What changed in this filing

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Item 1. Business

2023-01-18 compared with 2022-01-14 · 244 added, 259 removed, 421 unchanged (54% of the section changed)

As of October 2, 2021, Flanigan’s

Enterprises, Inc., a Florida corporation, together with its subsidiaries (“we”, “our”, “ours” and

“us” as the context requires), (i) operates 27 units, consisting of restaurants, package liquor stores and combination restaurants/package

liquor stores that we either own or have operational control over and partial ownership in;

and (ii) franchises an additional five units,

consisting of two restaurants (one of which we operate) and three combination restaurants/package liquor stores.

The table below provides

information concerning the type (i.e.

restaurant, package liquor store or combination restaurant/package liquor store) and ownership of

the units (i.e.

As of October 1, 2022,

Flanigan’s Enterprises, Inc., a Florida corporation, together with its subsidiaries (“we”, “our”, “ours”

and “us” as the context requires), (i) operates 30 units, consisting of restaurants, package liquor stores, combination restaurant/package

liquor stores and a sports bar that we either own or have operational control over and partial ownership in;

and franchises an additional

five units, consisting of two restaurants (one of which we operate) and three combination restaurant/package liquor stores.

below provides information concerning the type (i.e.

restaurant, sports bar, package liquor store or combination restaurant/package liquor

store) and ownership of the units (i.e.

whether (i) we own 100% of the unit;

(ii) the unit is owned by a limited partnership of which we are the sole general

partner and/or have invested in;

or (iii) the unit is franchised by us), as of October 2, 2021 and as compared to October 3, 2020.

the exception of “The Whale’s Rib”, a restaurant we operate but do not own, all of the restaurants operate under our

service marks “Flanigan’s Seafood Bar and Grill” or “Flanigan’s” and all of the package liquor stores

operate under our service marks “Big Daddy’s Liquors” or “Big Daddy’s Wine & Liquors.”

(ii) the unit is owned by a limited partnership of which

we are the sole general partner and/or have invested in;

or (iii) the unit is franchised by us), as of October 1, 2022 and as compared

to October 2, 2021.

With the exception of “The Whale’s Rib”, a restaurant we operate but do not own, and “Brendan’s

Sports Pub” a restaurant/bar we own, all of the restaurants operate under our service marks “Flanigan’s Seafood Bar

and Grill” or “Flanigan’s” and all of the package liquor stores operate under our service marks “Big Daddy’s

Liquors” or “Big Daddy’s Wine & Liquors”.

TYPES OF UNITS

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Combination package liquor store and restaurant

Restaurant only

Restaurant only, including sports bar

Package liquor store only

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____________________

During the first quarter of our fiscal year 2019, our combination package liquor store and restaurant located

University Drive, Hollywood, Florida (Store #19) was damaged by a fire which has caused it to be closed since the first quarter

of our fiscal year 2019.

Revenues and expenses from Store #19 for the time Store #19 was open during the first quarter of our fiscal year

2019 (two (2) days) are immaterial, with the exception of payroll.

Store #19 remains closed.

(1) During the first quarter of our fiscal

year 2019, our combination package liquor store and restaurant located at 2505 N.

University Drive, Hollywood, Florida (Store #19), was

damaged by a fire which has caused it to be closed since the first quarter of our fiscal year 2019.

Subsequent to our fiscal year ended

October 1, 2022, we opened our newly built stand-alone package liquor store on this site replacing our package liquor store destroyed

by fire and previously operating here, We are constructing a stand-alone restaurant building on this site (adjacent to the package liquor

store), replacing our restaurant destroyed by fire and previously operating here.

We do not believe this restaurant will be operational

during our fiscal year 2023.

(2) During the third quarter of our fiscal

year 2022, we entered into a new lease for the business premises and purchased the assets of a restaurant/bar known as “Brendan’s

Sports Pub” located at 868 S.

Federal Highway, Pompano Beach, Florida and began operating the location under its current trade name.

(3) During the second quarter of our fiscal

year 2022, our limited partnership owned restaurant located at 14301 West Sunrise Boulevard, Sunrise, Florida (Store #85) opened for business

in March, 2022 (the “2022 Sunrise Restaurant”).

Our limited partnership owned restaurant located at 11225 Miramar Parkway

#250, Miramar, Florida (Store #25) is expected to open for business in February, 2023 (the “2023 Miramar Restaurant”).

(4) We operate a restaurant for one (1) franchisee.

This unit is included in the table both as a franchised restaurant

as well as a Company-operated restaurant.

This unit is included in the table both as a franchised restaurant, as well as a restaurant operated by us.

and Development of Our Business

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established a chain of "Big Daddy's" lounges and package liquor stores between Vero Beach and Homestead, Florida.

