What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2022-01-14 compared with 2021-01-15 · 596 added, 603 removed, 62 unchanged (95% of the section changed)

An investment in our common

stock involves a high degree of risk.

These risks should be considered carefully with the uncertainties described below, and all

other information included in this Annual Report on Form 10-K, before deciding whether to purchase our common stock.

risks and uncertainties not currently known to management or that management currently deems immaterial and therefore not referenced

herein, may also become material and may harm our business, financial condition or results of operations.

The occurrence of any

of the following risks could harm our business, financial condition and results of operations.

The trading price of our common

stock could decline due to any of these risks and uncertainties and you may lose part or all of your investment.

Certain statements in this

report contain forward-looking information.

In general, forward-looking statements include estimates of future revenues, cash flow,

capital expenditures, or other financial items and assumptions underlying any of the foregoing.

Forward-looking statements reflect

management’s current expectations regarding future events and use words such as “anticipate”, “believe”,

“expect”, “may”, “will”

and other similar terminology.

These statements speak only as of the

date they were made and involve a number of risks and uncertainties that could cause actual results to differ materially from those

expressed in the forward-looking statements.

Several factors, many beyond our control, could cause actual results to differ materially

from management’s expectations.

New risks and uncertainties arise from time to time, and we cannot predict when they may

arise or how they may affect us.

We assume no obligation to update any forward-looking statements after the date of this report

as a result of new information, future events or other developments, except as required by applicable laws and regulations.

The Novel Coronavirus (COVID-19)

Pandemic Has Had A Significant Impact On Our Operations Since March 2020 And Could Materially And Adversely Affect Our Future Business

And Financial Results.

global pandemic caused by the novel coronavirus (COVID-19 virus) has and will continue to materially and adversely affect our restaurant

business for what may be a prolonged period of time.

This damage and disruption has resulted from events and factors that were

impossible for us to predict and are beyond our control.

In the United States, as well as globally, individuals are being encouraged

to practice social distancing, restricted from gathering in groups, and in some areas are restricted from non-essential movements

outside of their homes.

In compliance with government directives from time to time, we temporarily (i) shifted our restaurant

operations to a take-out or delivery only operating model;

(ii) reduced the operating hours of our retail package stores;

laid off a significant number of employees;

and (iv) substantially modified our corporate operations to comply with social distancing

requirements.

As a result, and despite experiencing increased sales and traffic at certain of our retail package liquor stores,

these changes caused by the COVID-19 pandemic materially adversely affected our results of operations for our fiscal year 2020

and will, in all likelihood, impact our results of operations, liquidity and/or financial condition for our fiscal year 2021, particularly

if further government directives are put in place for a significant amount of time.

COVID-19 pandemic’s impact on the economy in general, globally, nationally and locally, could also adversely affect our guests’

financial condition, resulting in reduced spending at our restaurants and package liquor stores.

The COVID-19 pandemic and these

responses have affected and will continue to adversely affect our guest traffic, sales and operating costs and we cannot predict

how long the pandemic will last or what other government responses may occur.

Moreover, once restrictions are lifted, it is unclear

whether guests will be comfortable dining out and, if so, how quickly guests will return to our restaurants, which may be a function

of continued concerns over safety and/or depressed consumer sentiment due to adverse economic conditions, including job losses,

and other factors that are beyond our control.

Any failure of consumers to return to pre-pandemic dining patterns could have a

long-term material adverse impact on us and our future prospects.

equity markets in the United States have been extremely volatile due to the COVID-19 pandemic and our stock price has fluctuated

significantly and may continue to do so.

If the business interruptions caused by COVID-19 continue indefinitely or last longer

than we expect, we may need to seek other sources of liquidity.

The COVID-19 pandemic has created significant disruption and extreme

volatility in global capital markets and is adversely affecting the availability of liquidity generally in the credit markets,

and there can be no guarantee that additional liquidity will be readily available on favorable terms, especially the longer the

COVID-19 pandemic lasts, or available at all.

In the second quarter of fiscal 2020, our Board of Directors voted to cancel a previously

declared cash dividend due to uncertainty surrounding the duration of closures of our dining rooms and other restrictions mandated

by state and local governments in response to COVID-19.

Additionally, certain of our restaurants have been further disrupted when

an employee has been diagnosed with COVID-19 or exposed to a person with a confirmed positive diagnosis of COVID-19.

an employee has been diagnosed with COVID-19, our policy requires quarantine of some or all of a restaurant’s or store’s

employees and disinfection of the restaurant or store facilities.

Additionally, if an employee has direct contact with a friend

or family member with a confirmed positive diagnosis of COVID-19, such employee must exclude himself or herself from work for a

certain period of time.

If a significant percentage of our workforce is unable to work, whether because of illness, quarantine,

limitations on travel or other government restrictions in connection with COVID-19, our operations will be negatively impacted,

potentially materially adversely affecting our liquidity, financial condition or results of operations.

If an outbreak is traced

to one or more of our locations, it could impact our reputation and subject us to legal claims.

have not experienced any significant issues related to suppliers;

however, our suppliers could be adversely impacted by the COVID-19

If our suppliers’

employees are unable to work, whether because of illness, quarantine, limitations on travel or

other government restrictions in connection with COVID-19, or if the supply chain is disrupted for any other reason such as travel

limitations and other restrictions on commerce, we could face shortages of food items or other supplies at our restaurants and

our operations and sales could be adversely impacted by such supply interruptions.

the significant uncertainty as to our ability to increase sales to levels we achieved before the COVID-19 pandemic based on aforementioned

uncertainties and other known and unknown risks related to the pandemic, refer to Part I, Item 1 –

Business, Part II, Item

7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations discussions on Liquidity for further

Additionally, the impact of COVID-19, and the volatile regional and global economic conditions stemming from the pandemic,

may also precipitate or exacerbate other risks discussed in this Item 1A - Risk Factors and elsewhere in this report, any of which

could have a material effect on us.

This situation is changing rapidly and additional effects may arise that we are not presently

aware of or that we currently do not consider to present significant risks to our operations.

If we are not able to respond to

and manage the impact of such events effectively, our business and financial condition will be negatively impacted.

Our Sales and Profit Growth Could

Be Adversely Affected If Comparable Restaurant Sales Increases Are Less Than We Expect, and We May Not Successfully Increase Comparable

Restaurant Sales or They May Decrease.

While future sales

growth will depend substantially on our opening new restaurants, changes in comparable restaurant sales (which represent the change

in period-over-period sales for restaurants) will also affect our sales growth and will continue to be a critical factor affecting

profit growth.

This is because the profit margin on comparable restaurant sales is generally higher, as comparable restaurant sales

increases enable fixed costs to be spread over a higher sales base.

Conversely, declines in comparable restaurant sales can have

a significant adverse effect on profitability due to the loss of the positive impact on profit margins associated with comparable

restaurant sales increases.

There is no assurance that comparable restaurant sales will increase in fiscal year 2021 due to, among

other things, ongoing consumer and economic uncertainty.

Our ability to increase

comparable restaurant sales depends on many factors, including:

perceptions of the Flanigan’s brand;

competition, especially from an increasing number of competitors in the fast casual segment of

the restaurant industry and from other restaurants whose strategies overlap ours, as well as from grocery stores, meal kit delivery

services and other dining options;

An investment in our common stock

involves a high degree of risk.

These risks should be considered carefully with the uncertainties described below, and all other information

included in this Annual Report on Form 10-K, before deciding whether to purchase our common stock.

Additional risks and uncertainties

not currently known to management or that management currently deems immaterial and therefore not referenced herein, may also become material

and may harm our business, financial condition or results of operations.

The occurrence of any of the following risks could harm our business,

financial condition and results of operations.

The trading price of our common stock could decline due to any of these risks and uncertainties

and you may lose part or all of your investment.

Certain statements in this report

contain forward-looking information.

In general, forward-looking statements include estimates of future revenues, cash flow, capital expenditures,

or other financial items and assumptions underlying any of the foregoing.

Forward-looking statements reflect management’s current

expectations regarding future events and use words such as “anticipate”, “believe”, “expect”, “may”,

“will” and other similar terminology.

These statements speak only as of the date they were made and involve a number of risks

and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements.

factors, many beyond our control, could cause actual results to differ materially from management’s expectations.

New risks and

uncertainties arise from time to time, and we cannot predict when they may arise or how they may affect us.

We assume no obligation to

update any forward-looking statements after the date of this report as a result of new information, future events or other developments,

except as required by applicable laws and regulations.

Risks Related

to COVID-19 Pandemic

The Novel Coronavirus (COVID-19) Pandemic

Has Had A Significant Impact On Our Operations Since March 2020 And Could Materially And Adversely Affect Our Future Business And Financial

In March 2020, a novel strain

of coronavirus was declared a global pandemic and a National Public Health Emergency.

The novel coronavirus pandemic and related suggested

and mandated social distancing and “shelter-in-place” orders and other governmental mandates relating thereto (collectively,

“COVID-19”) caused significant disruptions to our business, adversely affected and will, in all likelihood continue to adversely

affect, our restaurant operations and financial results for the foreseeable future, particularly if further government directives are

put in place for a significant amount of time.

Throughout our fiscal year 2021, in accordance with guidance from health officials, we

offered both indoor and outdoor food and bar options at all of our restaurants, with, among other precautions, appropriate social distancing

and mask requirements for all customers and employees.

pandemic’s impact on the economy in general, globally, nationally and locally, could also adversely affect our guests’ financial

condition, resulting in reduced spending at our restaurants and package liquor stores.

