THE AGGREGATE PRINCIPAL AMOUNT
         OF $11,000,000 (Filed as exhibit 4.12 to AmeriKing's
         Registration Statement (No. 333-04261) and incorporated
         herein by reference)...................................         *
</TABLE>
<PAGE>
 
<TABLE>
<CAPTION>
                                                                  SEQUENTIALLY
 EXHIBIT                                                            NUMBERED
 NUMBER                        DESCRIPTION                            PAGE
 -------                       -----------                        ------------
 <C>     <S>                                                      <C>
 4.13    AMENDED AND RESTATED DEFERRED LIMITED INTEREST
         GUARANTY, DATED FEBRUARY 7, 1996, FROM ENTERPRISES TO
         MCIT PLC (Filed as exhibit 4.13 to AmeriKing's
         Registration Statement (No. 333-04261) and
         incorporated herein by reference).....................         *
 4.14    AMENDED AND RESTATED NOTE, DATED FEBRUARY 7, 1996,
         FROM AMERIKING TO JARO ENTERPRISES, INC. IN THE
         AGGREGATE PRINCIPAL AMOUNT OF $1,224,000 (Filed as
         exhibit 4.14 to AmeriKing's Registration Statement
         (No. 333-04261) and incorporated herein by
         reference)............................................         *
 4.15    AMENDED AND RESTATED NOTE, DATED FEBRUARY 7, 1996,
         FROM AMERIKING TO JARO RESTAURANTS, INC. IN THE
         AGGREGATE PRINCIPAL AMOUNT OF $112,000 (Filed as
         exhibit 4.15 to AmeriKing's Registration Statement
         (No. 333-04261) and incorporated herein by
         reference)............................................         *
 4.16    AMENDED AND RESTATED NOTE, DATED FEBRUARY 7, 1996,
         FROM AMERIKING TO JB RESTAURANTS, INC. IN THE
         AGGREGATE PRINCIPAL AMOUNT OF $2,019,000 (Filed as
         exhibit 4.16 to AmeriKing's Registration Statement
         (No. 333-04261) and incorporated herein by
         reference)............................................         *
 4.17    AMENDED AND RESTATED NOTE, DATED FEBRUARY 7, 1996,
         FROM AMERIKING TO CASTLEKING, INC. IN THE AGGREGATE
         PRINCIPAL AMOUNT OF $385,769 (Filed as exhibit 4.17 to
         AmeriKing's Registration Statement (No. 333-04261) and
         incorporated herein by reference).....................         *
 4.18    AMENDED AND RESTATED NOTE, DATED FEBRUARY 7, 1996,
         FROM AMERIKING TO WHITE-OSBORN RESTAURANTS, INC. IN
         THE AGGREGATE PRINCIPAL AMOUNT OF $659,231 (Filed as
         exhibit 4.18 to AmeriKing's Registration Statement
         (No. 333-04261) and incorporated herein by
         reference)............................................         *
 4.19    SECURITIES PURCHASE AGREEMENT, DATED NOVEMBER 30,
         1994, BETWEEN AMERIKING AND BANCBOSTON INVESTMENTS,
         INC. (Filed as exhibit 4.19 to AmeriKing's
         Registration Statement (No. 333-04261) and
         incorporated herein by reference).....................         *
 4.20    COMMON STOCK PURCHASE WARRANT, DATED NOVEMBER 30,
         1994, BETWEEN AMERIKING AND BANCBOSTON INVESTMENTS,
         INC. (Filed as exhibit 4.20 to AmeriKing's
         Registration Statement (No. 333-04261) and
         incorporated herein by reference).....................         *
 4.21    JUNIOR SUBORDINATED NOTE, DATED NOVEMBER 30, 1994,
         FROM AMERIKING TO BANCBOSTON INVESTMENTS, INC. IN THE
         AGGREGATE PRINCIPAL AMOUNT OF $600,000 (Filed as
         exhibit 4.21 to AmeriKing's Registration Statement
         (No. 333-04261) and incorporated herein by
         reference)............................................         *
 4.22    SECURED PROMISSORY NOTE, DATED NOVEMBER 21, 1995, FROM
         AMERIKING TENNESSEE CORPORATION I TO BKC IN THE
         AGGREGATE PRINCIPAL AMOUNT OF $6,920,700 (Filed as
         exhibit 4.22 to AmeriKing's Registration Statement
         (No. 333-04261) and incorporated herein by
         reference)............................................         *
</TABLE>
<PAGE>
 
<TABLE>
<CAPTION>
                                                                  SEQUENTIALLY