1979, we expanded our package liquor store and lounge operations throughout Florida and opened clubs in five other "Sun Belt"

In 1975, we discontinued most of our package store operations in Florida except in the South Florida areas of Miami-Dade, Broward,

Palm Beach and Monroe Counties.

In 1982, we expanded our club operations into the Philadelphia, Pennsylvania area as general partner of

several limited partnerships we organized.

In March 1985, we began franchising package liquor stores and lounges in the South Florida

See Note 16 to the consolidated financial statements and the discussion of franchised units on page 8.

From 1970 to 1979, we

expanded our package liquor store and lounge operations throughout Florida and opened clubs in five other "Sun Belt" states.

we discontinued most of our package store operations in Florida except in the South Florida areas of Miami-Dade, Broward, Palm Beach and

Monroe Counties.

In 1982, we expanded our club operations into the Philadelphia, Pennsylvania area as general partner of several limited

partnerships we organized.

In March 1985, we began franchising package liquor stores and lounges in the South Florida area.

14 to the consolidated financial statements and the discussion of franchised units on pages 3 and 4).

During our fiscal year 1987, we

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Our restaurants

offer alcoholic beverages and full food service with abundant portions and reasonable prices, served in a relaxed, friendly and casual

and our new sports bar establishment offer alcoholic beverages and food service with abundant portions and reasonable prices, served in

a relaxed, friendly and casual atmosphere.

We conduct our operations directly

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Flanigan’s Enterprises, Inc.

Flanigan’s Enterprises of N.

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Package Liquor Stores .

We own and operate nine package liquor stores in the South Florida area under the name “Big Daddy’s

Liquors” or “Big Daddy’s Wine & Liquors”, two of which are jointly operated with restaurants we own.

As of our fiscal year ended October 1, 2022, we own and operate nine package liquor stores in the South

Florida area under the name “Big Daddy’s Liquors” or “Big Daddy’s Wine & Liquors”, two of which

are jointly operated with restaurants we own.

Subsequent to our fiscal year ended October 1, 2022, we opened our stand-alone package liquor

store replacing our package liquor store destroyed by fire and previously operating in Hollywood, Florida.

Package Liquor Stores .

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franchisee’s restaurant operations and one is operated in a freestanding building adjacent to the franchisee’s restaurant

Two of the three remaining franchised package liquor stores are franchised to members of the family of our Chairman of the

Board, officers and/or directors.

We have not entered into a franchise arrangement for either a package liquor store, restaurant or combination

package liquor store/restaurant since 1986 and do not anticipate that we will do so in the foreseeable future.

Two of the three franchised package liquor stores are franchised to members of the family of our Chairman of the Board, officers

and/or directors.

We have not entered into a franchise arrangement for either a package liquor store, restaurant or combination package

liquor store/restaurant since 1986 and do not anticipate that we will do so in the foreseeable future.

Generally, a franchise agreement

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at the stores depending upon our actual advertising costs.

For accounting purposes, we do

not consolidate the revenue and expenses of our franchisees’ operations with our revenue and expenses.

Franchise royalties we receive

are recognized as revenue when sales are made by franchisees.

Our restaurants provide a neighborhood

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two of which are jointly operated with package liquor stores we own.

One additional combination package liquor store and restaurant located

University Drive, Hollywood, Florida (Store #19) has been closed since October 2018 due to fire damage.

We are constructing a stand-alone restaurant to be located in Hollywood,

Florida to replace our restaurant destroyed by fire.

We do not believe this restaurant will be operational during our fiscal year 2023.

Restaurants .

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Liquors” package liquor store and one of which operates adjacent to a “Big Daddy’s Liquors” package liquor store.

Four of the five franchised restaurants are franchised to members of the family of or our Chairman of the Board, officers and/or directors.

We have not entered into a franchise arrangement for either a package liquor store, restaurant or combination package liquor store/restaurant

since 1986 and do not anticipate that we will do so in the foreseeable future.

Generally, a franchise agreement

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Franchise royalties we receive

are “earned” when sales are made by franchisees.

are recognized as revenue when sales are made by franchisees.

Restaurants Owned by Affiliated

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We have invested along with others,

(some of whom are or are affiliated with our officers and directors), in nine limited partnerships which currently own and operate nine

(some of whom are or are affiliated with our officers and directors), in ten limited partnerships which currently own and operate nine

South Florida based restaurants under our service mark “Flanigan’s Seafood Bar and Grill”.

In addition to being a limited

partner in these limited partnerships, we are the sole general partner of eight of these limited partnerships and manage and control the

operations of these restaurants.

We are only a limited partner in the limited partnership which owns and operates the restaurant located

in Fort Lauderdale, Florida.

We are currently developing “Flanigan’s” restaurants in Sunrise, Florida and Miramar, Florida,

both of which will be owned by a limited partnership using the same or substantially similar financial arrangement and corporate structure

as our other restaurants owned by limited partnerships, with the Company acting as the sole general partner of the limited partnerships.

Additionally, we and certain of our affiliates may become limited partners in these limited partnerships.

Generally, the terms of the limited

partnership agreements provide that until the investors’ cash investment in a limited partnership (including any cash invested by

us) is returned in full, (available cash is distributed to the investors pro-rata based on ownership interest), the limited partnership

distributes to the investors annually out of available cash from the operation of the restaurant, as a return of capital, up to 25% of

the cash invested in the limited partnership, with no management fee paid to us.

Any available cash in excess of the 25% of the cash invested

in the limited partnership distributed to the investors annually, is paid one-half (½) to us as a management fee and one-half (½)

to the investors, (including us), pro-rata based on the investors’ investment, as a return of capital.

Once all of the investors,

(including us), have received, in full, amounts equal to their cash invested, an annual management fee becomes payable to us equal to

one-half (½) of cash available to be distributed, with the other one-half (½) of available cash distributed to the investors

(including us), as a profit distribution, pro-rata based on the investors’ investment.

As of October 2, 2021, all eight (8) limited

partnerships where we are the general partner and are eligible to receive a management fee, have returned to their respective investors

all cash invested and we receive an annual management fee equal to one-half (½) of the cash available for distribution by these limited

partnerships.

In addition to our receipt of distributable amounts from the limited partnerships, we receive a fee equal to 3% of gross

sales for use of our “Flanigan’s Seafood Bar and Grill” or “Flanigan’s” service marks, which use is

authorized while we act as general partner only.

This 3% fee is “earned” when sales are made by the limited partnerships and

is paid weekly, in arrears.

Whether we will have any additional restaurants under development in the future will be dependent, among other

things, on market conditions and our ability to raise capital.

We anticipate that we will continue to form limited partnerships to raise

funds to own and operate restaurants under our service marks “Flanigan’s Seafood Bar and Grill” or “Flanigan’s”

using the same or substantially similar financial arrangements.

Below is information on the nine

An additional limited partnership

owned restaurant located at 11225 Miramar Parkway #250, Miramar, Florida (Store #25) is expected to open for business in February, 2023

(the “2023 Miramar Restaurant”).

In addition to being a limited partner in these limited partnerships, we are the sole general

partner of nine of these limited partnerships and manage and control the operations of these restaurants.

We are only a limited partner

in the limited partnership which owns and operates the restaurant located in Fort Lauderdale, Florida.

the terms of the limited partnership agreements provide that until the investors’ cash investment in a limited partnership (including

any cash invested by us) is returned in full, (available cash is distributed to the investors pro-rata based on ownership interest), the

limited partnership distributes to the investors annually out of available cash from the operation of the restaurant, as a return of capital,

up to 25% of the cash invested in the limited partnership, with no management fee paid to us.

Any available cash in excess of the 25%

of the cash invested in the limited partnership distributed to the investors annually, is paid one-half (½) to us as a management

fee and one-half (½) to the investors, (including us), pro-rata based on the investors’ investment, as a return of capital.

Once all of the investors, (including us), have received, in full, amounts equal to their cash invested, an annual management fee becomes

payable to us equal to one-half (½) of cash available to be distributed, with the other one-half (½) of available cash distributed

to the investors (including us), as a profit distribution, pro-rata based on the investors’ investment.

As of October 1, 2022, all

limited partnerships, with the exception of the 2022 Sunrise Restaurant, which opened for business in March, 2022 and the 2023 Miramar

Restaurant, which we anticipate will open for business in February, 2023, have returned all cash invested and we receive an annual management

fee equal to one-half (½) of the cash available for distribution by the limited partnership.

In addition to receipt of distributable

amounts from the limited partnerships, we receive a fee equal to 3% of gross sales for use of the service mark “Flanigan’s

Seafood Bar and Grill” or “Flanigan’s”.

In addition to our receipt of distributable amounts from the limited partnerships,

we receive a fee equal to 3% of gross sales for use of our “Flanigan’s Seafood Bar and Grill” or “Flanigan’s”

service marks, which use is authorized while we act as general partner only.

This 3% fee is “earned” when sales are made by

the limited partnerships and is paid weekly, in arrears.

Whether we will have any additional restaurants under development in the future

will be dependent, among other things, on market conditions and our ability to raise capital.