The COVID-19 pandemic and these responses have

affected and will continue to adversely affect our guest traffic, sales and operating costs and we cannot predict how long the pandemic

will last or what other government responses may occur.

In the second

quarter of fiscal 2020, our Board of Directors voted to cancel a previously declared cash dividend due to uncertainty surrounding the

duration of closures of our dining rooms and other restrictions mandated by state and local governments in response to COVID-19.

our fiscal year 2021, our Board of Directors did not declare a cash dividend due to uncertainty surrounding the duration of restrictions

mandated by state and local governments in response to COVID-19.

not experienced any significant issues related to suppliers;

however, our suppliers could be adversely impacted by the COVID-19 pandemic.

If our suppliers’ employees are unable to work, whether because of illness, quarantine, limitations on travel or other government

restrictions in connection with COVID-19, or if the supply chain is disrupted for any other reason such as travel limitations and other

restrictions on commerce, we could face shortages of food items or other supplies at our restaurants and our operations and sales could

be adversely impacted by such supply interruptions.

of COVID-19, and the volatile regional and global economic conditions stemming from the pandemic, may also precipitate or exacerbate other

risks discussed in this Item 1A - Risk Factors and elsewhere in this report, any of which could have a material effect on us.

This situation

is changing rapidly and additional effects may arise that we are not presently aware of or that we currently do not consider to present

significant risks to our operations.

If we are not able to respond to and manage the impact of such events effectively, our business and

financial condition will be negatively impacted.

Risks Related

to Our Business

If we are unable to

staff and retain qualified restaurant and package liquor store management and operating personnel in an increasingly competitive market,

we may be unable to effectively operate and grow our business and revenues, which could materially adversely affect our financial performance.

to the broader economy, we are experiencing labor shortfalls relative to our sales levels in certain parts of our workforce.

unable to attract and retain qualified people, our restaurants could be short staffed, we may be forced to incur overtime expenses, and

our ability to operate and expand our concepts effectively and to meet our customers’ demand could be limited, any of which could

materially adversely affect our financial performance.

We have experienced

and continue to experience significant labor cost inflation.

If we are unable to offset higher labor costs, our cost of doing business

will significantly increase, which could materially adversely impact our financial performance .

in minimum wages and minimum tip credit wages, extensions of personal and other leave policies, other governmental regulations affecting

labor costs and a diminishing pool of potential staff members when the unemployment rate falls and legal immigration is restricted, especially

in certain localities, could significantly increase our labor costs and make it more difficult to fully staff our restaurants, any of

which could materially adversely affect our financial performance.

believe the United States federal government may significantly increase the federal minimum wage and tip credit wage (or eliminate the

tip credit wage) and require significantly more mandated benefits than what is currently required under federal law.

In addition to increasing

the overall wages paid to our minimum wage and tip credit wage earners, these increases create pressure to increase wages and other benefits

paid to other staff members who, in recognition of their tenure, performance, job responsibilities and other similar considerations, historically

received a rate of pay exceeding the applicable minimum wage or minimum tip credit wage.

Because we employ a large workforce, any wage

increase and/or expansion of benefits mandates will have a particularly significant impact on our labor costs.

Our vendors, contractors

and business partners are similarly impacted by wage and benefit cost inflation, and many have or will increase their price for goods,

construction and services in order to offset their increasing labor costs.

labor expenses include significant costs related to our health benefit plans.

Health care costs continue to rise and are especially difficult

Material increases in costs associated with medical claims, or an increase in the severity or frequency of such claims, may

cause health care costs to vary substantially from year-over-year.

Given the unpredictable nature of actual health care claims trends,

including the severity or frequency of claims, in any given year our health care costs could significantly exceed our estimates,

which could materially adversely affect our financial performance.

significant changes to the healthcare insurance system could impact our healthcare costs.

Material increases in healthcare costs could

materially adversely affect our financial performance.

we try to offset labor cost increases through price increases, more efficient purchasing practices, productivity improvements and greater

economies of scale, there can be no assurance that these efforts will be successful.

If we are unable to effectively anticipate and respond

to increased labor costs, our financial performance could be materially adversely affected.

Our Sales and Profit Growth Could Be

Adversely Affected If Comparable Restaurant Sales Increases Are Less Than We Expect, and We May Not Successfully Increase Comparable Restaurant

Sales or They May Decrease.

While future sales growth

will depend substantially on our opening new restaurants, changes in comparable restaurant sales (which represent the change in period-over-period

sales for restaurants) will also affect our sales growth and will continue to be a critical factor affecting profit growth.

This is because

the profit margin on comparable restaurant sales is generally higher, as comparable restaurant sales increases enable fixed costs to be

spread over a higher sales base.

Conversely, declines in comparable restaurant sales can have a significant adverse effect on profitability

due to the loss of the positive impact on profit margins associated with comparable restaurant sales increases.

There is no assurance

that comparable restaurant sales will increase in fiscal year 2022 due to, among other things, ongoing consumer and economic uncertainty.

Our ability to increase comparable

restaurant sales depends on many factors, including:

perceptions of the Flanigan’s brand;

competition, especially from an increasing number of competitors in the fast casual segment of the restaurant

industry and from other restaurants whose strategies overlap ours, as well as from grocery stores, meal kit delivery services and other

dining options;

executing our strategies effectively, including our marketing and branding strategies;

3 unchanged sentences

changes in government regulation that may impact customer perceptions of our food.

As a result it

is possible that we will not achieve our targeted comparable restaurant sales or that the change in comparable restaurant sales

could be negative.

A number of these factors are beyond our control and therefore we cannot assure that we will be able to sustain

comparable restaurant sales increases.

High Unemployment, Instability in the

Housing Market, High Energy and Food Costs and General Economic Uncertainty Could Result in a Decline in Consumer Discretionary

Spending That Would Materially Affect our Financial Performance.

As a result it is possible

that we will not achieve our targeted comparable restaurant sales or that the change in comparable restaurant sales could be negative.

A number of these factors are beyond our control and therefore we cannot assure that we will be able to sustain comparable restaurant

sales increases.

High Unemployment, Instability in the Housing

Market, High Energy and Food Costs and General Economic Uncertainty Could Result in a Decline in Consumer Discretionary Spending That

Would Materially Affect our Financial Performance.

COVID-19 has had a significant

impact on domestic economies and will likely continue to negatively impact these economies for some time.

Dining out is a discretionary

Factors that affect consumer behavior and spending for restaurant dining, such as changes in general economic conditions

(including national, regional and local economic conditions), discretionary spending patterns, employment levels, instability in

the housing market, and high energy and food costs may have a material adverse effect on us.

If economic conditions worsen, our

financial performance could be adversely affected.

Intense Competition In The Restaurant And Package Liquor Store

Industry Could Prevent Us From Increasing Or Sustaining Our Revenues And Profitability.

The restaurant and package

liquor store industry is intensely competitive with respect to food quality, price-value relationships, ambiance, service and location

and many restaurants and package liquor stores compete with us at each of our locations.

There are a number of well-established

competitors with substantially greater financial, marketing, personnel and other resources than ours, and many of our competitors

are well established in the markets where we have restaurants and/or stores or where we intend to locate restaurants.

Additionally,

other companies may develop restaurants and/or stores that operate with similar concepts.

Any inability to compete

successfully with the other restaurants and/or stores in our markets will prevent us from increasing or sustaining our revenues

and profitability and will result in a material adverse effect on our business, financial condition, results of operations or cash

We may also need to modify or refine elements of our business to evolve our concepts in order to compete with popular new

restaurant formats or store concepts that may develop in the future.

There can be no assurance that we will be successful in implementing

these modifications or that these modifications will not reduce our profitability.

New Information Or Attitudes Regarding

Diet And Health Could Result In Changes In Regulations And Consumer Eating Habits That Could Adversely Affect Our Revenues.

Regulations and

consumer eating habits may change because of new information or attitudes regarding diet and health.

These changes may include

regulations that impact the ingredients and nutritional content of our menu items at our restaurants.

For example, a number of

states, counties and cities are enacting menu-labeling laws requiring multi-unit restaurant operators to make certain nutritional

information available to guests or restrict the sales of certain types of ingredients in restaurants.

The success of our restaurant

operations is dependent, in part, upon our ability to respond effectively to changes in consumer health and disclosure regulations

and to adapt our menu offerings to trends in eating habits.

If consumer health regulations or consumer eating habits change significantly,

we may be required to modify or delete certain menu items.

To the extent we are unable to respond with appropriate changes to our

menu offerings, it could materially affect customer demand and have an adverse impact on our revenues.

Adverse Public Or Medical Opinions About

Health Effects Of Consuming Our Products As Well As Negative Publicity About Us, Our Restaurants And/or Package Liquor Stores And

About Others Across The Food And Liquor Industry Supply Chain, Whether Or Not Accurate, Could Negatively Affect Us.

Restaurant operators have

received more scrutiny from regulators and health organizations in recent years relating to the health effects of consuming certain

An unfavorable report on the products we use in our menu, the size of our portions or the consumption of those items

could influence the demand for our offerings.

In addition, adverse publicity or news reports, whether or not accurate, of food

quality issues, illness, injury, health concerns, or operating issues stemming from a single restaurant, a limited number of restaurants,

restaurants operated by others or generally in the food supply chain could be damaging to the restaurant industry overall and specifically

harm our reputation.