 EXHIBIT                                                            NUMBERED
 NUMBER                        DESCRIPTION                            PAGE
 -------                       -----------                        ------------
 <C>     <S>                                                      <C>
 4.23    AMENDMENT TO SECURED PROMISSORY NOTE, DATED MAY 21,
         1996, FROM AMERIKING TENNESSEE CORPORATION I TO BKC IN
         THE AGGREGATE PRINCIPAL AMOUNT OF $6,093,067 (Filed as
         exhibit 4.23 to AmeriKing's Registration Statement
         (No. 333-04261) and incorporated herein by
         reference)............................................         *
 4.24    GUARANTY, DATED NOVEMBER 21, 1995, FROM LAWRENCE JARO
         AND WILLIAM OSBORN TO BKC (Filed as exhibit 4.24 to
         AmeriKing's Registration Statement (No. 333-04261) and
         incorporated herein by reference).....................         *
 
 
 4.25    RATIFICATION OF GUARANTY, MAY 21, 1996, FROM LAWRENCE
         JARO AND WILLIAM OSBORN TO BKC (Filed as exhibit 4.25
         to AmeriKing's Registration Statement (No. 333-04261)
         and incorporated herein by reference).................         *
 4.26    PROMISSORY NOTE, DATED NOVEMBER 29, 1995, FROM
         AMERIKING COLORADO CORPORATION I TO FRANCHISE
         ACCEPTANCE CORPORATION LIMITED IN THE AGGREGATE
         PRINCIPAL AMOUNT OF $1,865,000 (Filed as exhibit 4.26
         to AmeriKing's Registration Statement (No. 333-04261)
         and incorporated herein by reference).................         *
 4.27    AMENDMENT TO PROMISSORY NOTE, DATED DECEMBER 14, 1995,
         FROM AMERIKING COLORADO CORPORATION I TO FRANCHISE
         ACCEPTANCE CORPORATION LIMITED (Filed as exhibit 4.27
         to AmeriKing's Registration Statement (No. 333-04261)
         and incorporated herein by reference).................         *
 4.28    COMMON STOCK PURCHASE WARRANT, DATED FEBRUARY 7, 1996,
         FROM AMERIKING TO PMI MEZZANINE FUND, L.P. (Filed as
         exhibit 4.28 to AmeriKing's Registration Statement
         (No. 333-04261) and incorporated herein by
         reference)............................................         *
 4.29    SENIOR SUBORDINATED NOTE, DATED FEBRUARY 7, 1996, FROM
         ENTERPRISES TO PMI MEZZANINE FUND, L.P IN THE
         AGGREGATE PRINCIPAL AMOUNT OF $15,000,000. (Filed as
         exhibit 4.29 to AmeriKing's Registration Statement
         (No. 333-04261) and incorporated herein by
         reference)............................................         *
 4.30    SUBORDINATED GUARANTY, DATED FEBRUARY 7, 1996, FROM
         AMERIKING VIRGINIA CORPORATION I AND AMERIKING
         CINCINNATI CORPORATION I TO PMI MEZZANINE FUND, L.P.
         (Filed as exhibit 4.30 to AmeriKing's Registration
         Statement (No. 333-04261) and incorporated herein by
         reference)............................................         *
 4.31    SECOND AMENDED AND RESTATED REVOLVING CREDIT NOTE,
         DATED FEBRUARY 7, 1996, FROM ENTERPRISES TO THE FIRST
         NATIONAL BANK OF BOSTON, THE OTHER LENDING
         INSTITUTIONS LISTED ON SCHEDULE 1 THERETO, AND THE
         FIRST NATIONAL BANK OF BOSTON, AS AGENT (Filed as
         exhibit 4.31 to AmeriKing's Registration Statement
         (No. 333-04261) and incorporated herein by
         reference)............................................         *
 4.32    SECOND AMENDED AND RESTATED TERM LOAN A NOTE, DATED
         FEBRUARY 7, 1996, FROM ENTERPRISES TO THE FIRST
         NATIONAL BANK OF BOSTON, THE OTHER LENDING
         INSTITUTIONS LISTED ON SCHEDULE 1 THERETO, AND THE
         FIRST NATIONAL BANK OF BOSTON, AS AGENT (Filed as
         exhibit 4.32 to AmeriKing's Registration Statement
         (No. 333-04261) and incorporated herein by
         reference)............................................         *
</TABLE>
<PAGE>
 
<TABLE>
<CAPTION>
                                                                  SEQUENTIALLY
 EXHIBIT                                                            NUMBERED
 NUMBER                        DESCRIPTION                            PAGE
