What changed in this filing

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Item 1. Business

2023-12-29 compared with 2023-01-18 · 266 added, 224 removed, 441 unchanged (53% of the section changed)

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.

As of September 30,

2023, Flanigan’s Enterprises, Inc., a Florida corporation, together with its subsidiaries (“we”, “our”,

“ours” and “us” as the context requires), (i) operates 31 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

and franchises an additional five units, consisting of two restaurants (one of which we operate) and three combination restaurant/package

liquor stores.

The table 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 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”.

(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 September

30, 2023 and as compared to October 1, 2022.

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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____________________

(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.

(1) 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”).

(2) 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.

During the first quarter of our fiscal year 2023,

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 (Store #19P).

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 (Store #19R).

This restaurant was not operational during our

fiscal year 2023, but we believe this restaurant will be operational during our fiscal year 2024.

(3) During the second quarter of our fiscal year 2023,

our package liquor store located at 11225 Miramar Parkway #245, Miramar, Florida (Store #24) opened for business.

(4) 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 (the

“2022 Sunrise Restaurant”).

During the third quarter of our fiscal year 2023, our limited partnership owned restaurant located

at 11225 Miramar Parkway #250, Miramar, Florida (Store #25) opened for business (the “2023 Miramar Restaurant”).

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

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

History and Development of Our Business

We were incorporated in Florida

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

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).

to 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 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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Flanigan’s Fish Company, LLC

Liquor Store Operations

Package Liquor Store Operations

Our package liquor stores emphasize

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of our units have "night windows" with extended evening hours.

Company-Owned

Package Liquor Stores .

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 .

We currently franchise three package liquor stores, all in the South Florida area, all of which are operated

under the name “Big Daddy’s Liquors”.

Of the three franchised package liquor stores, two are jointly operated with our

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

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.

Company-Owned Package Liquor

As of our fiscal year ended September 30, 2023, we own and operate eleven 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.

Franchised Package Liquor Stores .

We currently franchise three package liquor stores, all in the South Florida area, all of which are operated under the name “Big

Daddy’s Liquors”.

Of the three franchised package liquor stores, two are jointly operated with our franchisee’s restaurant

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

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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are recognized as revenue when sales are made by franchisees.

Restaurant Operations

Our restaurants provide a neighborhood

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depending upon demand and local law.

Company-Owned

Restaurants .

We own and operate nine restaurants all under our service mark “Flanigan’s Seafood Bar and Grill”

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

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 .

We franchise five restaurants, all of which operate under our service mark “Flanigan’s Seafood Bar and

Grill”, two of which operate as a restaurant only, two of which operate jointly with a franchisee operated “Big Daddy’s

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.

Company-Owned Restaurants .

We own and operate nine restaurants all under our service mark “Flanigan’s Seafood Bar and Grill” three of which are jointly

operated with package liquor stores we own.

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

our restaurant destroyed by fire.

We believe this restaurant will be operational during our fiscal year 2024.

Franchised Restaurants .

We franchise five restaurants, all of which operate under our service mark “Flanigan’s Seafood Bar and Grill”, two of

which operate as a restaurant only, two of which operate jointly with a franchisee operated “Big Daddy’s 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 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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are recognized as revenue when sales are made by franchisees.

Restaurants Owned by Affiliated

Limited Partnerships

Restaurants Owned by Affiliated Limited Partnerships

We have invested along with others,

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

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

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

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.

In addition to being a limited

partner in these limited partnerships, we are the sole general partner of ten 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.

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 September 30, 2023, all limited partnerships, with

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

business in April, 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 our service marks “Flanigan’s Seafood Bar and Grill” or “Flanigan’s”,

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

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This limited partnership has returned to its investors all of their initial

cash invested and we receive an annual management fee equal to one-half (1/2) of the cash available for distribution by this limited partnership.

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

Pinecrest, Florida

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We are the sole general partner

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

in this limited partnership which has owned and operated a restaurant in Miramar, Florida under our “Flanigan’s” service

mark since April 18, 2023.

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,

24.0% of the 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 2023, this limited

partnership has returned to its investors approximately 10.0% of their initial cash invested.

Fort Lauderdale, Florida

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partnership and for accounting purposes, we do not consolidate the operations of this limited partnership into our operations.

Management Agreement for “The

Whale’s Rib” Restaurant

Management Agreement for “The Whale’s Rib” Restaurant

Since January 2006, we have managed

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The restaurant is owned by a third party unaffiliated with us.

In exchange for providing management, bookkeeping and related services, we receive one-half (½) of the net profit, if any, from the

operation of the restaurant.

