What changed in this filing

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Item 1A. Risk Factors

2025-12-19 compared with 2024-12-27 · 380 added, 320 removed, 320 unchanged (69% of the section changed)

An investment in our common stock

involves a high degree of risk.

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

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

An investment in our common

stock involves a high degree of risk.

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

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

Additional risks and uncertainties

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

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

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

financial condition and results of operations.

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

and you may lose part or all of your investment.

Certain statements in this report

contain forward-looking information.

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

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

Forward-looking statements reflect management’s current

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

“will” and other similar terminology.

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

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

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

New risks and

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

We assume no obligation to

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

except as required by applicable laws and regulations.

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

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

The occurrence of any of the following risks could

harm our business, financial condition and results of operations.

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

risks and uncertainties and you may lose part or all of your investment.

Certain statements in this

report contain forward-looking information.

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

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

Forward-looking statements reflect management’s

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

“may”, “will” and other similar terminology.

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

a number of risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking

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

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

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

developments, except as required by applicable laws and regulations.

Risks Related to Our Business

If we are unable to

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

If we are unable

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

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

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

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

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

materially adversely affect our financial performance.

The market for qualified talent continues to

be competitive and we must continue to offer competitive wages, benefits and workplace conditions to retain qualified employees.

experienced and may in the future experience challenges in hiring and retaining restaurant and store employees and in maintaining full

restaurant staffing in various locations, which could result in decreased employee and customer satisfaction.

A shortage of qualified

candidates who meet legal work authorization requirements, failure to hire, train and retain new employees in a timely manner or higher

than expected turnover levels could affect our ability to open new restaurants, grow sales at existing restaurants or meet our labor

cost objectives.

Anticipated changes in immigration laws and regulations could decrease the pool of candidates with legal work authorization,

cause disruption in the workforce for all companies that rely on hourly workers and increase the costs, time and requirements to hire

new employees.

In addition, failure to adequately monitor and proactively respond to employee dissatisfaction could lead to poor customer

satisfaction, higher turnover and litigation, which could negatively impact our financial results.

If we are unable to attract

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

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

affect our financial performance.

We have experienced

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

Our sales and profit growth could be

adversely affected if comparable restaurant sales increases are less than we expect, and we may not successfully increase comparable restaurant

Our sales and profit growth could be adversely

affected if comparable restaurant sales increases are less than we expect, and we may not successfully increase comparable restaurant

sales or they may decrease.

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This is because

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

spread over a higher sales base.

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

be spread over a higher sales base.

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

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restaurant sales depends on many factors, including:

perceptions of the Flanigan’s brand;

competition, especially from an increasing number of competitors in the fast casual segment of the restaurant industry and from other restaurants whose strategies overlap ours, as well as from grocery stores, meal kit delivery services and other dining options;

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

changes in consumer preferences and discretionary spending;

our ability to increase menu prices without adversely affecting our existing business;

weather, natural disasters and other factors limiting access to our restaurants;

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

As a result, it is possible that we will not achieve our targeted comparable

restaurant sales or that the change in comparable restaurant sales could be negative.

A number of these factors are beyond our control

and therefore we cannot assure that we will be able to sustain comparable restaurant sales increases.

● perceptions

of the Flanigan’s brand;

● competition,

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

industry and from other restaurants whose strategies overlap ours, as well as from grocery

stores, meal kit delivery services and other dining options;

our strategies effectively, including our marketing and branding strategies;

in consumer preferences and discretionary spending;

ability to increase menu prices without adversely affecting our existing business;

natural disasters and other factors limiting access to our restaurants;

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

As a result, it is possible

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

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

sales increases.

High unemployment, instability in the housing

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be adversely affected.

Intense competition in the restaurant and package liquor store industry

could prevent us from increasing or sustaining our revenues and profitability.

The restaurant and package liquor

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

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

There are a number of well-established competitors with

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

Intense competition in the restaurant and

package liquor store industry could prevent us from increasing or sustaining our revenues and profitability.

The restaurant and package

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

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

There are a number of well-established competitors

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

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

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restaurants and/or stores that operate with similar concepts.

Any inability to compete successfully

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

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

We may also need to

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

that may develop in the future.

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

modifications will not reduce our profitability.