 -------                       -----------                        ------------
 <C>     <S>                                                      <C>
 4.33    SECOND AMENDED AND RESTATED TERM LOAN B NOTE, DATED
         FEBRUARY 7, 1996, FROM ENTERPRISES TO THE FIRST
         NATIONAL BANK OF BOSTON, THE OTHER LENDING
         INSTITUTIONS LISTED ON SCHEDULE 1 THERETO, AND THE
         FIRST NATIONAL BANK OF BOSTON, AS (Filed as exhibit
         4.33 to AmeriKing's Registration Statement (No. 333-
         04261) and incorporated herein by reference)..........         *
 4.34    LIMITED GUARANTY, DATED SEPTEMBER 1, 1994, FROM
         AMERIKING TO THE FIRST NATIONAL BANK OF BOSTON, THE
         OTHER LENDING INSTITUTIONS LISTED ON SCHEDULE 1
         THERETO, AND THE FIRST NATIONAL BANK OF BOSTON, AS
         AGENT (Filed as exhibit 4.34 to AmeriKing's
         Registration Statement (No. 333-04261) and
         incorporated herein by reference).....................         *
 4.35    GUARANTY, DATED FEBRUARY 7, 1996, FROM AMERIKING
         VIRGINIA CORPORATION I AND AMERIKING CINCINNATI
         CORPORATION I TO THE FIRST NATIONAL BANK OF BOSTON,
         THE OTHER LENDING INSTITUTIONS LISTED ON SCHEDULE 1
         THERETO, AND THE FIRST NATIONAL BANK OF BOSTON, AS
         AGENT (Filed as exhibit 4.35 to AmeriKing's
         Registration Statement (No. 333-04261) and
         incorporated herein by reference).....................         *
 4.36    UNCONDITIONAL GUARANTY OF PAYMENT AND PERFORMANCE,
         DATED FEBRUARY 7, 1996, FROM ENTERPRISES TO FFCA
         ACQUISITION CORPORATION (Filed as exhibit 4.36 to
         AmeriKing's Registration Statement (No. 333-04261) and
         incorporated herein by reference).....................         *
 4.37    FORM OF AMENDMENT NO. 1 TO COMMON STOCK PURCHASE
         WARRANT FROM AMERIKING TO PMI MEZZANINE FUND, L.P.....         *
 4.38    INDENTURE BETWEEN AMERIKING AND TRUSTEE WITH RESPECT
         TO SENIOR NOTES (Filed as exhibit 4.38 to AmeriKing's
         Registration Statement (No. 333-04261) and
         incorporated herein by reference).....................         *
 4.39    FORM OF SENIOR NOTES (ATTACHED TO EXHIBIT 4.38).......
 4.40    INDENTURE BETWEEN AMERIKING AND TRUSTEE WITH RESPECT
         TO EXCHANGE DEBENTURES (Filed as exhibit 4.40 to
         AmeriKing's Registration Statement (No. 333-04261) and
         incorporated herein by reference).....................         *
 4.41    INTENTIONALLY OMITTED.................................
 4.42    FORM OF EXCHANGE DEBENTURES (ATTACHED TO EXHIBIT
         4.40).................................................
 4.43    PROMISSORY NOTE, DATED JULY 18, 1996, FROM AMERIKING
         TENNESSEE CORPORATION I TO FRANCHISE ACCEPTANCE
         CORPORATION LIMITED IN THE AGGREGATE PRINCIPAL AMOUNT
         OF $6,100,000 (Filed as exhibit 4.43 to AmeriKing's
         Registration Statement (No. 333-04261) and
         incorporated herein by reference).....................         *
 4.44    CERTIFICATE OF DESIGNATION RELATING TO THE SENIOR
         PREFERRED STOCK (Filed as exhibit 4.44 to AmeriKing's
         Registration Statement (No. 333-04261) and
         incorporated herein by reference).....................         *
</TABLE>
<PAGE>
 
<TABLE>
<CAPTION>
                                                                  SEQUENTIALLY
 EXHIBIT                                                            NUMBERED
  NUMBER                       DESCRIPTION                            PAGE
 -------                       -----------                        ------------
 <C>      <S>                                                     <C>
 4.45     PROMISSORY NOTE, DATED JULY 18, 1996, FROM AMERIKING
          TENNESSEE CORPORATION I TO FRANCHISE ACCEPTANCE
          CORPORATION LIMITED IN THE AGGREGATE PRINCIPAL AMOUNT
          OF $900,000 (Filed as exhibit 4.45 to AmeriKing's
          Registration Statement (No. 333-04261) and
          incorporated herein by reference)....................         *
 4.46++++ AMENDMENT NO. 1 TO STOCK OPTION AGREEMENT BY AND
          AMONG AMERIKING, SCOTT VASATKA AND DONALD STAHURSKI..