A decrease in guest traffic because of these types of health concerns or negative publicity could materially

harm our results of operations.

In addition to COVID-19, factors that affect consumer behavior and spending for restaurant dining, such as changes in general

economic conditions (including national, regional and local economic conditions), discretionary spending patterns, employment levels,

instability in the housing market, and high energy and food costs may have a material adverse effect on us.

If economic conditions worsen,

our financial performance could be adversely affected.

Intense Competition In The Restaurant And Package Liquor Store Industry

Could Prevent Us From Increasing Or Sustaining Our Revenues And Profitability.

The restaurant and package liquor

store industry is intensely competitive with respect to food quality, price-value relationships, ambiance, service and location and many

restaurants and package liquor stores compete with us at each of our locations.

There are a number of well-established competitors with

substantially greater financial, marketing, personnel and other resources than ours, and many of our competitors are well established

in the markets where we have restaurants and/or stores or where we intend to locate restaurants.

Additionally, other companies may develop

restaurants and/or stores that operate with similar concepts.

Any inability to compete successfully

with the other restaurants and/or stores in our markets will prevent us from increasing or sustaining our revenues and profitability and

will result in a material adverse effect on our business, financial condition, results of operations or cash flows.

We may also need to

modify or refine elements of our business to evolve our concepts in order to compete with popular new restaurant formats or store concepts

that may develop in the future.

There can be no assurance that we will be successful in implementing these modifications or that these

modifications will not reduce our profitability.

New Information Or Attitudes Regarding Diet

And Health Could Result In Changes In Regulations And Consumer Eating Habits That Could Adversely Affect Our Revenues.

Regulations and consumer

eating habits may change because of new information or attitudes regarding diet and health.

These changes may include regulations that

impact the ingredients and nutritional content of our menu items at our restaurants.

For example, a number of states, counties and cities

are enacting menu-labeling laws requiring multi-unit restaurant operators to make certain nutritional information available to guests

or restrict the sales of certain types of ingredients in restaurants.

The success of our restaurant operations is dependent, in part,

upon our ability to respond effectively to changes in consumer health and disclosure regulations and to adapt our menu offerings to trends

in eating habits.

If consumer health regulations or consumer eating habits change significantly, we may be required to modify or delete

certain menu items.

To the extent we are unable to respond with appropriate changes to our menu offerings, it could materially affect

customer demand and have an adverse impact on our revenues.

Adverse Public Or Medical Opinions About Health

Effects Of Consuming Our Products As Well As Negative Publicity About Us, Our Restaurants And/or Package Liquor Stores And About Others

Across The Food And Liquor Industry Supply Chain, Whether Or Not Accurate, Could Negatively Affect Us.

Restaurant operators have received

more scrutiny from regulators and health organizations in recent years relating to the health effects of consuming certain products.

unfavorable report on the products we use in our menu, the size of our portions or the consumption of those items could influence the

demand for our offerings.

In addition, adverse publicity or news reports, whether or not accurate, of food quality issues, illness, injury,

health concerns, or operating issues stemming from a single restaurant, a limited number of restaurants, restaurants operated by others

or generally in the food supply chain could be damaging to the restaurant industry overall and specifically harm our reputation.

in guest traffic because of these types of health concerns or negative publicity could materially harm our results of operations.

Our Inability To Successfully And Sufficiently

1 unchanged sentence

We utilize menu price increases

to help offset cost increases, including increased cost for commodities, minimum wages, employee benefits, insurance arrangements,

construction, utilities and other key operating costs.

If our selection and amount of menu price increases are not accepted by

consumers and reduce guest traffic, or are insufficient to counter increased costs, our financial results could be negatively affected.

However, we have not experienced any adverse effects from past menu price increases.

Increases in Food Costs, Raw Materials

and Other Supplies and Services May Have a Material Adverse Impact on our Financial Performance.

Our operating margins depend

on, among other things, our ability to anticipate and react to changes in the costs of key operating resources, including food

and beverage costs, utilities and other supplies and services.

We attempt to negotiate short-term and long-term agreements for

our principal commodity, supply and equipment requirements, depending on market conditions and expected demand.

However, we are

currently unable to contract for extended periods of time for certain of our commodities.

Consequently, these commodities can be

subject to unforeseen supply and cost fluctuations due to factors such as changes in demand patterns, increases in the cost of

key inputs, fuel costs, weather and other market conditions outside of our control.

Dairy costs can also fluctuate due to government

Our suppliers also may be affected by higher costs to produce and transport commodities used in our restaurants, higher

minimum wage and benefit costs, and other expenses that they pass through to their customers, which could result in higher costs

for goods and services supplied to us.

Our Business Could Be Materially Adversely

Affected If We Are Unable To Expand In A Timely And Profitable Manner.

To grow successfully, we

must open new restaurants and/or package liquor stores on a timely and profitable basis.

We have experienced delays in restaurant

and/or package liquor store openings from time to time and may experience delays in the future.

During our fiscal year 2020, we

continued developing our new restaurant in Sunrise, Florida.

During our fiscal year 2019, we developed a new package liquor store

in Miami, Florida (Store #45).

Our ability to open and

profitably operate restaurants and/or package liquor stores is subject to various risks such as identification and availability

of suitable and economically viable locations, the negotiation of acceptable leases or the purchase terms of existing locations,

the availability of limited partner investors or other means to raise capital, the need to obtain all required governmental permits

(including zoning approvals) on a timely basis, the need to comply with other regulatory requirements, the availability of necessary

contractors and subcontractors, the availability of construction materials and labor, the ability to meet construction schedules

and budgets, variations in labor and building material costs, changes in weather or other acts of God that could result in construction

delays and adversely affect the results of one or more restaurants and/or package liquor stores for an indeterminate amount of

If we are unable to manage these risks successfully, we will face increased costs and lower than anticipated revenues which

will materially adversely affect our business, financial condition, operating results and cash flow.

Changes In Customer Preferences For Casual

Dining Styles Could Adversely Affect Financial Performance.

to help offset cost increases, including increased cost for commodities, minimum wages, employee benefits, insurance arrangements, construction,

utilities and other key operating costs.

If our selection and amount of menu price increases are not accepted by consumers and reduce

guest traffic, or are insufficient to counter increased costs, our financial results could be negatively affected.

However, we have not

experienced any adverse effects from past menu price increases.

Increases in Food Costs, Raw Materials and Other

Supplies and Services May Have a Material Adverse Impact on our Financial Performance.

Our operating margins depend on,

among other things, our ability to anticipate and react to changes in the costs of key operating resources, including food and beverage

costs, utilities and other supplies and services.

We attempt to negotiate short-term and long-term agreements for our principal commodity,

supply and equipment requirements, depending on market conditions and expected demand.

However, we are currently unable to contract for

extended periods of time for certain of our commodities.

Consequently, these commodities can be subject to unforeseen supply and cost

fluctuations due to factors such as changes in demand patterns, increases in the cost of key inputs, fuel costs, weather and other market

conditions outside of our control.

Dairy costs can also fluctuate due to government regulation.

Our suppliers also may be affected by

higher costs to produce and transport commodities used in our restaurants, higher minimum wage and benefit costs, and other expenses that

they pass through to their customers, which could result in higher costs for goods and services supplied to us.

Our Business Could Be Materially Adversely Affected

If We Are Unable To Expand In A Timely And Profitable Manner.

To grow successfully, we must

open new restaurants and/or package liquor stores on a timely and profitable basis.

We have experienced delays in restaurant and/or package

liquor store openings from time to time and may experience delays in the future.

During our fiscal year 2021, we continued developing

our new restaurants in Sunrise, Florida (Store #85) and Miramar, Florida (Store #25).

During our fiscal year 2021, we also continued developing

our new package liquor store in Miramar, Florida (Store #24).

Our ability to open and profitably

operate restaurants and/or package liquor stores is subject to various risks such as identification and availability of suitable and economically

viable locations, the negotiation of acceptable leases or the purchase terms of existing locations, the availability of limited partner

investors or other means to raise capital, the need to obtain all required governmental permits (including zoning approvals) on a timely

basis, the need to comply with other regulatory requirements, the availability of necessary contractors and subcontractors, the availability

of construction materials and labor, the ability to meet construction schedules and budgets, variations in labor and building material

costs, changes in weather or other acts of God that could result in construction delays and adversely affect the results of one or more

restaurants and/or package liquor stores for an indeterminate amount of time.

If we are unable to manage these risks successfully, we

will face increased costs and lower than anticipated revenues which will materially adversely affect our business, financial condition,

operating results and cash flow.

Changes In Customer Preferences For Casual Dining

Styles Could Adversely Affect Financial Performance.

Changing customer preferences,

tastes and dietary habits can adversely impact our business and financial performance.

We offer a large variety of entrees, side

dishes and desserts and our continued success depends, in part, on the popularity of our cuisine and casual style of dining.

change from this dining style may have an adverse effect on our business.

Our Success Depends Substantially on

the Value of our Brands and our Reputation for Offering Guests a Satisfactory Experience.

We believe we have built

a reasonably strong reputation for the predictability of our menu items, as part of the experience that guests enjoy in our restaurants.

We believe we must protect and grow the value of our brands to continue to be successful in the future.

Any incident that erodes

consumer trust in or affinity for our brands could be harmful to us.

If consumers perceive or experience a reduction in food quality,

service or ambiance, or in any way believe we failed to deliver a consistently positive experience, our brand value could suffer.