New information or attitudes regarding diet

and health could result in changes in regulations and consumer eating habits that could adversely affect our revenues.

Any inability to compete

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

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

We may also need

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

concepts that may develop in the future.

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

that these modifications will not reduce our profitability.

New information or attitudes regarding

diet and health could result in changes in regulations and consumer eating habits that could adversely affect our revenues.

Regulations and consumer

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customer demand and have an adverse impact on our revenues.

Adverse public or medical opinions about health

effects of consuming our products as well as negative publicity about us, our restaurants and/or package liquor stores and about others

across the food and liquor industry supply chain, whether or not accurate, could negatively affect us.

Restaurant operators have received more scrutiny from

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

An unfavorable report

on the products we use in our menu, the size of our portions or the consumption of those items could influence the demand for our offerings.

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

operating issues stemming from a single restaurant, a limited number of restaurants, restaurants operated by others or generally in the

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

A decrease in guest traffic

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

Adverse public or medical opinions about

health effects of consuming our products as well as negative publicity about us, our restaurants and/or package liquor stores and about

others across the food and liquor industry supply chain, whether or not accurate, could negatively affect us.

Restaurant operators have

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

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

the demand for our offerings.

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

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

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

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

Our inability to successfully and sufficiently

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experienced any adverse effects from past menu price increases.

Increases in Food Costs, Raw Materials and Other

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

Our operating margins depend on,

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

Increases in food costs, raw materials

and other supplies and services due to inflation may have a material adverse impact on our financial performance.

Our operating margins depend

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

costs, utilities and other supplies and services due to inflation.

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Dairy costs can also fluctuate due to government regulation.

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

costs, and other expenses that they pass through to their customers, which could result in higher costs for goods and services supplied

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

and benefit costs, and other expenses that they pass through to their customers, which could result in higher costs for goods and services

supplied to us.

Shortages or interruptions in the supply

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or interruptions in our supply of food offering ingredients and liquor inventory could adversely affect our financial results.

Our business could be materially adversely affected

if we are unable to expand in a timely and profitable manner.

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

We have experienced delays in

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

Our business could be materially adversely

affected if we are unable to expand in a timely and profitable manner.

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

We have experienced delays

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

During our fiscal year

we opened our restaurant in Hollywood, Florida (Store #19R) which replaced our restaurant destroyed by fire that previously operated at

2024, we opened our restaurant in Hollywood, Florida (Store #19R) which replaced our restaurant destroyed by fire that previously operated

at that site.

Our ability to open and profitably

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operating results and cash flow.

Changes in customer preferences for casual dining

styles could adversely affect financial performance.

Changing customer preferences,

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

We offer a large variety of entrees, side dishes

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

A change from this

dining style may have an adverse effect on our business.

Our success depends substantially on the value

of our brands and our reputation for offering guests a satisfactory experience.

We believe we have built a reasonably

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

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

Any incident that erodes consumer trust in

or affinity for our brands could be harmful to us.

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

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

Our marketing and advertising strategies may

not be successful, which could adversely impact our business.

Changes in customer tastes and preferences,

spending patterns and demographic trends could cause sales to decline and adversely affect financial performance.

in customer preferences, general economic conditions, discretionary spending priorities, demographic trends, traffic patterns and the

type, number and location of competing restaurants affect the restaurant industry.

Our success depends to a significant extent on consumer

confidence, which is influenced by general economic conditions and discretionary income levels.

Our sales may decline during economic

downturns, which can be caused by various economic factors such as high gasoline prices, or during periods of uncertainty.

decline in consumer confidence or a decline in spending on casual dining away from home could cause our sales, operating results, business

or financial condition to decline.

We offer a large variety of entrees, side dishes and desserts and our continued success depends, in

part, on the popularity of our cuisine and casual style of dining.

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

If we fail to adapt to changes in customer preferences and trends, we may lose customers and our sales may deteriorate.

Our success depends substantially on the

value of our brands and our reputation for offering guests a satisfactory experience.

We believe we have built

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

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

Any incident that erodes consumer

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

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

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

Our marketing and advertising strategies

may not be successful, which could adversely impact our business.

From time to time, we introduce

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

Labor shortages, an increase in labor costs, or inability to attract

employees could harm our business.