 4.47++++ AMENDMENT NO.1 TO MANAGEMENT SUBSCRIPTION AGREEMENT..
 9.1      JARO PROXY AGREEMENT, DATED SEPTEMBER 1, 1994, BY AND
          AMONG LAWRENCE JARO, TABOR RESTAURANT ASSOCIATES,
          INC., JARO ENTERPRISES, INC., JARO RESTAURANTS, INC.
          AND JB RESTAURANTS, INC. (Filed as exhibit 9.1 to
          AmeriKing's Registration Statement (No. 333-04261)
          and incorporated herein by reference)................         *
 9.2      OSBORN PROXY AGREEMENT, DATED SEPTEMBER 1, 1994, BY
          AND AMONG WILLIAM OSBORN, CASTLEKING, INC., OSBURGER,
          INC. AND WHITE-OSBORN, INC. (Filed as exhibit 9.2 to
          AmeriKing's Registration Statement (No. 333-04261)
          and incorporated herein by reference)................         *
 10.1     SECOND AMENDED AND RESTATED REVOLVING CREDIT AND TERM
          LOAN AGREEMENT, DATED FEBRUARY 7, 1996, BY AND AMONG
          AMERIKING, ENTERPRISES, THE FIRST NATIONAL BANK OF
          BOSTON, THE OTHER LENDING INSTITUTIONS LISTED ON
          SCHEDULE 1 THERETO, AND THE FIRST NATIONAL BANK OF
          BOSTON, AS AGENT (Filed as exhibit 10.1 to
          AmeriKing's Registration Statement (No. 333-04261)
          and incorporated herein by reference)................         *
 10.2     SECURITY AGREEMENT, DATED SEPTEMBER 1, 1994, BY AND
          AMONG ENTERPRISES AND THE FIRST NATIONAL BANK OF
          BOSTON, THE OTHER LENDING INSTITUTIONS LISTED ON
          SCHEDULE 1 THERETO, AND THE FIRST NATIONAL BANK OF
          BOSTON, AS AGENT (Filed as exhibit 10.2 to
          AmeriKing's Registration Statement (No. 333-04261)
          and incorporated herein by reference)................         *
 10.3     AMENDMENT TO SECURITY AGREEMENT, DATED FEBRUARY 7,
          1996, BY AND AMONG ENTERPRISES AND THE FIRST NATIONAL
          BANK OF BOSTON, THE OTHER LENDING INSTITUTIONS LISTED
          ON SCHEDULE 1 THERETO, AND THE FIRST NATIONAL BANK OF
          BOSTON, AS AGENT (Filed as exhibit 10.3 to
          AmeriKing's Registration Statement (No. 333-04261)
          and incorporated herein by reference)................         *
 10.4     STOCK PLEDGE AGREEMENT, DATED SEPTEMBER 1, 1994, BY
          AND AMONG AMERIKING AND THE FIRST NATIONAL BANK OF
          BOSTON, THE OTHER LENDING INSTITUTIONS LISTED ON
          SCHEDULE 1 THERETO, AND THE FIRST NATIONAL BANK OF
          BOSTON, AS AGENT (Filed as exhibit 10.4 to
          AmeriKing's Registration Statement (No. 333-04261)
          and incorporated herein by reference)................         *
</TABLE>
<PAGE>
 
<TABLE>
<CAPTION>
                                                                  SEQUENTIALLY
 EXHIBIT                                                            NUMBERED
 NUMBER                        DESCRIPTION                            PAGE
 -------                       -----------                        ------------
 <C>     <S>                                                      <C>
 10.5    AMENDMENT TO STOCK PLEDGE AGREEMENT, DATED FEBRUARY 7,
         1996, BY AND AMONG AMERIKING AND THE FIRST NATIONAL
         BANK OF BOSTON, THE OTHER LENDING INSTITUTIONS LISTED
         ON SCHEDULE 1 THERETO, AND THE FIRST NATIONAL BANK OF
         BOSTON, AS AGENT (Filed as exhibit 10.5 to AmeriKing's
         Registration Statement (No. 333-04261) and
         incorporated herein by reference).....................         *
 10.6    SECURITY AGREEMENT, DATED FEBRUARY 7, 1996, BY AND
         AMONG AMERIKING VIRGINIA CORPORATION I, AMERIKING
         CINCINNATI CORPORATION I AND THE FIRST NATIONAL BANK
         OF BOSTON (Filed as exhibit 10.6 to AmeriKing's
         Registration Statement (No. 333-04261) and
         incorporated herein by reference).....................       *
 10.7    STOCK PLEDGE AGREEMENT, DATED FEBRUARY 7, 1996, BY AND
         AMONG ENTERPRISES, AMERIKING VIRGINIA CORPORATION I,