Our Marketing And Advertising Strategies

May Not Be Successful, Which Could Adversely Impact Our Business.

We offer a large variety of entrees, side dishes

and desserts and our continued success depends, in part, on the popularity of our cuisine and casual style of dining.

A change from this

dining style may have an adverse effect on our business.

Our Success Depends Substantially on the Value

of our Brands and our Reputation for Offering Guests a Satisfactory Experience.

We believe we have built a reasonably

strong reputation for the predictability of our menu items, as part of the experience that guests enjoy in our restaurants.

we must protect and grow the value of our brands to continue to be successful in the future.

Any incident that erodes consumer trust in

or affinity for our brands could be harmful to us.

If consumers perceive or experience a reduction in food quality, service or ambiance,

or in any way believe we failed to deliver a consistently positive experience, our brand value could suffer.

Our Marketing And Advertising Strategies May

Not Be Successful, Which Could Adversely Impact Our Business.

From time to time, we introduce

new advertising campaigns and media strategies.

If our advertising campaign and new media strategies do not resonate with customers

in the manner we hope, they may not result in increased sales, but would still increase our expenses.

We will continue to invest

in marketing and advertising strategies that we believe will attract customers or increase their connection with our brand.

these marketing and advertising investments do not drive increased restaurant and/or package store sales, the expense associated

with these programs will adversely impact our financial results, and we may not generate the levels of comparable sales we expect.

Labor Shortages, An Increase In Labor

Costs, Or Inability To Attract Employees Could Harm Our Business.

Our employees are essential

to our operations and our ability to deliver an enjoyable dining experience to our customers.

If we are unable to attract and retain

enough qualified restaurant and/or package liquor store personnel at a reasonable cost, and if they do not deliver an enjoyable

dining experience, our results may be negatively affected.

Additionally, competition for qualified employees could require us to

pay higher wages, which could result in higher labor costs.

Increases In Employee Minimum Wages By

The Federal Or State Government Could Adversely Affect Business.

Certain of our Company

employees are paid wages that relate to federal and state minimum wage rates.

Increases in the minimum wage rates, such as annual

cost of living increases in the State of Florida minimum wage, may significantly increase our labor costs.

In addition, since our

business is labor-intensive, shortages in the labor pool or other inflationary pressure could increase labor costs, which could

harm our financial performance.

If our advertising campaign and new media strategies do not resonate with customers in

the manner we hope, they may not result in increased sales, but would still increase our expenses.

We will continue to invest in marketing

and advertising strategies that we believe will attract customers or increase their connection with our brand.

If these marketing and

advertising investments do not drive increased restaurant and/or package store sales, the expense associated with these programs will

adversely impact our financial results, and we may not generate the levels of comparable sales we expect.

Labor Shortages, An Increase In Labor Costs,

Or Inability To Attract Employees Could Harm Our Business.

Our employees are essential to

our operations and our ability to deliver an enjoyable dining experience to our customers.

If we are unable to attract and retain enough

qualified restaurant and/or package liquor store personnel at a reasonable cost, and if they do not deliver an enjoyable dining experience,

our results may be negatively affected.

Additionally, competition for qualified employees could require us to pay higher wages, which

could result in higher labor costs.

Increases In Employee Minimum Wages By The Federal

Or State Government Could Adversely Affect Business.

Certain of our Company employees

are paid wages that relate to federal and state minimum wage rates.

Increases in the minimum wage rates, such as fixed annual increases

in the State of Florida minimum wage, may significantly increase our labor costs.

In addition, since our business is labor-intensive,

shortages in the labor pool or other inflationary pressure could increase labor costs, which could harm our financial performance.

Due To Our Geographic Locations, Restaurants

Are Subject To Climate Conditions That Could Affect Operations.

All but one (1) of our

restaurants and package liquor stores are located in South Florida, with the remaining restaurant located in Central Florida.

hurricane season, (June 1 through November 30 each year), our restaurants and/or package liquor stores may face harsh weather associated

with hurricanes and tropical storms.

These harsh weather conditions may make it more difficult for customers to visit our restaurants

and package liquor stores or may necessitate the closure of the stores and restaurants for a period of time.

If customers are unable

to visit our restaurants and/or package liquor stores, our sales and operating results may be negatively affected.

All but one (1) of our restaurants

and package liquor stores are located in South Florida, with the remaining restaurant located in Central Florida.

During hurricane season,

(June 1 through November 30 each year), our restaurants and/or package liquor stores may face harsh weather associated with hurricanes

and tropical storms.

These harsh weather conditions may make it more difficult for customers to visit our restaurants and package liquor

stores or may necessitate the closure of the stores and restaurants for a period of time.

If customers are unable to visit our restaurants

and/or package liquor stores, our sales and operating results may be negatively affected.

If We Were to Experience Widespread Difficulty

Renewing Existing Leases on Favorable Terms, Our Revenue or Occupancy Costs Could be Adversely Affected.

of the properties on which we operate restaurants are leased from third parties, and some of our leases are due for renewal or

extension options in the next several years.

of the properties on which we operate restaurants are leased from third parties, and some of our leases are due for renewal or extension

options in the next several years.

Some leases expire without any renewal options.

While we currently expect to pursue

the renewal of substantially all of our expiring restaurant leases, any difficulty renewing a significant number of such leases,

or any substantial increase in rents associated with lease renewals, could adversely impact us.

If we have to close any restaurants

due to difficulties in renewing leases, we would lose revenue from the affected restaurants and may not be able to open suitable

replacement restaurants.

Substantial increases in rents associated with lease renewals would increase our occupancy costs, reducing

our restaurant margins.

Due To Our Geographic Locations, We May

Not Be Able To Acquire Windstorm Insurance Coverage Or Adequate Windstorm Insurance Coverage At A Reasonable Rate.

Due to the anticipated

active hurricane seasons in South Florida in the future, we may not be able to acquire windstorm insurance coverage for our restaurant

and package liquor store locations on a year-to-year basis or may not be able to get adequate windstorm insurance coverage at reasonable

If we are unable to obtain windstorm insurance coverage or adequate windstorm insurance coverage at reasonable rates, then

we will be self-insured for all or a part of the exposure for damages caused by a hurricane impacting South Florida, which may

have a material adverse effect upon our financial condition and/or results of operations.

Inability To Attract And Retain Customers

Could Affect Results Of Operations.

We take pride in our ability

to attract and retain customers, however, if we do not deliver an enjoyable dining experience for our customers, they may not return

and results may be negatively affected.

A Failure To Comply With Governmental

Regulations Could Harm Our Business And Our Reputation.

We are subject to regulation

by federal agencies and regulation by state and local health, sanitation, building, zoning, safety, fire and other departments

relating to the development and operation of restaurants.

While we currently expect to pursue the renewal of

substantially all of our expiring restaurant leases, any difficulty renewing a significant number of such leases, or any substantial increase

in rents associated with lease renewals, could adversely impact us.

If we have to close any restaurants due to difficulties in renewing

leases, we would lose revenue from the affected restaurants and may not be able to open suitable replacement restaurants.

increases in rents associated with lease renewals would increase our occupancy costs, reducing our restaurant margins.

Due To Our Geographic Locations, We May Not

Be Able To Acquire Windstorm Insurance Coverage Or Adequate Windstorm Insurance Coverage At A Reasonable Rate.

Due to the anticipated active

hurricane seasons in South Florida in the future, we may not be able to acquire windstorm insurance coverage for our restaurant and package

liquor store locations on a year-to-year basis or may not be able to get adequate windstorm insurance coverage at reasonable rates.

we are unable to obtain windstorm insurance coverage or adequate windstorm insurance coverage at reasonable rates, then we will be self-insured

for all or a part of the exposure for damages caused by a hurricane impacting South Florida, which may have a material adverse effect

upon our financial condition and/or results of operations.

Inability To Attract And Retain Customers Could

Affect Results Of Operations.

We take pride in our ability to

attract and retain customers, however, if we do not deliver an enjoyable dining experience for our customers, they may not return and

results may be negatively affected.

A Failure To Comply With Governmental Regulations

Could Harm Our Business And Our Reputation.

We are subject to regulation by

federal agencies and regulation by state and local health, sanitation, building, zoning, safety, fire and other departments relating to

the development and operation of restaurants.

These regulations include matters relating to the following:

6 unchanged sentences

of restaurants will be subject to compliance with applicable zoning, land use and environmental regulations.

We may not be able

to obtain necessary licenses or other approvals on a cost-effective and timely basis in order to construct and develop restaurants

in the future.

Various federal and state

labor laws govern our operations and our relationship with our employees, minimum wage, overtime, working conditions, fringe benefit

and work authorization requirements.

We may not be able to obtain

necessary licenses or other approvals on a cost-effective and timely basis in order to construct and develop restaurants in the future.

Various federal and state labor

laws govern our operations and our relationship with our employees, minimum wage, overtime, working conditions, fringe benefit and work

authorization requirements.

In particular, we are subject to federal immigration regulations.

Given the location of many

of our restaurants, even if we operate those restaurants in strict compliance with federal immigration requirements, our employees

may not all meet federal work authorization or residency requirements, which could lead to disruptions in our work force.

Given the location of many of our restaurants,

even if we operate those restaurants in strict compliance with federal immigration requirements, our employees may not all meet federal

work authorization or residency requirements, which could lead to disruptions in our work force.

Our business can be adversely

affected by negative publicity resulting from, among other things, complaints or litigation alleging poor food quality, food-borne

illness or other health concerns or operating issues stemming from one or a limited number of restaurants.