Our employees are essential to

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

If we are unable to attract and retain enough

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

our results may be negatively affected.

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

could result in higher labor costs.

Labor shortages, an increase in labor costs, or inability to

attract employees could harm our business.

Our employees are essential

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

If we are unable to attract and retain

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

experience, our results may be negatively affected.

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

wages, which could result in higher labor costs.

Due to our geographic locations, restaurants

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While we currently expect to pursue the renewal of

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

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

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

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

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

Due to our geographic locations, we may not

be able to acquire windstorm insurance coverage or adequate windstorm insurance coverage at a reasonable rate.

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

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

If we have to close any restaurants due to difficulties

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

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

Due to our geographic locations, we may

not be able to acquire windstorm insurance coverage or adequate windstorm insurance coverage at a reasonable rate.

Due to the anticipated active

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upon our financial condition and/or results of operations.

Our inability or failure to execute a comprehensive business continuity

plan at our restaurant support centers following a disaster or force majeure event could have a material adverse impact on our business.

Our inability or failure to execute a comprehensive

business continuity plan at our restaurant support centers following a disaster or force majeure event could have a material adverse

impact on our business.

of our corporate systems and processes and corporate support for our restaurant and package liquor store operations are centralized at

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hurricanes and other natural disasters and back up and off-site locations for recovery of electronic and other forms of data and information.

However, if we are unable to fully implement our disaster recovery plans, we may experience delays in recovery of data, inability to perform

vital corporate functions, tardiness in required reporting and compliance, failures to adequately support field operations and other breakdowns

in normal communication and operating procedures that could have a material adverse effect on our financial condition, results of operation

and exposure to administrative and other legal claims.

In addition, these threats are constantly evolving, which increases the difficulty

of accurately and timely predicting, planning for and protecting against the threat.

As a result, our disaster recovery procedures and

business continuity plans security may not adequately address all threats we face or protect us from loss.

Inability to attract and retain customers could

affect results of operations.

We take pride in our ability to

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

results may be negatively affected.

However, if we are unable to fully implement our disaster recovery plans, we may experience delays in recovery of data, inability to

perform vital corporate functions, tardiness in required reporting and compliance, failures to adequately support field operations and

other breakdowns in normal communication and operating procedures that could have a material adverse effect on our financial condition,

results of operation and exposure to administrative and other legal claims.

In addition, these threats are constantly evolving, which

increases the difficulty of accurately and timely predicting, planning for and protecting against the threat.

As a result, our disaster

recovery procedures and business continuity plans may not adequately address all threats we face or protect us from loss.

Inability to attract and retain customers

could affect results of operations.

We take pride in our ability

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

and results may be negatively affected.

A failure to comply with governmental regulations

could harm our business and our reputation.

We are subject to regulation by

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

the development and operation of restaurants.

We are subject to regulation

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

to the development and operation of restaurants.

These regulations include matters relating to the following:

the preparation and sale of food and alcoholic beverages;

building construction and access;

zoning requirements;

the environment.

Our facilities are licensed and

subject to regulation under state and local fire, health and safety codes.

The construction and remodeling of restaurants will be subject

to compliance with applicable zoning, land use and environmental regulations.

We may not be able to obtain necessary licenses or other

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

Various federal and state labor

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

authorization requirements.

preparation and sale of food and alcoholic beverages;

● employment;

construction and access;

requirements;

Our facilities are licensed

and subject to regulation under state and local fire, health and safety codes.

The construction and remodeling of restaurants will be

subject to compliance with applicable zoning, land use and environmental regulations.

We may not be able to obtain necessary licenses

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

Various federal and state

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

and work authorization requirements.

In particular, we are subject to federal immigration regulations.

Given the location of many of our restaurants,

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

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

Our business can be adversely affected by negative

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

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

Unfavorable publicity could negatively impact public

perception of our brands.

Given the location of many of

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

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

We are required to comply

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

Failure to comply with

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

results of operations or cash flows.

We may face liability under dram shop

Our sale of alcoholic beverages

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

beverages to an intoxicated person.

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

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

Failure to comply with these

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

of operations or cash flows.

We may face liability under dram shop statutes.

Our sale of alcoholic

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

that served alcoholic beverages to an intoxicated person.

If we receive a judgment substantially in excess of our insurance

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

be materially and adversely affected.