         AMERIKING CINCINNATI CORPORATION I AND THE FIRST
         NATIONAL BANK OF BOSTON (Filed as exhibit 10.7 to
         AmeriKing's Registration Statement (No. 333-04261) and
         incorporated herein by reference).....................       *
 10.8    AMENDED AND RESTATED PURCHASE AGREEMENT, DATED
         FEBRUARY 7, 1996, BETWEEN AMERIKING AND MCIT PLC
         (Filed as exhibit 10.8 to AmeriKing's Registration
         Statement (No. 333-04261) and incorporated herein by
         reference)............................................       *
 10.9    PLEDGE AGREEMENT, DATED SEPTEMBER 1, 1994, BETWEEN
         AMERIKING AND MCIT PLC (Filed as exhibit 10.9 to
         AmeriKing's Registration Statement (No. 333-04261) and
         incorporated herein by reference).....................       *
 10.10   SUBORDINATION AGREEMENT, DATED SEPTEMBER 1, 1994, BY
         AND AMONG BKC, MCIT PLC AND AMERIKING (Filed as
         exhibit 10.10 to AmeriKing's Registration Statement
         (No. 333-04261) and incorporated herein by
         reference)............................................       *
 10.11   AMENDMENT AND CONSENT NO. 1 TO SECURITIES PURCHASE
         AGREEMENT, DATED FEBRUARY 7, 1996, BETWEEN AMERIKING
         AND BANCBOSTON INVESTMENTS, INC. (Filed as exhibit
         10.11 to AmeriKing's Registration Statement (No. 333-
         04261) and incorporated herein by reference)..........       *
 10.12   INTERCREDITOR AGREEMENT, DATED FEBRUARY 7, 1996, BY
         AND AMONG BKC, AMERIKING VIRGINIA CORPORATION I,
         AMERIKING CINCINNATI CORPORATION I, LAWRENCE JARO,
         WILLIAM OSBORN, GARY HUBERT, ENTERPRISES, AMERIKING
         AND THE FIRST NATIONAL BANK OF BOSTON (Filed as
         exhibit 10.12 to AmeriKing's Registration Statement
         (No. 333-04261) and incorporated herein by
         reference)............................................       *
 10.13   STOCK PLEDGE AGREEMENT, DATED NOVEMBER 21, 1995,
         BETWEEN ENTERPRISES AND BKC (Filed as exhibit 10.13 to
         AmeriKing's Registration Statement (No. 333-04261) and
         incorporated herein by reference).....................       *
 10.14   RATIFICATION OF STOCK PLEDGE AGREEMENT, DATED MAY 21,
         1996, BETWEEN ENTERPRISES AND BKC (Filed as exhibit
         10.14 to AmeriKing's Registration Statement (No. 333-
         04261) and incorporated herein by reference)..........       *
</TABLE>
<PAGE>
 
<TABLE>
<CAPTION>
                                                                   SEQUENTIALLY
 EXHIBIT                                                             NUMBERED
 NUMBER                        DESCRIPTION                             PAGE
 -------                       -----------                         ------------
 <C>     <S>                                                       <C>
 10.15   STOCK PLEDGE AGREEMENT, DATED NOVEMBER 21, 1995,
         BETWEEN ENTERPRISES AND THE FIRST NATIONAL BANK OF
         BOSTON, THE OTHER LENDING INSTITUTIONS LISTED ON
         SCHEDULE 1 THERETO, AND THE FIRST NATIONAL BANK OF
         BOSTON, AS AGENT (Filed as exhibit 10.15 to AmeriKing's
         Registration Statement (No. 333-04261) and incorporated
         herein by reference)...................................       *
 10.16   NOTE PURCHASE AGREEMENT, DATED FEBRUARY 7, 1996, BY AND
         AMONG AMERIKING, ENTERPRISES AND PMI MEZZANINE FUND,
         L.P. (Filed as exhibit 10.16 to AmeriKing's
         Registration Statement (No. 333-04261) and incorporated
         herein by reference)...................................       *
 10.17   FORM OF AMENDMENT NO. 1 TO NOTE PURCHASE AGREEMENT, BY
         AND AMONG AMERIKING, ENTERPRISES AND PMI MEZZANINE
         FUND, L.P..............................................       *
 10.18   SUBORDINATION AGREEMENT, DATED FEBRUARY 7, 1996, BY AND
         AMONG AMERIKING, ENTERPRISES, AMERIKING VIRGINIA