Unfavorable publicity

could negatively impact public perception of our brands.

We are required

to comply with the alcohol licensing requirements of the federal government, states and municipalities where our restaurants are

Alcoholic beverage control regulations require applications to state authorities and, in certain locations, county and

municipal authorities for a license and permit to sell alcoholic beverages.

Typically, licenses must be renewed annually and may

be revoked or suspended for cause at any time.

Alcoholic beverage control regulations relate to numerous aspects of the daily operations

of the restaurants, including minimum age of guests and employees, hours of operation, advertising, wholesale purchasing, inventory

control and handling and storage and dispensing of alcoholic beverages.

If we fail to comply with federal, state or local regulations,

our licenses may be revoked and we may be forced to terminate the sale of alcoholic beverages at one or more of our restaurants.

The Federal Americans

with Disabilities Act (the “ADA”) prohibits discrimination on the basis of disability in public accommodations and

We are required to comply with the ADA and regulations relating to accommodating the needs of disabled persons in connection

with the construction of new facilities and with significant renovations of existing facilities.

Failure to comply

with these and other regulations could negatively impact our reputation and could have an adverse effect on our business, financial

condition, results of operations or cash flows.

We May Face Liability Under Dram

Shop Statutes.

Our sale of alcoholic

beverages subjects us to “dram shop”

statutes, which allow an injured person to recover damages from an establishment

that served alcoholic beverages to an intoxicated person.

If we receive a judgment substantially in excess of our insurance coverage,

or if we fail to maintain our insurance coverage, our business, financial condition, operating results or cash flows could be materially

and adversely affected.

There are currently no “dram shop”

claims pending against us.

See “Item 1.

Business—Government

Regulation”

affected by negative publicity resulting from, among other things, complaints or litigation alleging poor food quality, food-borne illness

or other health concerns or operating issues stemming from one or a limited number of restaurants.

Unfavorable publicity could negatively

impact public perception of our brands.

We are required to comply

with the alcohol licensing requirements of the federal government, states and municipalities where our restaurants are located.

beverage control regulations require applications to state authorities and, in certain locations, county and municipal authorities for

a license and permit to sell alcoholic beverages.

Typically, licenses must be renewed annually and may be revoked or suspended for cause

Alcoholic beverage control regulations relate to numerous aspects of the daily operations of the restaurants, including minimum

age of guests and employees, hours of operation, advertising, wholesale purchasing, inventory control and handling and storage and dispensing

of alcoholic beverages.

If we fail to comply with federal, state or local regulations, our licenses may be revoked and we may be forced

to terminate the sale of alcoholic beverages at one or more of our restaurants.

The Federal Americans with

Disabilities Act (the “ADA”) prohibits discrimination on the basis of disability in public accommodations and employment.

We are required to comply with the ADA and regulations relating to accommodating the needs of disabled persons in connection with the

construction of new facilities and with significant renovations of existing facilities.

Failure to comply with

these and other regulations could negatively impact our reputation and could have an adverse effect on our business, financial condition,

results of operations or cash flows.

We May Face Liability Under Dram Shop

Our sale of alcoholic beverages

subjects us to “dram shop” statutes, which allow an injured person to recover damages from an establishment that served alcoholic

beverages to an intoxicated person.

If we receive a judgment substantially in excess of our insurance coverage, or if we fail to maintain

our insurance coverage, our business, financial condition, operating results or cash flows could be materially and adversely affected.

There are currently no “dram shop” claims pending against us.

Business—Government Regulation”

for a discussion of the regulations with which we must comply.

We May Face Instances of Food

Borne Illness.

Concerns relating

to pandemics and other diseases, food safety and food-borne illness could reduce customer traffic to our restaurants, disrupt our food

supply chain or cause us to be the target of litigation, which could materially adversely affect our financial performance.

COVID-19 pandemic has had a significant adverse impact on our customer traffic and ability to operate our restaurants and may continue

to do so for the foreseeable future.

Future pandemics and other diseases may have a similar or more severe impact.

In years past, several

nationally known restaurants experienced outbreaks of food poisoning believed to be caused by E.coli contained in fresh spinach,

which is not included in any of the items on our menu, Asian and European countries experienced outbreaks of avian flu and incidents

of “mad cow”

disease have occurred in Canadian and U.S.

nationally known restaurants experienced outbreaks of food poisoning believed to be caused by E.coli contained in fresh spinach, which

is not included in any of the items on our menu, Asian and European countries experienced outbreaks of avian flu and incidents of “mad

cow” disease have occurred in Canadian and U.S.

cattle herds.

These problems, other food-borne illnesses (such

as, hepatitis A, trichinosis or salmonella) and injuries caused by food tampering have in the past, and could in the future, adversely

affect the price and availability of affected ingredients and cause changes in consumer preference.

As a result, our sales could

Instances of food-borne

illnesses, real or perceived, whether at our restaurants or those of our competitors, could also result in negative publicity about

us or the restaurant industry, which could adversely affect sales.

If we react to negative publicity by changing our menu or other

key aspects of the dining experience we offer, we may lose customers who do not accept those changes, and may not be able to attract

enough new customers to produce the revenue needed to make our restaurants profitable.

If our guests become ill from food-borne

illnesses, we could be forced to temporarily close some restaurants.

A decrease in guest traffic as a result of health concerns

or negative publicity, or as a result of a change in our menu or dining experience or a temporary closure of any of our restaurants,

could materially harm our business.

If We Are Unable To Protect Our Customers’

These problems, other food-borne illnesses (such as, hepatitis A,

trichinosis or salmonella) and injuries caused by food tampering have in the past, and could in the future, adversely affect the price

and availability of affected ingredients and cause changes in consumer preference.

As a result, our sales could decline.

Instances of food-borne illnesses,

real or perceived, whether at our restaurants or those of our competitors, could also result in negative publicity about us or the restaurant

industry, which could adversely affect sales.

If we react to negative publicity by changing our menu or other key aspects of the dining

experience we offer, we may lose customers who do not accept those changes, and may not be able to attract enough new customers to produce

the revenue needed to make our restaurants profitable.

If our guests become ill from food-borne illnesses, we could be forced to temporarily

close some restaurants.

A decrease in guest traffic as a result of health concerns or negative publicity, or as a result of a change in

our menu or dining experience or a temporary closure of any of our restaurants, could materially harm our business.

If We Are Unable To Protect Our Customers’

Credit Card Data, We Could Be Exposed To Data Loss, Litigation, And Liability, And Our Reputation Could Be Significantly Harmed.

In connection with credit

card sales, we transmit confidential credit card information by way of secure private retail networks.

Although we use private

networks, third parties may have the technology or know-how to breach the security of the customer information transmitted in connection

with credit card sales, and our security measures and those of our technology vendors may not effectively prohibit others from

obtaining improper access to this information.

If a person is able to circumvent these security measures, he or she could destroy

or steal valuable information or disrupt our operations.

Any security breach could expose us to risks of data loss, litigation,

and liability, and could seriously disrupt our operations and any resulting negative publicity could significantly harm our reputation.

If We Experience a Significant Failure

in or Interruption of Certain Key Information Technology Systems, our Business could be Adversely Impacted.

In connection with credit card

sales, we transmit confidential credit card information by way of secure private retail networks.

Although we use private networks, third

parties may have the technology or know-how to breach the security of the customer information transmitted in connection with credit card

sales, and our security measures and those of our technology vendors may not effectively prohibit others from obtaining improper access

to this information.

If a person is able to circumvent these security measures, he or she could destroy or steal valuable information

or disrupt our operations.

Any security breach could expose us to risks of data loss, litigation, and liability, and could seriously disrupt

our operations and any resulting negative publicity could significantly harm our reputation.

If We Experience a Significant Failure in or

Interruption of Certain Key Information Technology Systems, our Business could be Adversely Impacted.

We use a variety of applications

4 unchanged sentences

on a point-of-sale system that operates locally and is integrated with other functions necessary to operations.

It records sales

transactions, receives out of store orders and authorizes, batches and transmits credit card transactions.

The system also allows

employees to enter time clock information and to produce a variety of management reports.

Select information that is captured from

this system at each restaurant or store is collected in the central corporate infrastructure, which enables management to continually

monitor operating results.

Our ability to manage efficiently and effectively our business depends significantly on the reliability

and capacity of these and other systems and our operations depend substantially on the availability of our point-of-sale system

and related networks and applications.

These systems may be vulnerable to attacks or outages from security breaches, viruses and

other disruptive problems, as well as from physical theft, fire, power loss, telecommunications failure or other catastrophic events.

Any failure of these systems to operate effectively, whether from security breaches, maintenance problems, upgrades or transitions

to new platforms, or other factors could result in interruptions to or delays in our restaurant or other operations, adversely

impacting the restaurant or store experience for our customers or negatively impacting our ability to manage our business.

information technology systems fail and our redundant systems or disaster recovery plans are not adequate to address such failures,

or if our business interruption insurance does not sufficiently compensate us for any losses that we may incur, our revenues and

profits could be reduced and the reputation of our brand and our business could be materially adversely affected.

remediation of any problems with our systems could result in significant, unplanned expenses.

It records sales transactions,

receives out of store orders and authorizes, batches and transmits credit card transactions.

The system also allows employees to enter

time clock information and to produce a variety of management reports.