We anticipate that we will continue to form

limited partnerships to raise funds to own and operate restaurants under our service marks “Flanigan’s Seafood Bar and Grill”

or “Flanigan’s” using the same or substantially similar financial arrangements.

Below is information on the eleven

limited partnerships which own and operate “Flanigan’s Seafood Bar and Grill” or “Flanigan’s” restaurants:

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Sunrise, Florida

During the second quarter of our

fiscal year 2019, we entered into a Lease Agreement (the “Sunrise Lease Agreement”) with a non-affiliated third party to rent

approximately 6,900 square feet of commercial space in Sunrise, Florida where, subject to certain conditions, we anticipate opening a

new restaurant location under our “Flanigan’s” service mark.

During the third quarter of our fiscal year 2019, we assigned

the Sunrise Lease Agreement to a newly formed limited partnership in which we currently are (i) the sole general partner;

wholly owned subsidiary is the sole limited partner.

While there can be no assurances that we will be successful in doing so, we are currently

selling limited partnership interests to third parties as well as affiliates of the Company in order to raise net proceeds, in the amount

of $5,000,000, which proceeds will be used to renovate this potential restaurant location.

We anticipate that the new restaurant location’s

ownership and operating structure will be substantially similar to that of our other restaurants owned by limited partnerships.

October 2, 2021, we have made capital contributions of $2,982,000, including construction in progress of $2,224,000, in this limited partnership.

We are the sole general partner

and a 7% limited partner in this limited partnership which has owned and operated a restaurant in Sunrise, Florida under our “Flanigan’s”

service mark since March 20, 2022.

31.3% of the remaining limited partnership interest is owned by persons who are either our officers,

directors or their family members.

As of the end of our fiscal year 2022, this limited partnership has returned to its investors approximately

2.0% of their initial cash invested.

Miramar, Florida

During the fourth quarter of our

fiscal year 2019, we entered into a Lease Agreement (the “Miramar Lease Agreement”) with a non-affiliated third party to rent

approximately 6,000 square feet of commercial space in Miramar, Florida where, subject to certain conditions, we anticipate opening a

new restaurant location under our “Flanigan’s” service mark.

Subsequent to the end of our fiscal year 2021, we assigned

the Miramar Lease Agreement to a newly formed limited partnership in which we currently are (i) the sole general partner;

wholly owned subsidiary is the sole limited partner.

While there can be no assurances that we will be successful in doing so, we are currently

selling limited partnership interests to third parties as well as affiliates of the Company in order to raise net proceeds, in the amount

of $4,000,000, which proceeds will be used to renovate this potential restaurant location.

We anticipate that the new restaurant location’s

ownership and operating structure will be substantially similar to that of our other restaurants owned by limited partnerships.

October 2, 2021, we have made capital contributions of $313,000, including construction in progress of $260,000, in this limited partnership.

We are the sole general partner

in this limited partnership which is developing a restaurant in Miramar, Florida under our “Flanigan’s” service mark.

No units of limited partnership interest were purchased by the Company.

24.0% of the limited partnership interest is owned by persons

who are either our officers, directors or their family members.

We anticipate that this new restaurant will commence operations in February,

Fort Lauderdale, Florida

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operation of the restaurant.

For our fiscal years ended October 2, 2021 and October 3, 2020, we generated $400,000 and $150,000 of revenue,

respectively from providing these management services.

For our fiscal years ended October 1, 2022 and October 2, 2021, we generated $400,000 of revenue each fiscal

year from providing these management services.

and Management

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Our operations are supervised by supervisors,

who visit units to provide on-site management and support.

There are three supervisors responsible for package liquor store operations

and six supervisors responsible for restaurant operations.

who visit all Company, limited partnership and franchise owned units and the managed unit to provide on-site management and support.

are three supervisors responsible for package liquor store operations and six supervisors responsible for restaurant operations.

All of our managers and salespersons

receive extensive training in sales techniques.

We arrange for independent third parties, or "shoppers", to inspect each unit

in order to evaluate the unit's operations, including the handling of cash transactions.

We arrange for independent third parties, or "shoppers", to inspect each unit in order

to evaluate the unit's operations, including the handling of cash transactions.

Purchasing and Inventory

The package liquor business requires

a constant substantial capital investment in inventory in the units.

a constant substantial capital investment in inventory at the stores.

Our inventory consists primarily of liquor and wine products and

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In order to fix the cost and ensure

adequate supply of baby back ribs for our restaurants, on November 9, 2020, we entered into a purchase agreement with our current rib

supplier, whereby we agreed to purchase approximately $6,420,000 of baby back ribs during calendar year 2021 from this vendor at a fixed

During the third quarter of our fiscal year 2021, we agreed to increase the fixed cost of the remaining baby back ribs for our calendar

year 2021 by approximately $408,000 to ensure adequate supply for our restaurants during calendar year 2022.