         CORPORATION I, AMERIKING CINCINNATI CORPORATION I,
         AMERIKING TENNESSEE CORPORATION I, AMERIKING COLORADO
         CORPORATION I, LAWRENCE JARO, WILLIAM OSBORN, GARY
         HUBERT AND BKC (Filed as exhibit 10.18 to AmeriKing's
         Registration Statement (No. 333-04261) and incorporated
         herein by reference)...................................       *
 10.19   SALE-LEASEBACK AGREEMENT, DATED FEBRUARY 7, 1996, BY
         AND AMONG AMERIKING VIRGINIA CORPORATION I, AMERIKING
         TENNESSEE CORPORATION I AND FFCA ACQUISITION
         CORPORATION (Filed as exhibit 10.19 to AmeriKing's
         Registration Statement (No. 333-04261) and incorporated
         herein by reference)...................................         *
 10.20   LEASE, DATED FEBRUARY 7, 1996, BY AND AMONG AMERIKING
         VIRGINIA CORPORATION I, AMERIKING TENNESSEE CORPORATION
         I AND FFCA ACQUISITION CORPORATION (Filed as exhibit
         10.20 to AmeriKing's Registration Statement (No. 333-
         04261) and incorporated herein by reference)...........         *
 10.21   FORM OF FRANCHISE AGREEMENT BETWEEN BKC AND FRANCHISEE
         (Filed as exhibit 10.21 to AmeriKing's Registration
         Statement (No. 333-04261) and incorporated herein by
         reference).............................................         *
 10.22   SCHEDULE OF AMERIKING FRANCHISE AGREEMENTS (Filed as
         exhibit 10.22 to AmeriKing's Registration Statement
         (No. 333-04261) and incorporated herein by reference)..         *
 10.23   FORM OF LEASE AGREEMENT BETWEEN BKC AND LESSEE (Filed
         as exhibit 10.23 to AmeriKing's Registration Statement
         (No. 333-04261) and incorporated herein by reference)..         *
 10.24   SCHEDULE OF AMERIKING LEASE AGREEMENTS (Filed as
         exhibit 10.24 to AmeriKing's Registration Statement
         (No. 333-04261) and incorporated herein by reference)..         *
</TABLE>
<PAGE>
 
<TABLE>
<CAPTION>
                                                                  SEQUENTIALLY
 EXHIBIT                                                            NUMBERED
 NUMBER                        DESCRIPTION                            PAGE
 -------                       -----------                        ------------
 <C>     <S>                                                      <C>
 10.25   FORM OF GUARANTEE, INDEMNIFICATION AND ACKNOWLEDGMENT
         OF BKC FRANCHISE AGREEMENT (Filed as exhibit 10.25 to
         AmeriKing's Registration Statement (No. 333-04261) and
         incorporated herein by reference).....................         *
 10.26   FORM OF GUARANTEE, INDEMNIFICATION AND ACKNOWLEDGMENT
         OF BKC LEASE AGREEMENT (Filed as exhibit 10.26 to
         AmeriKing's Registration Statement (No. 333-04261) and
         incorporated herein by reference).....................         *
 10.27   CAPITAL EXPENDITURE AGREEMENT, DATED SEPTEMBER 1,
         1994, BY AND AMONG AMERIKING, ENTERPRISES AND BKC
         (Filed as exhibit 10.27 to AmeriKing's Registration
         Statement (No. 333-04261) and incorporated herein by
         reference)............................................         *
 10.28   CAPITAL EXPENDITURE AGREEMENT, DATED NOVEMBER 21,
         1995, BY AND AMONG ENTERPRISES, AMERIKING TENNESSEE
         CORPORATION I AND BKC (Filed as exhibit 10.28 to
         AmeriKing's Registration Statement (No. 333-04261) and
         incorporated herein by reference).....................         *
 10.29   LETTER AGREEMENT, DATED FEBRUARY 7, 1996, BETWEEN
         ENTERPRISES AND BKC (Filed as exhibit 10.29 to
         AmeriKing's Registration Statement (No. 333-04261) and
         incorporated herein by reference).....................         *
 10.30   NAPARLO DEVELOPMENT AGREEMENT, DATED FEBRUARY 7, 1996,
         BETWEEN AMERIKING VIRGINIA CORPORATION I AND JOSEPH J.
         NAPARLO (Filed as exhibit 10.30 to AmeriKing's
         Registration Statement (No. 333-04261) and
         incorporated herein by reference).....................         *
 10.31   MANAGEMENT CONSULTING AGREEMENT, DATED SEPTEMBER 1,
         1994, BY AND AMONG TJC MANAGEMENT CORPORATION,
         AMERIKING AND ENTERPRISES (Filed as exhibit 10.31 to
         AmeriKing's Registration Statement (No. 333-04261) and
         incorporated herein by reference).....................         *
 10.32   INTENTIONALLY OMITTED.................................
 10.33   INTERCOMPANY MANAGEMENT CONSULTING AGREEMENT, DATED
         SEPTEMBER 1, 1994 BETWEEN ENTERPRISES AND AMERIKING
         (Filed as exhibit 10.33 to AmeriKing's Registration
         Statement (No. 333-04261) and incorporated herein by
         reference)............................................         *
 10.34   AMENDED AND RESTATED TAX SHARING AGREEMENT, DATED
         FEBRUARY 7, 1996, BETWEEN ENTERPRISES AND AMERIKING
         (Filed as exhibit 10.34 to AmeriKing's Registration
         Statement (No. 333-04261) and incorporated herein by
         reference)............................................         *
 10.35   EMPLOYMENT AND NON-INTERFERENCE AGREEMENT, DATED
         SEPTEMBER 1, 1994, BETWEEN LAWRENCE JARO AND
         ENTERPRISES (Filed as exhibit 10.35 to AmeriKing's
         Registration Statement (No. 333-04261) and
         incorporated herein by reference).....................         *
 10.36   EMPLOYMENT AND NON-INTERFERENCE AGREEMENT, DATED
         SEPTEMBER 1, 1994, BETWEEN WILLIAM OSBORN AND
         ENTERPRISES (Filed as exhibit 10.36 to AmeriKing's
         Registration Statement (No. 333-04261) and
         incorporated herein by reference).....................         *
</TABLE>
<PAGE>
 
<TABLE>
<CAPTION>
                                                                 SEQUENTIALLY
  EXHIBIT                                                          NUMBERED
  NUMBER                        DESCRIPTION                          PAGE
  -------                       -----------                      ------------
 <C>       <S>                                                   <C>
 10.37     EMPLOYMENT AND NON-INTERFERENCE AGREEMENT, DATED
           SEPTEMBER 1, 1994, BETWEEN GARY HUBERT AND
           ENTERPRISES (Filed as exhibit 10.37 to AmeriKing's
           Registration Statement (No. 333-04261) and
           incorporated herein by reference)...................        *
 10.38     EMPLOYMENT AND NON-INTERFERENCE AGREEMENT, DATED
           SEPTEMBER 1, 1994, BETWEEN JOEL AASEBY AND
           ENTERPRISES (Filed as exhibit 10.38 to AmeriKing's
           Registration Statement (No. 333-04261) and
           incorporated herein by reference)...................        *
 10.39     EMPLOYMENT AND NON-INTERFERENCE AGREEMENT, DATED
           SEPTEMBER 1, 1994, BETWEEN SCOTT VASATKA AND
           ENTERPRISES (Filed as exhibit 10.39 to AmeriKing's
           Registration Statement (No. 333-04261) and
           incorporated herein by reference)...................        *
 10.40     INTENTIONALLY OMITTED...............................
 10.41     FORM OF INDEMNIFICATION AGREEMENT BY AND AMONG
           AMERIKING AND EACH OF THE SIGNATORIES TO THIS
           REGISTRATION STATEMENT (Filed as exhibit 10.41 to
           AmeriKing's Registration Statement (No. 333-04261)