Select information that is captured from this system at each restaurant

or store is collected in the central corporate infrastructure, which enables management to continually monitor operating results.

ability to manage efficiently and effectively our business depends significantly on the reliability and capacity of these and other systems

and our operations depend substantially on the availability of our point-of-sale system and related networks and applications.

These systems

may be vulnerable to attacks or outages from security breaches, viruses and other disruptive problems, as well as from physical theft,

fire, power loss, telecommunications failure or other catastrophic events.

Any failure of these systems to operate effectively, whether

from security breaches, maintenance problems, upgrades or transitions to new platforms, or other factors could result in interruptions

to or delays in our restaurant or other operations, adversely impacting the restaurant or store experience for our customers or negatively

impacting our ability to manage our business.

If our information technology systems fail and our redundant systems or disaster recovery

plans are not adequate to address such failures, or if our business interruption insurance does not sufficiently compensate us for any

losses that we may incur, our revenues and profits could be reduced and the reputation of our brand and our business could be materially

adversely affected.

In addition, remediation of any problems with our systems could result in significant, unplanned expenses.

The Effect of Recent Changes to U.S.

Healthcare Laws May Increase Our Healthcare Costs and Negatively Impact Our Financial Results.

We offer eligible

full-time employees the opportunity to enroll in healthcare coverage subsidized by the Company.

For various reasons, many of our

eligible employees currently choose not to participate in our healthcare plans.

Laws May Increase Our Healthcare Costs and Negatively Impact Our Financial Results.

We offer eligible full-time

employees the opportunity to enroll in healthcare coverage subsidized by the Company.

For various reasons, many of our eligible employees

currently choose not to participate in our healthcare plans.

However, under the comprehensive U.S.

reform law enacted in 2010, the Affordable Care Act, certain provisions, including, the employer mandate, may increase our labor

costs significantly.

In general, implementing the requirements of the Affordable Care Act is likely to impose additional administrative

The costs and other effects of these new healthcare requirements cannot be determined with certainty, but they may

have a material adverse effect on our financial and operating results.

Governmental Regulation in One

or More of the Following Areas May Adversely Affect Our Existing and Future Operations and Results, Including by Harming Our Ability

to Open New Restaurants or Increasing Our Operating Costs.

health care reform law enacted in 2010,

the Affordable Care Act, certain provisions, including, the employer mandate, may increase our labor costs significantly.

implementing the requirements of the Affordable Care Act is likely to impose additional administrative costs on us.

The costs and other

effects of these new healthcare requirements cannot be determined with certainty, but they may have a material adverse effect on our financial

and operating results.

Governmental Regulation in One or More

of the Following Areas May Adversely Affect Our Existing and Future Operations and Results, Including by Harming Our Ability to Open New

Restaurants or Increasing Our Operating Costs.

and Immigration Regulations

are subject to various federal and state laws governing our relationship with and other matters pertaining to our employees, including

wage and hour laws, requirements to provide meal and rest periods or other benefits, healthcare, family leave mandates, requirements

regarding working conditions and accommodations to certain employees, citizenship or work authorization and related requirements,

insurance and workers’

compensation rules and anti-discrimination laws.

Complying with these rules subjects us to substantial

expense and can be cumbersome and can also expose us to liabilities from claims for non-compliance.

For example, historically,

lawsuits have been filed against us alleging violations of federal and state laws regarding employee wages and payment of overtime.

We could suffer losses from and we incur legal costs to defend, these and similar cases and the amount of such losses or costs

could be significant.

In addition, several states and localities in which we operate and the federal government have from time

to time enacted minimum wage increases, paid sick leave and mandatory vacation accruals and similar requirements and these changes

could increase our labor costs.

wage and hour laws, requirements to provide meal and rest periods or other benefits, healthcare, family leave mandates, requirements regarding

working conditions and accommodations to certain employees, citizenship or work authorization and related requirements, insurance and

workers’ compensation rules and anti-discrimination laws.

Complying with these rules subjects us to substantial expense and can

be cumbersome and can also expose us to liabilities from claims for non-compliance.

For example, historically, lawsuits have been filed

against us alleging violations of federal and state laws regarding employee wages and payment of overtime.

We could suffer losses from

and we incur legal costs to defend, these and similar cases and the amount of such losses or costs could be significant.

several states and localities in which we operate and the federal government have from time to time enacted minimum wage increases, paid

sick leave and mandatory vacation accruals and similar requirements and these changes could increase our labor costs.

Changes in U.S.

healthcare laws could also adversely impact us if they result in significant new

welfare and benefit costs or increased compliance expenses.

healthcare laws could also adversely impact us if they result in significant new welfare and benefit costs or increased compliance expenses.

also are subject to being audited from time to time for compliance with citizenship or work authorization requirements.

to time, the State of Florida considers adopting new state immigration laws and the U.S.

Congress and Department of Homeland Security

from time to time consider or implement changes to Federal immigration laws, regulations or enforcement programs as well.

in immigration or work authorization laws may increase our obligations for compliance and oversight, which could subject us to

additional costs and make our hiring process more cumbersome or reduce the availability of potential employees.

Although we require

all workers to provide us with government-specified documentation evidencing their employment eligibility, some of our employees

may, without our knowledge, be unauthorized workers.

We currently participate in the “E-Verify”

program, an Internet-based,

free program run by the U.S.

government to verify employment eligibility for all employees throughout our company.

of E-Verify does not guarantee that we will properly identify all applicants who are ineligible for employment.

Unauthorized workers

may subject us to fines or penalties and we could experience adverse publicity that negatively affects our brand and may make it

more difficult to hire and keep qualified employees.

Termination of a significant number of employees would disrupt our operations

including slowing our throughput and could also cause additional adverse publicity and temporary increases in our labor costs as

we train new employees.

We could also become subject to fines, penalties and other costs related to claims that we did not

fully comply with all recordkeeping obligations of federal and state immigration compliance laws.

Our reputation and financial

performance may be materially harmed as a result of any of these factors.

the other hand, in the event we wrongfully reject work authorization documents or if our compliance procedures are found to have

a disparate impact on a protected class, such as a racial minority or based on the citizenship status of applicants, we could be

found to be in violation of anti-discrimination laws.

We could experience adverse publicity arising from enforcement activity related

to work authorization compliance, anti-discrimination compliance, or both, that negatively impacts our brand and may make it more

difficult to hire and keep qualified employees.

Moreover, our business could be adversely affected by increased labor costs or

difficulties in finding the right employees for our restaurants.

From time to time,

the State of Florida considers adopting new state immigration laws and the U.S.

Congress and Department of Homeland Security from time

to time consider or implement changes to Federal immigration laws, regulations or enforcement programs as well.

Changes in immigration

or work authorization laws may increase our obligations for compliance and oversight, which could subject us to additional costs and make

our hiring process more cumbersome or reduce the availability of potential employees.

Although we require all workers to provide us with

government-specified documentation evidencing their employment eligibility, some of our employees may, without our knowledge, be unauthorized

We currently participate in the “E-Verify” program, an Internet-based, free program run by the U.S.

government to

verify employment eligibility for all employees throughout our company.

However, use of E-Verify does not guarantee that we will properly

identify all applicants who are ineligible for employment.

Unauthorized workers may subject us to fines or penalties and we could experience

adverse publicity that negatively affects our brand and may make it more difficult to hire and keep qualified employees.

Termination of

a significant number of employees would disrupt our operations including slowing our throughput and could also cause additional adverse

publicity and temporary increases in our labor costs as we train new employees.

We could also become subject to fines, penalties

and other costs related to claims that we did not fully comply with all recordkeeping obligations of federal and state immigration compliance

Our reputation and financial performance may be materially harmed as a result of any of these factors.

the other hand, in the event we wrongfully reject work authorization documents or if our compliance procedures are found to have a disparate

impact on a protected class, such as a racial minority or based on the citizenship status of applicants, we could be found to be in violation

of anti-discrimination laws.

We could experience adverse publicity arising from enforcement activity related to work authorization compliance,

anti-discrimination compliance, or both, that negatively impacts our brand and may make it more difficult to hire and keep qualified employees.

Moreover, our business could be adversely affected by increased labor costs or difficulties in finding the right employees for our restaurants.

Additionally,

while we do not currently have any unionized employees, union organizers have engaged in efforts to organize employees of other

restaurant companies.

If a significant portion of our employees were to become union organized, our labor costs could increase

and our efforts to maintain a culture appealing only to top performing employees could be impaired.

Potential changes in labor

laws, including the possible passage of legislation designed to make it easier for employees to unionize, could increase the likelihood

of some or all of our employees being subjected to greater organized labor influence and could have an adverse effect on our business

and financial results by imposing requirements that could potentially increase our costs, reduce our flexibility and impact our

employee culture.

while we do not currently have any unionized employees, union organizers have engaged in efforts to organize employees of other restaurant

If a significant portion of our employees were to become union organized, our labor costs could increase and our efforts to

maintain a culture appealing only to top performing employees could be impaired.

Potential changes in labor laws, including the possible

passage of legislation designed to make it easier for employees to unionize, could increase the likelihood of some or all of our employees

being subjected to greater organized labor influence and could have an adverse effect on our business and financial results by imposing

requirements that could potentially increase our costs, reduce our flexibility and impact our employee culture.

with Disabilities Act and Similar State Laws

2 unchanged sentences

with disabilities in the context of employment, public accommodations and other areas.