In order to ensure adequate supply

of baby back ribs for our restaurants for calendar year 2022, on October 4, 2021, we entered into a purchase agreement with our current

rib supplier, whereby we agreed to purchase approximately $10,414,000 of baby back ribs during calendar year 2022 from this vendor at

Our purchase agreement provides for the purchase of “2.25 & Down Baby Back Ribs” (industry jargon for the

weight range in which slabs of baby back ribs are sold), at a monthly cost of the average market price per pound of the prior 4 weeks.

adequate supply of baby back ribs for our restaurants for calendar years 2022 and 2023, we entered into purchase agreements with our current

rib supplier, whereby we agreed to purchase approximately $10.4 million and $ 6.8 million of “2.25 & Down Baby Back Ribs”

(industry jargon for the weight range in which slabs of baby back ribs are sold) from this vendor during calendar years 2022 and 2023,

at prescribed costs, which we believe are competitive.

The decrease in our cost of baby back ribs for calendar year 2023 compared to calendar

year 2022 is due to a decrease in market price.

While we anticipate purchasing

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food and beverage costs, labor costs and other controllable operating expenses.

Our restaurants offer online ordering for to-go sales.

Our restaurants and package liquor stores offer online

ordering for to-go sales and our package liquor stores also offer delivery services by third-party vendors.

and package liquor store hardware and software support is provided by both our internal support services team as well as third-party vendors.

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in our internal systems.

We also transact business through online ordering for both our restaurants and package liquor stores through

third party vendors.

(See Item 1A.

Risk Factors and the discussion of cybersecurity risks on page 28.)

Government Regulation

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and package liquor stores are located, most of our liquor licenses are issued on a "quota license" basis.

Quota licenses are issued

on the basis of a population count established from time to time under the latest applicable census.

Because the total number of liquor

licenses available under a quota license system is limited and restrictions are placed upon their transfer, the licenses have purchase

and resale value based upon supply and demand in the particular areas in which they are issued.

The quota licenses held by us allow the

sale of liquor for on and off premises consumption.

The other liquor licenses held by us or limited partnerships of which we are the general

partner, are restaurant liquor licenses, which do not have quota restrictions or purchase or resale value.

A restaurant liquor license

is issued to every applicant who meets all of the state and local licensing requirements, including, but not limited to zoning and minimum

restaurant size, seating and menu.

The restaurant liquor licenses held by us allow the sale of liquor for on premises consumption only.

Quota licenses are issued on

the basis of a population count established from time to time under the latest applicable census.

Because the total number of liquor licenses

available under a quota license system is limited and restrictions are placed upon their transfer, the licenses have purchase and resale

value based upon supply and demand in the particular areas in which they are issued.

The quota licenses held by us allow the sale of liquor

for on and off premises consumption (the “4 COP Quota Liquor License”).

The other liquor licenses held by us or limited partnerships

of which we are the general partner, are restaurant liquor licenses, which do not have quota restrictions or purchase or resale value.

A restaurant liquor license is issued to every applicant who meets all of the state and local licensing requirements, including, but not

limited to zoning and minimum restaurant size, seating and menu.

The restaurant liquor licenses held by us allow the sale of liquor for

on premises consumption only, (the “4 COP SFS Liquor License”).

All licenses must be renewed annually

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coverage could have a material adverse effect on us.

We currently have no “dram shop” claims.

Our operations are also subject

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tax assessments for unreported or underreported tips.

We are not under investigation or audit, nor have we been assessed for potential

employer-only FICA tax assessments for unreported or underreported tips.

We are also subject to laws relating

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ordinance, rule or regulation under present consideration which would significantly limit or restrict our business as now conducted.

in view of the number of jurisdictions in which we conduct business, and the highly regulated nature of the liquor business, there can

be no assurance that additional limitations may not be imposed in the future, even though none are presently anticipated.

in view of the number of local jurisdictions within the State of Florida in which we conduct business, and the highly regulated nature

of the liquor business, there can be no assurance that additional limitations may not be imposed in the future, even though none are presently

depend on our staff members to successfully execute all aspects of our day-to-day operations.

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competitive labor environment.

If we are unable to retain qualified restaurant 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

If we are unable to hire or retain qualified restaurant 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.

invest resources to ensure our staff receive training in order to maximize their potential.

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service programs, as follows:

Breast Cancer Awareness – We donate $10,000 to local Breast Cancer Support

organizations.