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

Business—Government Regulation”

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

Business - Government Regulation” for a discussion of the regulations with which we must comply.

Concerns relating

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

In years past, several

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

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

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

In years past, several nationally

known restaurants experienced outbreaks of food poisoning believed to be caused by E.coli contained in fresh spinach, which is not included

in any of the items on our menu, Asian and European countries experienced outbreaks of avian flu and incidents of “mad cow”

disease have occurred in Canadian and U.S.

cattle herds.

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

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

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

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

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

of affected ingredients and cause changes in consumer preference.

As a result, our sales could decline.

Instances of food-borne

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

or the restaurant industry, which could adversely affect sales.

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

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

to produce the revenue needed to make our restaurants profitable.

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

to temporarily close some restaurants.

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

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

Instances of food-borne illnesses,

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

industry, which could adversely affect sales.

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

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

the revenue needed to make our restaurants profitable.

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

close some restaurants.

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

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

If we are unable to protect our customers’

credit card data, we could be exposed to data loss, litigation and liability, and our reputation could be significantly harmed.

In connection with credit card

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

Although we use private networks, third

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

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

to this information.

In connection with credit

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

Although we use private networks,

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

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

access to this information.

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

or disrupt our operations.

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

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

We have not experienced any security breaches

If we experience a significant failure in or

interruption of certain key information technology systems, our business could be adversely impacted.

We use a variety of applications

and systems to manage the flow of information securely within each of our restaurants and within our centralized corporate infrastructure.

The services available within our systems and applications include restaurant and store operations, supply chain, inventory, scheduling,

training, human capital management, financial tools and data protection services.

The restaurant and store structure is based primarily

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

It records sales transactions,

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

The system also allows employees to enter

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

Select information that is captured from this system at each restaurant

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

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

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

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

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

Any failure of these systems to operate effectively,

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

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

impacting our ability to manage our business.

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

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

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

adversely affected.

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

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

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

We have not experienced any security

breaches to date.

If we experience a significant failure

in or interruption of certain key information technology systems, our business could be adversely impacted.

We use a variety of

applications and systems to manage the flow of information securely within each of our restaurants and within our centralized

corporate infrastructure.

The services available within our systems and applications include restaurant and store operations, supply

chain, inventory, scheduling, training, human capital management, financial tools and data protection services.

The restaurant and

store structure is based primarily on a point-of-sale system that operates locally and is integrated with other functions necessary

to operations.

It records sales transactions, receives out of store orders and authorizes, batches and transmits credit card

transactions.

The system also allows employees to enter time clock information and to produce a variety of management reports.

Select information that is captured from this system at each restaurant or store is collected in the central corporate

infrastructure, which enables management to continually monitor operating results.

Our ability to efficiently and effectively manage

our business depends significantly on the reliability and capacity of these and other systems and our operations depend

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

These systems may be vulnerable

to attacks or outages from security breaches, viruses and other disruptive problems, as well as from physical theft, fire, power

loss, telecommunications failure or other catastrophic events.

Any failure of these systems to operate effectively, whether from

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

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

negatively impacting our ability to manage our business.

If our information technology systems fail and our redundant systems or

disaster recovery plans are not adequate to address such failures, or if our business interruption insurance does not sufficiently

compensate us for any losses that we may incur, our revenues and profits could be reduced and the reputation of our brand and our

business could be materially adversely affected.

In addition, remediation of any problems with our systems could result in

significant, unplanned expenses.

The effect of changes to U.S.

healthcare laws may increase our healthcare

costs and negatively impact our financial results.

laws may increase our healthcare costs and negatively impact our financial results.

We offer eligible full-time

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Governmental regulation in one or more

of the following areas may adversely affect our existing and future operations and results, including by harming our ability to open new

restaurants or increasing our operating costs.

of the following areas may adversely affect our existing and future operations and results, including by harming our ability to open

new restaurants or increasing our operating costs.

and immigration regulations

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

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

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

workers’ compensation rules and anti-discrimination laws.

Complying with these rules subjects us to substantial expense and can

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

For example, historically, lawsuits have been filed

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

We could suffer losses from

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

In addition, several

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

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

We are subject to various federal and state laws governing our relationship

with our employees, including wage and hour laws, requirements to provide meal and rest periods or other benefits, healthcare, family

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

related requirements, insurance and workers’ compensation rules and anti-discrimination laws.

