By Jacqueline M. Graves

(FORTUNE Magazine) – More evidence that bigger isn't always better: While Walt Disney's huge new theme parks have run into major snags -- Euro Disneyland is hemorrhaging, and Virginians are up in arms over Disney's America, a proposed park in Prince William County that will include Civil War reenactments -- a small local player is meeting with great success. Mountasia Entertainment International, headquartered in Atlanta, is opening one small amusement park after another and making money on each of them. It now owns 26 parks, mostly in the South, and is adding six more this year, including ones in Los Angeles, Las Vegas, and New Jersey. The four- to five-acre parks offer miniature golf, bumper boats, go-cart race tracks, batting cages, and indoor rollerblading rinks. Co-founders Scott and Juli Demerau have also struck a deal with Sega that lets them exhibit the hottest new videogames in Mountasia's family-style arcades. This has translated into sales and profits that Jerry Levine, director of research for Commonwealth Associates, estimates will grow 40% annually for the next two years. The company went public last November. The Demeraus, who met at Michigan's Ferris State College, pooled their savings to open their first business, a minigolf course, in Mobile, Alabama, in 1986. After only three months, they were able to afford the land for their next two parks, setting the parameters they still apply: near cities with populations of at least 200,000 to take advantage of neighborhood traffic. Mountasia's visitors generally live 15 to 20 minutes away, stay about two hours, and pay for each attraction instead of a single gate admission, so that a family of four can get away with spending only $40 on a visit. The parks usually stay open from 10 a.m. until midnight, a 14-hour window. Says Juli Demerau, 35: " We want people to come frequently rather than save up three years for a big vacation." Adds Scott, 32: " That's the real beauty of our business. It's all cash, no receivables. We can generate cash-flow profits in month one and pay cash dividends 60 to 90 days after opening."