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

In exchange for providing management, bookkeeping and related services, we receive one-half (½) of the net profit, if any, from

the operation of the restaurant.

For our fiscal years ended September 30, 2023 and October 1, 2022, we generated $400,000 of revenue each

fiscal year from providing these management services.

Operations and Management

We emphasize systematic operations

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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

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by utilizing multiple qualified suppliers for substantially all our food products.

We negotiate short and long term

We negotiate short-term and long-term

agreements for certain of our principal food product requirements, depending on market conditions and expected demand.

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(industry jargon for the weight range in which slabs of baby back ribs are sold) from this vendor during calendar years 2023 and 2024

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.

respectively, at prescribed costs, which we believe are competitive.

The increase in our cost of baby back ribs for calendar year 2024

compared to calendar year 2023 is due to our purchase of ribs for Store #25, Miramar, Florida being open for the entire calendar year

and Store #19, Hollywood, Florida anticipated to be open for a part of the calendar year, offset by a decrease in market price.

While we anticipate purchasing

all of our rib supply from this vendor, we believe there are several other alternative vendors available, if needed.

Information Technology

restaurant and package liquor store point-of-sale and back-office systems provide information regarding daily sales, cash receipts, inventory,

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our onsite and external data centers, so all data is replicated nightly between the sites.

require cybersecurity awareness training for all staff members with access to our cyber systems.

We also maintain cyber risk insurance

coverage to further reduce our risk profile.

Security of our financial data and other sensitive information remains a high priority

for us, led by our information technology department.

In an effort to further secure our customers’ credit card information, we

employ an encryption and tokenization platform for all credit card transactions in our restaurants, ensuring no credit card data is stored

in our internal systems.

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

third party vendors.

We require cybersecurity awareness training for all staff members with

access to our cyber systems.

We also maintain cyber risk insurance coverage to further reduce our risk profile.

Security of our financial

data and other sensitive information remains a high priority for us, led by our information technology department.

In an effort to further

secure our customers’ credit card information, we employ an encryption and tokenization platform for all credit card transactions

in our restaurants, ensuring no credit card data is stored 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.)

Risk Factors and the discussion of cybersecurity

risks on page 12.)

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 “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”).

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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other requirements of the TRAC agreement, we reduce the likelihood of potential employer-only FICA

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.

(Federal Insurance Contributions Act) 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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of the liquor business, there can be no assurance that additional limitations may not be imposed in the future, even though none are presently

Human Capital

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

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our financial performance.

Development and Training

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

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Our training programs allow us to fill certain of our management positions with internal candidates.

Benefits and Wellness

believe access to healthcare is a compelling benefit for many staff members and we offer healthcare benefits to our hourly staff members

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We attempt to provide a robust suite of benefits and wellness offerings.

Employee Engagement

to our staff members is an essential part of building an engaged workforce, and we provide avenues for staff to share their ideas and

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We consider our labor relations to be favorable.

key aspect of our culture is giving back to the communities where our staff live and work, and uniting our staff members around charitable

causes personal to them.

We periodically donate philanthropic organizations through campaigns designed to engage our staff company-wide

service programs, as follows:

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

key aspect of our culture is giving back to the communities where our staff live and work, and uniting our staff members around

charitable causes personal to them.

We periodically donate to philanthropic organizations through campaigns designed to engage our

staff company-wide service programs, as follows:

Breast Cancer Awareness – We donate $10,000 annually 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.

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.

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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.

We also collect and donate school supplies annually.

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

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Office or Position

Chairman of the Board of Directors, Chief

Executive Officer and President

Chairman of the Board of Directors, Chief Executive Officer and

Chief Operating Officer and Executive Vice President

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Vice President of Package Operations

----------------

(1) Chairman of the Board of Directors, Chief Executive Officer since 2005;

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may make discretionary profit sharing and/or matching contributions.

During our fiscal years ended October 1, 2022 and October 2, 2021,

During our fiscal years ended September 30, 2023 and October 1, 2022,

the Board of Directors approved discretionary matching contributions totaling $70,000 and $71,000, respectively.

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

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.

The novel coronavirus pandemic, (“COVID-19”)

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

The Department of Health and Human Services (HHS) permitted the federal Public Health Emergency for COVID-19 (PHE) declared by

the Secretary of the Department of Health and Human Services (Secretary) under Section 319 of the Public Health Service (PHS) Act to expire

at the end of the day on May 11, 2023.

During the second quarter of our

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limited to food, sanitation and safety supplies.

As of October 1, 2022, we are

As of September 30, 2023, we are

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

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of approximately $23,128,000.

During the first quarter of our

fiscal year 2023, we satisfied the principal balance and all accrued interest due on our $5.5 million term loan to our unrelated lender.