Complying with these rules subjects

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

For example, historically,

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

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

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

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

Changes in U.S.

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

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

compliance expenses.

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

From time to time,

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

Congress and Department of Homeland Security from time

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

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

Congress and Department of Homeland Security from

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

Changes in immigration

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

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

Although we require all workers to provide us with

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

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

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

Although we require all workers to provide

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

be unauthorized workers.

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

government to

verify employment eligibility for all employees throughout our company.

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

identify all applicants who are ineligible for employment.

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

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

Termination of

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

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

We could also become subject to fines, penalties

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

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

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

However, use of E-Verify does not guarantee that

we will properly identify all applicants who are ineligible for employment.

Unauthorized workers may subject us to fines or penalties

and we could experience adverse publicity that negatively affects our brand and may make it more difficult to hire and keep qualified

Termination of a significant number of employees would disrupt our operations including slowing our throughput and could also

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

We could also become subject

to fines, penalties and other costs related to claims that we did not fully comply with all recordkeeping obligations of federal

and state immigration compliance laws.

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

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

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

local, state and federal laws and regulations apply to the collection, use, retention, protection, disclosure, transfer and other processing

of personal data.

These privacy and data protection laws and regulations are quickly evolving, with new or modified laws and regulations

proposed and implemented frequently and existing laws and regulations subject to new or different interpretations and enforcement.

with these laws and regulations can be costly.

If we fail or are perceived to have failed to comply with applicable privacy and data protection

laws, or fail to properly respond to or honor consumer requests under any of the foregoing privacy laws, we could be subject to enforcement

actions and regulatory investigations, or claims for damages by guests and other affected individuals or parties, or incur fines and damage

to our brand reputation, any of which could have a material adverse effect on our operations, financial performance, and business.

amount and scope of insurance we maintain may not cover all types of claims that may arise.

licensure, zoning and other regulation

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

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

to satisfy claims relating to environmental laws.

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

damages and other remedies.

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

money damages and other remedies.

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

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

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

Our customers

could file complaints or lawsuits against us alleging that we are responsible for some illness or injury they suffered at or after a

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

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

and advertising practices.

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

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

A significant judgment for any claims against us could materially

and adversely affect our financial condition or results of operations.

Any adverse publicity resulting from these allegations, whether

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

which in turn could adversely affect our results.

may depend on the continued service and availability of key personnel.

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

or to satisfy claims relating to environmental laws.

We could be party

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

and other remedies.

We could become subject to numerous claims alleging violations of federal

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

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

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

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

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

and disclosure and advertising practices.

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

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

A significant judgment for any claims against us could

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

Any adverse publicity resulting from these allegations,

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

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

Our success may

depend on the continued service and availability of key personnel.

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

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If our company culture were to deteriorate following a change

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

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

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

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

We are exposed to risks related to cybersecurity.

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

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

to anticipate, detect, avoid or mitigate such threats.

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

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

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

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

If our information security systems or data are compromised

in a material way, our ability to conduct our business may be impaired, we may incur financial losses and we may incur costs to remediate

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

a material failure in our information technology systems, our business operations and profits could be negatively affected and our systems

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

take to anticipate, detect, avoid or mitigate such threats.

Certain techniques used to obtain unauthorized access, introduce malicious

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

to anticipate these techniques or implement adequate preventative measures since techniques change frequently or are not recognized until

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

If our information security systems or data are

compromised in a material way, our ability to conduct our business may be impaired, we may incur financial losses and we may incur costs

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

If there is a

material failure in our information technology systems, our business operations and profits could be negatively affected and our systems

may be inadequate to support our future growth strategies.

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

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

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

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

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

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

to help preserve our operating margins.

impact on customer perceptions of our brand.

The occurrence or threat of extraordinary events, such as active shooter

or future terrorist attacks, military and governmental responses, and the protest of future wars, may result in negative changes to economic

conditions likely resulting in decreased consumer spending.

Additionally, decreases in consumer discretionary spending may impact the

frequency with which our customers choose to dine out at restaurants or the amount they spend on meals while dining out at restaurants,

thereby adversely affecting our sales and results of operations.