           and incorporated herein by reference)...............        *
 10.42     INTENTIONALLY OMITTED...............................
 10.43     INTENTIONALLY OMITTED...............................
 10.44     LEASE AGREEMENT FOR WESTCHESTER, ILLINOIS
           HEADQUARTERS (Filed as exhibit 10.44 to AmeriKing's
           Registration Statement (No. 333-04261) and
           incorporated herein by reference)...................        *
 10.45     LOAN AND SECURITY AGREEMENT, DATED NOVEMBER 29,
           1995, BETWEEN AMERIKING COLORADO CORPORATION I AND
           FRANCHISE ACCEPTANCE CORPORATION LIMITED (Filed as
           exhibit 10.45 to AmeriKing's Registration Statement
           (No. 333-04261) and incorporated herein by
           reference)..........................................        *
 10.46     LOAN AND SECURITY AGREEMENT, DATED JULY 21, 1996,
           BETWEEN AMERIKING TENNESSEE CORPORATION I AND
           FRANCHISE ACCEPTANCE CORPORATION LIMITED (Filed as
           exhibit 10.46 to AmeriKing's Registration Statement
           (No. 333-04261) and incorporated herein by
           reference)..........................................        *
 10.47     FORM OF INTERCREDITOR AGREEMENT BY AND AMONG BKC,
           AMERIKING, AND THE TRUSTEE AS REPRESENTATIVE OF THE
           HOLDERS OF SENIOR NOTES UNDER THE INDENTURE
           (ATTACHED TO EXHIBIT 4.38)..........................        *
 10.48++++ RESTATED EMPLOYMENT AND NON-INTERFERENCE AGREEMENT
           BETWEEN WILLIAM OSBORN AND ENTERPRISES..............
 10.49++++ RECAPITALIZATION AGREEMENT AMONG AMERIKING AND THE
           STOCKHOLDERS APPEARING ON THE SIGNATURE PAGES
           THERETO.............................................
 10.50     MEMORANDUM OF UNDERSTANDING BETWEEN BKC AND THE
           COMPANY (Filed as exhibit 10.50 to AmeriKing's
           Registration Statement (No. 333-04261) and
           incorporated herein by reference)...................        *
</TABLE>
<PAGE>
 
<TABLE>
<CAPTION>
                                                                  SEQUENTIALLY
 EXHIBIT                                                            NUMBERED
 NUMBER                        DESCRIPTION                            PAGE
 -------                       -----------                        ------------
 <C>     <S>                                                      <C>
 10.51   AMENDMENT TO SECOND AMENDED AND RESTATED REVOLVING
         CREDIT AND LOAN AGREEMENT, DATED MAY 14, 1996, BY AND
         AMONG AMERIKING, ENTERPRISES, THE FIRST NATIONAL BANK
         OF BOSTON, THE OTHER LENDING INSTITUTIONS LISTED ON
         SCHEDULE I THERETO AND THE FIRST NATIONAL BANK OF
         BOSTON, AS AGENT......................................
 10.52   ASSIGNMENT AND ACCEPTANCE DATED MAY 14, 1996, BY AND
         AMONG AMERIKING, ENTERPRISES, THE FIRST NATIONAL BANK
         OF BOSTON AND THE OTHER LENDING INSTITUTIONS, LISTED
         THERETO AND THE FIRST NATIONAL BANK OF BOSTON, AS
         AGENT.................................................
 10.53   FORM OF OPERATING AGREEMENT BY AND AMONG BKC,
         AMERIKING ENTERPRISES, AMERIKING COLORADO CORPORATION
         I, AMERIKING ILLINOIS CORPORATION I, AMERIKING
         TENNESSEE CORPORATION I, AMERIKING VIRGINIA
         CORPORATION I AND AMERIKING CINCINNATI CORPORATION I..
 11++++  STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE.......
 12++++  STATEMENTS RE: COMPUTATION OF RATIOS..................
 21      SUBSIDIARIES OF AMERIKING (Filed as exhibit 10.21 to
         AmeriKing's Registration Statement (No. 333-04261) and
         incorporated herein by reference).....................         *
 23.1    CONSENT OF MAYER, BROWN & PLATT (Filed as exhibit 23.1
         to AmeriKing's Registration Statement (No. 333-04261)
         and incorporated herein by reference).................         *
 23.2    CONSENT OF DELOITTE & TOUCHE (Filed as exhibit 23.2 to
         AmeriKing's Registration Statement (No. 333-04261) and
         incorporated herein by reference).....................         *
 24++++  POWER OF ATTORNEY.....................................
 25      T-1 FOR EXCHANGE DEBENTURE INDENTURE..................         *
 26      T-1 FOR SENIOR NOTE INDENTURE.........................         *
 27++++  FINANCIAL DATA SCHEDULE...............................
</TABLE>
--------
*    Previously filed.
++   The schedules and exhibits to these agreements have not been filed
     pursuant to Item 601(b)(2) of Regulation S-K. Such schedules and exhibits
     will be filed supplementally upon the request of the Securities and
     Exchange Commission.
++++Superseding exhibit.