The outstanding principal balance ($367,000) and accrued interest ($-0-) were paid in full on December 28, 2022.

In February 2023, we

determined that as of December 31, 2022, we did not meet the required Post-Distribution Basic Fixed Charge Coverage Ratio (the

“Post-Distribution/Fixed Charge Covenant”) contained in each of our six (6) loans (the “Institutional

Loans”) with our unrelated third party institutional lender (the “Institutional Lender’).

On February 23, 2023, we

received from the Institutional Lender, a written waiver of the non-compliance with the Post-Distribution/Fixed Charge Covenant (the

“Covenant Non-Compliance”), pursuant to which, among other things, the Institutional Lender waived (1) the

non-compliance as of December 31, 2022 and (2) their right to exercise certain remedies under the Institutional Loans, including the

right to accelerate the indebtedness owed by us thereunder, resulting in the indebtedness under the Institutional Loans to be

immediately due and payable, which would have a material adverse effect on the Company.

The Post-Distribution/Fixed Charge Covenant

requires we maintain a ratio of at least 1.15 to 1.00 and for the twelve (12) months ended September 30, 2023 our ratio was

calculated to be 1.40 to 1.00.

We have prepared projections going forward and expect to be in compliance.

As a result, our

classification of debt is appropriate as of September 30, 2023.

There can be no assurances that

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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.)

During the fourth quarter of our fiscal year 2023 we converted the deductible of $10,000 per occurrence for both us and

the limited partnerships to a $10,000 self-insured retention per occurrence.

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, 2023.

The $10,000 self-insured retention per occurrence increases to $50,000 for us but remains the same at $10,000 for the

limited partnerships for the period commencing after the expiration of the current policies on December 30, 2023.

Events for a discussion of general liability and excess liability insurance for the period commencing December 30, 2023 on page 31.)

Our general policy is to settle

1 unchanged sentence

Under our current liability insurance policy, certain expenses incurred in defending a claim, including attorney's fees, are a

part of our $10,000 deductible.

part of our $10,000 deductible and/or our self-insured retention.

In accordance with accounting

3 unchanged sentences

circumstances change.

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.

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.

Property Insurance;

Windstorm Insurance;

For the policy year beginning

December 30, 2021, our property insurance is a one (1) year policy with an unaffiliated third party insurance carrier, including coverage

for properties leased by us and our consolidated limited partnerships, and provides for full insurance coverage for property losses, including

those caused by windstorm, such as a hurricane.

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

of $100,000, plus 5% of all insured losses, per occurrence.

For all other property losses, the property insurance has deductibles of $10,000

per location, per occurrence.

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

the policy year beginning December 30, 2022, our property insurance is a one (1) year policy with an unaffiliated third party insurance

carrier, including coverage for properties leased by us and our consolidated limited partnerships, and provides for full insurance coverage

for property losses, including those caused by windstorm, such as a hurricane.

For property losses caused by windstorm, the property

insurance has a fixed deductible of $100,000, plus 5% of all insured losses, per occurrence.

For all other property losses, the property

insurance has deductibles of $10,000 per location, per occurrence.

We secured property insurance for the period commencing after the

expiration of the current policy on December 30, 2023.

Subsequent Events for a discussion of property insurance for the

period commencing December 30, 2023 on page 31.)

Insurance Premiums

Prior to fiscal year 2023,

we financed our annual insurance premiums.

Due to higher interest rates, during the first quarter of our fiscal year 2023, for the

policy year commencing December 30, 2022, we paid the premiums for property, general liability, excess liability and terrorist

policies, totaling approximately $3.281 million, which includes coverage for our franchisees (which is $658,000), which are not

included in our consolidated financial statements.

Due to continuing higher interest rates, for the policy year commencing December

30, 2023 we will pay the premiums for property, general liability, excess liability, crime and terrorism policies in full without

Subsequent Events for a discussion of property, general liability, excess liability, crime and terrorism

insurance policies for the period commencing December 30, 2023 on page 31.)

We paid the $3,281,000 annual

premium amounts on January 9, 2023, which includes coverage for our franchisees which are not included in our consolidated financial statements.

Competition and the Company's Market

The liquor and hospitality industries

14 unchanged sentences

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

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.

Effective March 26, 2023, we increased menu prices

for our food offerings to target an increase to our food revenues of approximately 2.06% annually and on March 20, 2023 we increased menu

prices for our bar offerings to target an increase to our bar revenues of approximately 5.65% annually to offset higher food and liquor

costs and higher overall expenses.

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

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

11 unchanged sentences

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.

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 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