A decrease in consumer discretionary spending may also adversely affect

our ability to achieve the benefit of planned menu price increases to help preserve our operating margins.

Social media impact

on customer perceptions of our brand.

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

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

business has become an increasingly significant part of our business.

Our digital business

has become an increasingly significant part of our business.

revenue derived from digital orders, which includes delivery and customer pickup has increased substantially.

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

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

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

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

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If the third-party delivery

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

our competitors, our delivery business and our sales may be negatively impacted.

interest rates.

As of September 28, 2024, we had

one variable rate instrument outstanding that is impacted by changes in interest rates.

The variable rate debt instrument is equal to

the lender’s BSBY Screen Rate plus one and one-half percent (1.50%) per annum.

As a means of managing our interest rate risk on

the debt instrument, we entered into an interest rate swap agreement with our unrelated third party lender to convert this variable rate

debt obligation to fixed rate.

The Bloomberg Index Services Limited announced the permanent cessation of all tenors of BSBY, effective

immediately following the last publication of BSBY on November 15, 2024.

As of that date, our lender has determined that a commercially

reasonable and good faith alternative to BSBY is the 1 Month CME Term Secured Overnight Financing Rate (“SOFR”), plus 10 Basis

services that we utilize cease or curtail operations, increase their fees, or give greater priority or promotions on their platforms

to our competitors, our delivery business and our sales may be negatively impacted.

Changes in interest

As part of our ongoing operations,

we are exposed to interest rate fluctuations on our borrowings.

We use interest rate swap agreements to manage these risks.

These instruments

are not used for speculative purposes but are used to modify variable rate obligations into fixed rate obligations.

As of September 27, 2025,

we had one variable rate instrument outstanding that is impacted by changes in interest rates.

In September 2022, we refinanced the mortgage

loan encumbering the property where our combination package liquor store and restaurant located at 4 N.

Federal Highway, Hallandale Beach,

Florida, (Store #31) operates, which mortgage loan is held by an unaffiliated third-party lender (the “$8.90M Loan”).

interest rate of our variable rate debt instrument was equal to the lender’s BSBY Screen Rate plus one and one-half percent (1.50%)

Effective November 15, 2024, the publication of BSBY was terminated and as of such date, the variable rate of interest under

our debt instrument is equal to the lender’s 1 Month CME Term Secured Overnight Financing Rate (“SOFR”), plus 10 basis

points, as an equivalent alternative approved by the lender.

As a means of managing our

interest rate risk on this debt instrument, we entered into an interest rate swap agreement with an unrelated third-party lender to convert

this variable rate debt obligation to a fixed rate.

We entered into an interest rate swap agreement in September 2022 relating to the

$8.90M Loan (the “$8.90M Term Loan Swap”).

The $8.90M Term Loan Swap required us to pay interest for a fifteen (15) year

period at a fixed rate of 4.90% on an initial amortizing notional principal amount of $8,900,000, while receiving interest for the same

period at BSBY Screen Rate – 1 Month, plus 1.50%, on the same amortizing notional principal amount.

We had previously determined

that this interest rate swap agreement was an effective hedging agreement and we recorded changes in fair value to accumulated other

comprehensive income each quarter from the fourth quarter of our fiscal year 2023 through the first quarter of our fiscal year 2025.

On November 22, 2024, we

terminated the $8.90M Term Loan Swap and simultaneously entered into a new interest rate swap agreement for $8,015,601, the balance due

on the $8.90M Loan, which requires us to pay interest for twelve (12) years, ten (10) months, which is the balance of the original fifteen

(15) year period at a fixed rate of 4.90% on an initial amortizing notional principal amount of $8,015,601, while receiving interest

for the same period at the lender’s 1 Month CME Term Secured Overnight Financing Rate (“SOFR”), plus 10 basis points,

at the same amortizing notional principal amount.

During the second quarter of our fiscal year 2025, we recognized the $290,000 of non-cash

gains, net of tax, related to the above interest rate swap agreement as interest and other income.

We determined that the new interest

rate swap agreement is an economic hedge and beginning in the second quarter of our fiscal year 2025, we recognize the changes in fair

value on our interest rate swap in interest and other income on our consolidated statements of income.

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

What changed 10-K

Item 1A. Risk Factors