Donated over $100,000 to HOPE mission over five years through our Flanigan’s

Rockin’ Rib Run.

Money is used for disaster and hunger relief all over the world, youth outreach, and community building.

Achievement Awards – We provide schools in Miami-Dade, Broward, and Palm

Beach County with free meal coins and achievement awards throughout the year.

Breast Cancer Awareness – We donate $10,000 to local Breast Cancer Support organizations.

Donated over $100,000 to HOPE mission.

Money is used for disaster and hunger relief all over the world, youth

outreach, and community building.

Achievement Awards – We provide schools in Miami-Dade, Broward, and Palm Beach County with free meal

coins and achievement awards throughout the year.

We give out approximately 50,000 awards every year.

Fishing Tournaments/Marine Conservation – We donate to fishing tournaments

and beach cleanup projects.

Supporting the local community – We donate funds to boy scouts, baseball

teams, schools, etc.

Habitat for Humanity – We have sponsored multiple home building projects

through Habitat for Humanity.

Fishing Tournaments/Marine Conservation – We donate to fishing tournaments and beach cleanup projects.

Supporting the local community – We donate funds to boy scouts, baseball teams, schools, etc.

Habitat for Humanity – We have sponsored multiple home building projects through Habitat for Humanity.

Sheridan House – We donated 500 backpacks to underprivileged children.

We also collect and donate school supplies annually.

Hurricane Relief – We donated $10,000 to the Bahamas after Hurricane Dorian.

We also collect and donate school

supplies annually.

Reclaimed Wood – All of our locations use reclaimed wood on interior walls.

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that reduce the use of plastics and improve recyclability serve to foster pride in our staff.

to our management of human capital during the COVID-19 pandemic were our decisions to 1) obtain adequate personal protective equipment

for our staff and require the use of face masks by our restaurant teams in addition to any jurisdictional requirements in an effort to

keep our teams and customers safe;

2) institute a special paid time off program with the goal of ensuring that hourly staff and managers

could afford to take adequate time off from work to care for their health and the health of their families;

3) implement work from home

support, increased sanitization of high touch, high traffic areas in our restaurants, package liquor stores and corporate offices;

4) for certain periods during the pandemic, with their consent, reduce the salaries of all of our non-executive corporate office personnel

by 20%, the base salaries of our Chief Operating Officer and Chief Financial Officer by 50%, and the waiver by our Chief Executive Officer

of his base salary.

Executive Officers

Positions and Offices Currently Held

Positions and Offices

Currently Held

Office or Position

Chairman of the Board of Directors, Chief Executive Officer and President

Chairman of the Board of Directors, Chief

Executive Officer and President

Chief Operating Officer and Executive Vice President

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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.

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.

During the third quarter of our

fiscal year 2020, we, certain of the entities owning the limited partnership stores (the “LP’s”), franchised stores

(the “Franchisees”) as well as the store we manage but do not own (the “Managed Store”), (collectively, the “Borrowers”),

applied for and received loans from an unrelated third party lender pursuant to the Paycheck Protection Program (the “PPP”)

under the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) enacted March 27, 2020, in the aggregate principal

amount of approximately $13.1 million, (the “PPP Loans”), of which approximately:

(i) $5.9 million was loaned to us;

$4.1 million was loaned to eight of the LP’s;

(iii) $2.6 million was loaned to five of the Franchisees;

and (iv) $0.5 million was

loaned to the Managed Store.

The PPP Loans to the Franchisees and the Managed Store are not included in our consolidated financial statements.

During our fiscal year 2021, we applied for and received forgiveness the entire amount of principal and accrued interest on all PPP Loans,

including Franchisees and the Managed Store.

The novel coronavirus pandemic and related “shelter-in-

place” orders and other governmental mandates relating thereto (collectively, “COVID-19”) adversely affected and will,

in all likelihood continue to adversely affect, our restaurant operations and financial results for the foreseeable future.

During the second quarter of our

fiscal year 2021, certain of the LPs, as well as the Managed Store, applied for and received 2 nd PPP loans, in the aggregate

principal amount of approximately $3.98 million (the “2 nd PPP Loans”), of which approximately:

(i) $3.46 million

was loaned to six of the LP’s;

and (iv) $0.52 million was loaned to the Managed Store.

Loans, which are in the form of notes issued by each of the Borrowers, mature five (5) years from the date of funding (March 23, 2021)

and bear interest at a rate of 1.00% per annum, payable monthly commencing after the U.S.

Small Business Administration makes a determination

of the forgiveness of the 2 nd PPP Loans.

The notes may be prepaid by the applicable Borrower at any time prior to maturity

with no prepayment penalties.

Proceeds from the PPP Loans have been available to the respective Borrower to fund designated expenses,

including certain payroll costs, group health care benefits and other permitted expenses, including rent and interest on mortgages and

other debt obligations incurred before February 15, 2020.

Under the terms of the PPP, up to the entire amount of principal and accrued

interest may be forgiven to the extent the proceeds of the 2 nd PPP Loans are used for qualifying expenses as described in the

CARES Act and applicable implementing guidance issued by the U.S.

Small Business Administration under the PPP.

Subsequent to the end of

our fiscal year 2021, we applied for and received forgiveness of the entire amount of principal and accrued interest on all 2 nd

We do not believe COVID-19 has

had a material adverse effect on our access to supplies or labor, although there can be no assurance that there will not be a significant

adverse impact on our supply chain or access to labor in the future.

We are actively monitoring our food suppliers to assess how they

are managing their operations to mitigate supply flow and food safety risks.

To ensure we mitigate potential supply availability risk,

we are building additional inventory back stock levels when appropriate and we have also identified alternative supply sources in key

product categories including but not limited to food, sanitation and safety supplies.

fiscal year 2021, certain of the entities owning the limited partnership stores (the “LP’s”), as well as the store we

manage but do not own (the “Managed Store”), applied for and received loans from an unrelated third party lender pursuant

to the Paycheck Protection Program (the “PPP”) under the United States Coronavirus Aid, Relief and Economic Security Act (the

“CARES Act”) enacted March 27, 2020, in the aggregate principal amount of approximately $3.98 million, (the “2 nd

PPP Loans”), of which approximately:

(i) $3.35 million was loaned to six of the LP’s;

and (ii) $0.63 million was loaned to

the Managed Store.

The 2 nd PPP Loan to the Managed Store is not included in our consolidated financial statements.

first quarter of our fiscal year 2022, we applied for and received forgiveness of the entire amount of principal and accrued interest

for all 2 nd PPP Loans, including the Managed Store.

COVID-19 has had a material adverse

effect on our access to supplies or labor and there can be no assurance that there will not be a significant adverse impact on our supply

chain or access to labor in the future.

We are actively monitoring our food suppliers to assess how they are managing their operations

to mitigate supply flow and food safety risks.

To ensure we mitigate potential supply availability risk, we are building additional inventory

back stock levels when appropriate and we have also identified alternative supply sources in key product categories including but not

limited to food, sanitation and safety supplies.

As of October 1, 2022, we are

in compliance with the financial covenants contained in our loans with our unrelated third-party institutional lender (the “Institutional

Lender”) under which we owe in the aggregate, approximately $17,096,000 (the “Institutional Loans”).

Lender”) under which we owe in the aggregate, approximately $23,272,000 (the “Institutional Loans”) of our total loans

of approximately $25,389,000.

There can be no assurances that

9 unchanged sentences

General Liability Insurance

We have general liability insurance

which incorporates a deductible of $10,000 per occurrence for both us and the limited partnerships.

Our insurance carrier is responsible

for $1,000,000 coverage per occurrence above our deductible, up to a maxi mum aggregate of $2,000,000 per year.

During our fiscal year

2021, we were able to purchase excess liability insurance at a reasonable premium, whereby our excess insurance carrier is responsible

for $10,000,000 coverage above our primary general liability insurance coverage.

We are uninsured against liability claims in excess of

$11,000,000 per occurrence and in the aggregate.

We are in discussions to secure general liability and excess liability insurance for

the period commencing after the expiration of the current policies on December 30, 2021.

For the policy year beginning

December 30, 2021, we have general liability insurance which incorporates a deductible of $10,000 per occurrence for both us and the limited

partnerships.

Our insurance carrier is responsible for $1,000,000 coverage per occurrence above our deductible, up to a maximum aggregate

of $2,000,000 per year.

We were also able to purchase excess liability insurance at a reasonable premium, whereby our excess insurance

carrier is responsible for $10,000,000 coverage above our primary general liability insurance coverage.

We are uninsured against liability

claims in excess of $11,000,000 per occurrence and in the aggregate.

We secured general liability and excess liability insurance for the

period commencing after the expiration of the current policies on December 30, 2022.

Subsequent Events for a discussion of

general liability and excess liability insurance for the period commencing December 30, 2022 on page 38.)

Our general policy is to settle

7 unchanged sentences

circumstances change.

Our accruals are included in the accompanying consolidated balance sheets in the caption "Accounts payable and

accrued expenses".

A significant unfavorable judgment or settlement against us in excess of our liability insurance coverage could

have a materially adverse effect on the Company.

Our accruals are included in the accompanying consolidated balance sheets in the caption "Accounts payable and accrued

A significant unfavorable judgment or settlement against us in excess of our liability insurance coverage could have a materially

adverse effect on the Company.

Windstorm Insurance;

3 unchanged sentences

those caused by windstorm, such as a hurricane.

We are in discussions to secure property insurance for the period commencing after the

expiration of the current policy on December 30, 2021.

For property losses caused by windstorm, the property insurance has a fixed deductible

2 unchanged sentences

per location, per occurrence.

We are in discussions to secure property insurance for the period commencing after the expiration of the

current policy on December 30, 2021.

We secured property insurance for the period commencing after the expiration of the current policy on December

Subsequent Events for a discussion of property insurance for the period commencing December 30, 2022 on page 38.)

Competition and the Company's

7 unchanged sentences

directly or indirectly with local retailers and discount “superstores”.

Due to the competitive nature of the liquor industry in

South Florida, we have had to adjust our pricing to stay competitive, including meeting all competitors’ advertisements.

Such practices

will continue in the package liquor business.

We believe that we have a competitive position in our market because of widespread consumer

recognition of the "Big Daddy's Liquors" and “Big Daddy’s Wine & Liquors” names.

Due to the competitive nature of the liquor industry

in South Florida, we have had to adjust our pricing to stay competitive, including meeting all competitors’ advertisements subject

to certain limitations.

Such practices will continue in the package liquor business.

We believe that we have a competitive position in

our market because of widespread consumer recognition of the "Big Daddy's Liquors" and “Big Daddy’s Wine & Liquors”

Our restaurants compete directly

or indirectly with many well-established competitors, both nationally and locally owned.

We believe that we have a competitive position

in our market because of widespread consumer recognition of the "Flanigan’s Seafood Bar and Grill" and “Flanigan’s”

Effective October 3, 2021 and then effective

December 19, 2021 we increased menu prices for our food offerings to target an increase to our food revenues of approximately 2.38% and

3.34% annually, respectively, to offset higher food costs and higher overall expenses and effective December 12, 2021 we increased menu

prices for our bar offerings to target an increase to our bar revenues of approximately 7.80% annually.

Prior to these increases, we previously

raised menu prices in the third quarter of our fiscal year 2021.

We believe that we have a competitive position in our market because

of widespread consumer recognition of the “Flanigan’s Seafood Bar and Grill" and “Flanigan’s” names.

We have many well-established

10 unchanged sentences

Seafood Bar and Grill", and “Flanigan’s”.

Our right to the use of the "Big Daddy's" service mark is set

forth under a consent decree of a federal court entered into by us in settlement of federal trademark litigation.

The consent decree and

the settlement agreement allow us to continue to use and to expand our use of the "Big Daddy's” service mark in connection with

our package liquor sales in Florida, while restricting future liquor sales in Florida under the "Big Daddy's" name by the other

party who has a federally registered service mark for "Big Daddy's" use in the restaurant business.

The federal court retained

jurisdiction to enforce the consent decree.

We have acquired registered Federal trademarks on the principal register for our “Big

Daddy’s Liquors”, "Flanigan's" and “Flanigan’s Seafood Bar and Grill” service marks.

We operate our sports bar under the service mark;

“Brendan’s Sports

Our right to the use of the "Big Daddy's" service mark is set forth under a consent decree of a federal court entered into

by us in settlement of federal trademark litigation.

The consent decree and the settlement agreement allow us to continue to use and to

expand our use of the "Big Daddy's” service mark in connection with our package liquor sales in Florida, while restricting future

liquor sales in Florida under the "Big Daddy's" name by the other party who has a federally registered service mark for "Big Daddy's"

use in the restaurant business.

The federal court retained jurisdiction to enforce the consent decree.

We have acquired registered Federal

trademarks on the principal register for our “Big Daddy’s Liquors”, "Flanigan's" and “Flanigan’s Seafood

Bar and Grill” service marks.

The standard symbolic trademark

associated with our facilities and operations is the bearded face and head of "Big Daddy" which is predominantly displayed at

all "Flanigan's" facilities and all "Big Daddy's" facilities throughout the country.

The face comprising this trademark

is that of the Company’s founder, Joseph "Big Daddy" Flanigan, and is a federally registered trademark owned by us.

associated with our facilities and operations is the bearded face and head of "Big Daddy" which is predominantly displayed at all "Flanigan's"

facilities and all "Big Daddy's" facilities throughout the country.

The face comprising this trademark is that of the Company’s

founder, Joseph "Big Daddy" Flanigan, and is a federally registered trademark owned by us.

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 1. Business