We have incurred legal fees in connection

with ADA-related complaints in the past and we may in the future have to modify restaurants, for example by adding access ramps

or redesigning certain architectural features, to provide service to or make reasonable accommodations for disabled persons under

The expenses associated with these modifications or any damages, legal fees and costs associated with litigating or

resolving claims under the ADA or similar state laws, could be material.

We have incurred legal fees in connection with

ADA-related complaints in the past and we may in the future have to modify restaurants, for example by adding access ramps or redesigning

certain architectural features, to provide service to or make reasonable accommodations for disabled persons under these laws.

associated with these modifications or any damages, legal fees and costs associated with litigating or resolving claims under the ADA

or similar state laws, could be material.

and Food Regulation

recent years there has been an increased legislative, regulatory and consumer focus at the federal, state and municipal levels

on the food industry including nutrition and advertising practices.

Restaurants operating in the quick-service and fast-casual

segments have been a particular focus.

For example, the State of California, New York City and a number of other jurisdictions

around the U.S.

have adopted regulations requiring that chain restaurants include calorie information on their menus and/or make

other nutritional information available and nation-wide nutrition disclosure requirements included in the U.S.

health care reform

law went into effect as of December 1, 2015.

These nutrition disclosure requirements may increase our expenses or slow customers

as they select their food and beverage choices decreasing our throughput.

These initiatives may also change customers’

habits in a way that adversely impacts our sales.

recent years there has been an increased legislative, regulatory and consumer focus at the federal, state and municipal levels on the

food industry including nutrition and advertising practices.

Restaurants operating in the quick-service and fast-casual segments have

been a particular focus.

For example, the State of California, New York City and a number of other jurisdictions around the U.S.

adopted regulations requiring that chain restaurants include calorie information on their menus and/or make other nutritional information

available and nation-wide nutrition disclosure requirements included in the U.S.

health care reform law went into effect as of December 1,

These nutrition disclosure requirements may increase our expenses or slow customers as they select their food and beverage choices

decreasing our throughput.

These initiatives may also change customers’ buying habits in a way that adversely impacts our sales.

Privacy/Cybersecurity

are required to collect and maintain personal information about our employees and we collect information about customers as part

of some of our marketing programs as well.

The collection and use of such information is regulated at the federal and state levels

and the regulatory environment related to information security and privacy is increasingly demanding.

If our security and information

systems are compromised or if we otherwise fail to comply with these laws and regulations, we could face litigation and the imposition

of penalties that could adversely affect our financial performance.

Our reputation as a brand or as an employer could also be adversely

affected from these types of security breaches or regulatory violations, which could impair our sales or ability to attract and

keep qualified employees.

are required to collect and maintain personal information about our employees and we collect information about customers as part of some

of our marketing programs as well.

The collection and use of such information is regulated at the federal and state levels and the regulatory

environment related to information security and privacy is increasingly demanding.

If our security and information systems are compromised

or if we otherwise fail to comply with these laws and regulations, we could face litigation and the imposition of penalties that could

adversely affect our financial performance.

Our reputation as a brand or as an employer could also be adversely affected from these types

of security breaches or regulatory violations, which could impair our sales or ability to attract and keep qualified employees.

Licensure, Zoning and Other Regulation

of our restaurants is also subject to state and local licensing and regulation by health, alcoholic beverage, sanitation, food

and workplace safety and other agencies.

We may experience material difficulties or failures in obtaining the necessary licenses

or approvals for new restaurants, which could delay planned restaurant openings.

In addition, stringent and varied requirements

of local regulators with respect to zoning, land use and environmental factors could delay or prevent development of new restaurants

in particular locations.

of our restaurants is also subject to state and local licensing and regulation by health, alcoholic beverage, sanitation, food and workplace

safety and other agencies.

We may experience material difficulties or failures in obtaining the necessary licenses or approvals for new

restaurants, which could delay planned restaurant openings.

In addition, stringent and varied requirements of local regulators with respect

to zoning, and use and environmental factors could delay or prevent development of new restaurants in particular locations.

Environmental

are subject to federal, state and local environmental laws and regulations concerning the discharge, storage, handling, release

and disposal of hazardous or toxic substances, as well as local ordinances relating to our operations.

We have not conducted a

comprehensive environmental review of our properties or operations.

We cannot predict what environmental laws will be enacted in

the future, how existing or future environmental laws will be administered or interpreted, or the amount of future expenditures

that we may need to make to comply with or to satisfy claims relating to environmental laws.

Be Party To Litigation That Could Adversely Affect Us By Distracting Management, Increasing Our Expenses or Subjecting Us to Material

are subject to federal, state and local environmental laws and regulations concerning the discharge, storage, handling, release and disposal

of hazardous or toxic substances, as well as local ordinances relating to our operations.

We have not conducted a comprehensive environmental

review of our properties or operations.

We cannot predict what environmental laws will be enacted in the future, how existing or future

environmental laws will be administered or interpreted, or the amount of future expenditures that we may need to make to comply with or

to satisfy claims relating to environmental laws.

Party To Litigation That Could Adversely Affect Us By Distracting Management, Increasing Our Expenses or Subjecting Us to Material Money

Damages and Other Remedies.

could be party to litigation that could adversely affect us by distracting management, increasing our expenses or subjecting us to material

money damages and other remedies.

could be party to litigation that could adversely affect us by distracting management, increasing our expenses or subjecting us

to material money damages and other remedies.

We could become subject to numerous claims alleging violations of federal and state

laws regarding workplace and employment matters, including wages, work hours, overtime, vacation and family leave, discrimination,

wrongful termination and similar matters, and we could become subject to class action or other lawsuits related to these or different

Our customers could file complaints or lawsuits against us alleging that we are responsible for some illness or injury

they suffered at or after a visit to our restaurants or that we have problems with food quality, operations or our food related

disclosure or advertising practices.

The restaurant industry has been subject to a growing number of claims based on the nutritional

content of food products sold and disclosure and advertising practices.

of whether any claims against us are valid or whether we are ultimately held liable for such claims, they may be expensive to defend

and may divert time and money away from our operations and hurt our performance.

A significant judgment for any claims against

us could materially and adversely affect our financial condition or results of operations.

Any adverse publicity resulting from

these allegations, whether directed at us or at fast casual or quick-service restaurants generally, may also materially and adversely

affect our reputation or prospects, which in turn could adversely affect our results.

We could become subject to numerous claims alleging violations of federal and state laws regarding workplace

and employment matters, including wages, work hours, overtime, vacation and family leave, discrimination, wrongful termination and similar

matters, and we could become subject to class action or other lawsuits related to these or different matters.

Our customers could file

complaints or lawsuits against us alleging that we are responsible for some illness or injury they suffered at or after a visit to our

restaurants or that we have problems with food quality, operations or our food related disclosure or advertising practices.

The restaurant

industry has been subject to a growing number of claims based on the nutritional content of food products sold and disclosure and advertising

of whether any claims against us are valid or whether we are ultimately held liable for such claims, they may be expensive to defend and

may divert time and money away from our operations and hurt our performance.

A significant judgment for any claims against us could materially

and adversely affect our financial condition or results of operations.

Any adverse publicity resulting from these allegations, whether

directed at us or at fast casual or quick-service restaurants generally, may also materially and adversely affect our reputation or prospects,

which in turn could adversely affect our results.

May Depend on the Continued Service and Availability of Key Personnel.

Chairman and Chief Executive Officer and President, James Flanigan, has been the principal architect of our business strategy since 2002.

August Bucci and Jeffrey Kastner, our Chief Operating Officer and Chief Financial Officer, respectively, have also served

with us since 2002 in the case of Mr.

Bucci and since 2004 in the case of Mr.

Kastner, and much of our growth has occurred under

their direction as well.

We believe our executive officers have created an employee culture, food culture and business strategy

at our company that has been critical to our success and that may be difficult to replicate under another management team.

believe that it may be difficult to locate and retain executive officers who are able to grasp and implement our unique strategic

If our company culture were to deteriorate following a change in leadership, or if a new management team were to be unsuccessful

in executing our strategy or were to change important elements of our current strategy, our growth prospects or future operating

results may be adversely impacted.

Exposed to Risks Related to Cybersecurity.

we maintain systems and processes that are designed to protect the security of our computer systems, software, networks and other

technology, there is no assurance that all of our security measures will provide absolute security.

Any material incidents could

cause us to experience financial losses that are either not insured against or not fully covered through any insurance maintained

by us and increased expenses related to addressing or mitigating the risks associated with any such material incidents.

threats are rapidly evolving and are becoming increasingly sophisticated.

Despite our efforts to ensure the integrity of our systems,

as cyber threats evolve and become more difficult to detect and successfully defend against, one or more cyber threats might defeat

the measures that we or our vendors take to anticipate, detect, avoid or mitigate such threats.

Certain techniques used to obtain

unauthorized access, introduce malicious software, disable or degrade service, or sabotage systems may be designed to remain dormant

until a triggering event and we may be unable to anticipate these techniques or implement adequate preventative measures since

techniques change frequently or are not recognized until launched, and because cyberattacks can originate from a wide variety of

If our information security systems or data are compromised in a material way,

our ability to conduct our business may be impaired, we may incur financial losses and we may incur costs to remediate possible

harm and/or to pay fines or take other action which could have a material adverse impact on our business.

There is a Material Failure in our Information Technology Systems, Our Business Operations and Profits could be Negatively Affected

and our Systems may be Inadequate to Support our Future Growth Strategies.

rely heavily on information technology systems in all aspects of our operations including our restaurant point-of sale systems,

financial systems, marketing programs, employee engagement, supply chain management, cyber-security, and various other processes

and transactions.

Our ability to effectively manage and run our business depends on the reliability and capacity of our information

technology systems, including technology services and systems for which we contract from third parties.

These systems and services

may be insufficient to effectively manage and run our business.

These systems and our business needs will continue to evolve and

require upgrading and maintenance over time, consequently requiring significant future commitments of resources and capital.

August Bucci, Jeffrey Kastner and Christopher O’Neil, our Chief Operating Officer, Chief Financial Officer and Vice President of

Package Operations, respectively, have also served with us since 2002 in the case of Mr.

Bucci, since 2004 in the case of Mr.

and 2016 in the case of Mr.

O’Neil, and much of our growth has occurred under their direction as well.

We believe our executive

officers have created an employee culture, food culture and business strategy at our company that has been critical to our success and

that may be difficult to replicate under another management team.

We also believe that it may be difficult to locate and retain executive

officers who are able to grasp and implement our unique strategic vision.

If our company culture were to deteriorate following a change

in leadership, or if a new management team were to be unsuccessful in executing our strategy or were to change important elements of our

current strategy, our growth prospects or future operating results may be adversely impacted.

We are Exposed

to Risks Related to Cybersecurity.

we maintain systems and processes that are designed to protect the security of our computer systems, software, networks and other technology,

there is no assurance that all of our security measures will provide absolute security.

Any material incidents could cause us to experience

financial losses that are either not insured against or not fully covered through any insurance maintained by us and increased expenses

related to addressing or mitigating the risks associated with any such material incidents.

Cyber threats are rapidly evolving and

are becoming increasingly sophisticated.

Despite our efforts to ensure the integrity of our systems, as cyber threats evolve and become

more difficult to detect and successfully defend against, one or more cyber threats might defeat the measures that we or our vendors take

to anticipate, detect, avoid or mitigate such threats.

Certain techniques used to obtain unauthorized access, introduce malicious software,

disable or degrade service, or sabotage systems may be designed to remain dormant until a triggering event and we may be unable to anticipate

these techniques or implement adequate preventative measures since techniques change frequently or are not recognized until launched,

and because cyberattacks can originate from a wide variety of sources.

If our information security

systems or data are compromised in a material way, our ability to conduct our business may be impaired, we may incur financial losses

and we may incur costs to remediate possible harm and/or to pay fines or take other action which could have a material adverse impact

on our business.

a Material Failure in our Information Technology Systems, Our Business Operations and Profits could be Negatively Affected and our Systems

may be Inadequate to Support our Future Growth Strategies.

rely heavily on information technology systems in all aspects of our operations including our restaurant point-of sale systems, financial

systems, marketing programs, employee engagement, supply chain management, cyber-security, and various other processes and transactions.

Our ability to effectively manage and run our business depends on the reliability and capacity of our information technology systems,

including technology services and systems for which we contract from third parties.

These systems and services may be insufficient to

effectively manage and run our business.

These systems and our business needs will continue to evolve and require upgrading and maintenance

over time, consequently requiring significant future commitments of resources and capital.

these technology services and systems, communication systems, and electronic data could be subject or vulnerable to damage or interruption

from hurricanes, terrorist attacks, floods, fires, power loss, telecommunications failures, computer viruses, loss of data, data

breaches, or other attempts to harm our systems.

A failure of these systems to operate effectively, problems with transitioning

to upgraded or replacement systems, or any other failure to maintain a continuous and secure information technology network for

any of the above reasons could result in interruption and delays in customer services, adversely affect our reputation, and negatively

impact our results of operations.

of Violence at or Threatened Against our Restaurants or the Centers in which they are Located, including Active Shooter Situations

and Terrorism, Could Unfavorably Impact our Restaurant Sales, which could Materially Adversely Affect our Financial Performance.

from hurricanes, terrorist attacks, floods, fires, power loss, telecommunications failures, computer viruses, loss of data, data breaches,

or other attempts to harm our systems.

A failure of these systems to operate effectively, problems with transitioning to upgraded or replacement

systems, or any other failure to maintain a continuous and secure information technology network for any of the above reasons could result

in interruption and delays in customer services, adversely affect our reputation, and negatively impact our results of operations.

Acts of Violence

at or Threatened Against our Restaurants or the Centers in which they are Located, including Active Shooter Situations and Terrorism,

Could Unfavorably Impact our Restaurant Sales, which could Materially Adversely Affect our Financial Performance.

act of violence at or threatened against our restaurants or the centers in which they are located, including active shooter situations

and terrorist activities, may result in restricted access to our restaurants and/or restaurant closures in the short-term and,

in the long-term, may cause our customers and staff to avoid our restaurants.

Any such situation could adversely impact customer

traffic and make it more difficult to staff our restaurants fully, which could materially adversely affect our financial performance.

and terrorist activities, may result in restricted access to our restaurants and/or restaurant closures in the short-term and, in the

long-term, may cause our customers and staff to avoid our restaurants.

Any such situation could adversely impact customer traffic and

make it more difficult to staff our restaurants fully, which could materially adversely affect our financial performance.

occurrence or threat of extraordinary events, such as active shooter or future terrorist attacks military and governmental responses,

and the protest of future wars, may result in negative changes to economic conditions likely resulting in decreased consumer spending.

Additionally, decreases in consumer discretionary spending may impact the frequency with which our customers choose to dine out

at restaurants or the amount they spend on meals while dining out at restaurants, thereby adversely affecting our sales and results

of operations.

A decrease in consumer discretionary spending may also adversely affect our ability to achieve the benefit of planned

menu price increases to help preserve our operating margins.

Media Impact on Customer Perceptions of our Brand.

Additionally, decreases in consumer discretionary spending may impact the frequency with which our customers choose to dine out at restaurants

or the amount they spend on meals while dining out at restaurants, thereby adversely affecting our sales and results of operations.

decrease in consumer discretionary spending may also adversely affect our ability to achieve the benefit of planned menu price increases

to help preserve our operating margins.

Impact on Customer Perceptions of our Brand.

considerable expansion in the use of social media over recent years can further amplify any negative publicity that may be generated.

The adverse impact of publicity on customers’

perception of us could have a further negative impact on our sales.

impact of any such publicity is particularly long-lasting, the value of our brand may suffer and our ability to grow could be diminished.

digital business, which has become an increasing significant part of our business, is subject to risks.

due to the COVID-19 pandemic, our revenue derived from digital orders, which includes delivery and customer pickup has increased

substantially.

While we are uncertain as to whether this business will continue to increase and/or be significant, we have implemented

technology, targeted advertising and promotions and to some extent remodeled our restaurants, to accommodate the growth of our

digital business.

If we do not continue to grow our digital business, it may be difficult for us to recoup these costs or achieve

our sales growth potential.

We rely on third-party delivery services to fulfill package store delivery orders, and the ordering

and payment platforms used by these third-parties, or online ordering system, could be interrupted by technological failures, user

errors, cyber-attacks or other factors, which could adversely impact sales through these channels and negatively impact our reputation.

Additionally, our delivery partners are responsible for order fulfillment and errors or failures to make timely deliveries could

cause guests to stop ordering from us.

The third-party delivery business is competitive, with a number of players competing for

market share and delivery drivers.

If the third-party delivery services that we utilize cease or curtail operations, increase

their fees, or give greater priority or promotions on their platforms to our competitors, our delivery business and our sales may

be negatively impacted.

The adverse impact of publicity on customers’ perception of us could have a further negative impact on our sales.

If the impact

of any such publicity is particularly long-lasting, the value of our brand may suffer and our ability to grow could be diminished.

business, which has become an increasing significant part of our business, is subject to risks.

due to the COVID-19 pandemic, our revenue derived from digital orders, which includes delivery and customer pickup has increased substantially.

While we are uncertain as to whether this business will continue to increase and/or be significant, we have implemented technology, targeted

advertising and promotions and to some extent remodeled our restaurants, to accommodate the growth of our digital business.

continue to grow our digital business, it may be difficult for us to recoup these costs or achieve our sales growth potential.

on third-party delivery services to fulfill package store delivery orders, and the ordering and payment platforms used by these third-parties,

or online ordering system, could be interrupted by technological failures, user errors, cyber-attacks or other factors, which could adversely

impact sales through these channels and negatively impact our reputation.

Additionally, our delivery partners are responsible for order

fulfillment and errors or failures to make timely deliveries could cause guests to stop ordering from us.

The third-party delivery business

is competitive, with a number of players competing for market share and delivery drivers.

If the third-party delivery services that

we utilize cease or curtail operations, increase their fees, or give greater priority or promotions on their platforms to our competitors,

our delivery business and our sales may be negatively impacted

institutional lender will no longer originate, renew or modify loans at LIBOR effective January 1, 2022.

January 1, 2022, our institutional lender will no longer originate, renew or modify loans at LIBOR, except in limited situations.

limited exceptions include our LIBOR transactions which reduce or hedge our LIBOR exposure on contracts entered into before January 1,

UNRESOLVED STAFF COMMENTS

As a Smaller Reporting

Company as defined by Rule 12b-2 of the Exchange Act and in Item 10(f)(1) of Regulation S-K, we are electing scaled disclosure

reporting obligations and therefore are not required to provide the information requested by this Item 1B.

As a Smaller Reporting Company

as defined by Rule 12b-2 of the Exchange Act and in Item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations

and therefore are not required to provide the information requested by this Item 1B.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors