CAUTIONARY NOTE REGARDING LOOKING FORWARD STATEMENTS





Reported financial results may not be indicative of the financial results of
future periods. All non-historical information contained in the following
discussion constitutes forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. Words such as "anticipates, appears, expects, trends, intends, hopes,
plans, believes, seeks, estimates, may, will," and variations of these words or
similar expressions are intended to identify forward-looking statements. These
statements are not guarantees of future performance and involve a number of
risks and uncertainties, including but not limited to the effect of the novel
coronavirus pandemic and related "shelter-in-place" orders and other
governmental mandates ("COVID 19"), customer demand and competitive conditions.
Factors that could cause actual results to differ materially are included in,
but not limited to, those identified in the "Management's Discussion and
Analysis of Financial Condition and Results of Operations," in our periodic
reports, including our Annual Report on Form 10-K for the fiscal year ended
October 3, 2020. We undertake no obligation to publicly release the results of
any revisions to these forward-looking statements that may reflect events or
circumstances after the date of this report.



OVERVIEW



As of July 3, 2021, Flanigan's Enterprises, Inc., a Florida corporation,
together with its subsidiaries ("we", "our", "ours" and "us" as the context
requires): (i) operates 27 units, consisting of restaurants, package liquor
stores and combination restaurants/package liquor stores that we either own or
have operational control over and partial ownership in; and (ii) franchises an
additional five units, consisting of two restaurants (one of which we operate)
and three combination restaurants/package liquor stores. The table below
provides information concerning the type (i.e., restaurant, package liquor store
or combination restaurant/package liquor store) and ownership of the units
(i.e., 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 July 3, 2021 and as compared to June
27, 2020. With the exception of "The Whale's Rib", a restaurant we operate but
do not own, all of the restaurants operate under our service mark "Flanigan's
Seafood Bar and Grill" 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                     July 3, October 3, 2020 June 27, 2020
                                    2021
Company Owned:
Combination package and restaurant    3           3              3

(1)


Restaurant only                       7           7              7
Package store only                    7           7              7

Company Operated Restaurants Only:
Limited Partnerships                  8           8              8
Franchise                             1           1              1
Unrelated Third Party                 1           1              1

Total Company Owned/Operated Units   27          27             27
Franchised Units                      5           5              5       (2)


Notes:

(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. Store #19 remains closed through July 3, 2021.

(2) 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.


In March 2020, a novel strain of coronavirus was declared a global pandemic and
a National Public Health Emergency. The novel coronavirus pandemic and related
"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. Throughout the third quarter of our fiscal year
2021, in accordance with guidance from health officials, we have offered both
indoor and outdoor food and bar options at all of our restaurants, with, among
other precautions appropriate social distancing and mask requirements for all
customers and employees.



                                      19

  Index

Franchise Financial Arrangement: In exchange for our providing management and
related services to our franchisees and granting them the right to use our
service marks "Flanigan's Seafood Bar and Grill" and "Big Daddy's Liquors", our
franchisees (four (4) of which are franchised to members of the family of our
Chairman of the Board, officers and/or directors), are required to (i) pay to us
a royalty equal to 1% of gross package store sales and 3% of gross restaurant
sales; and (ii) make advertising expenditures equal to between 1.5% to 3% of all
gross sales based upon our actual advertising costs allocated between stores,
pro-rata, based upon gross sales.



Limited Partnership Financial Arrangement: We manage and control the operations
of all restaurants owned by limited partnerships, except the Fort Lauderdale,
Florida restaurant which is owned by a related franchisee. Accordingly, the
results of operations of all limited partnership owned restaurants, except the
Fort Lauderdale, Florida restaurant are consolidated into our operations for
accounting purposes. The results of operations of the Fort Lauderdale, Florida
restaurant are accounted for by us utilizing the equity method of accounting. In
general, until the investors' cash investment in a limited partnership
(including any cash invested by us and our affiliates) is returned in full, the
limited partnership distributes to the investors annually out of available cash
from the operation of the restaurant 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, with the
balance distributed to the investors. Once the investors in the limited
partnership have received, in full, amounts equal to their cash invested, an
annual management fee is payable to us equal to one-half (½) of cash available
to the limited partnership, with the other one half (½) of available cash
distributed to the investors (including us and our affiliates). As of July 3,
2021, all limited partnerships 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".



RESULTS OF OPERATIONS

-----------------------Thirteen Weeks Ended-----------------------


                                                    July 3, 2021                                June 27, 2020
                                            Amount                                      Amount
                                        (In thousands)            Percent           (In thousands)            Percent
Restaurant food sales                   $        23,484                 63.16       $        14,514                 62.44
Restaurant bar sales                              5,617                 15.10                 1,630                  7.01
Package store sales                               8,082                 21.74                 7,099                 30.55

Total Sales                             $        37,183                100.00       $        23,243                100.00

Franchise related revenues                          444                                         278
Rental income                                       250                                         151
Other operating income (Loss)                        58                                          (9 )

Total Revenue                           $        37,935                             $        23,663




                                      20

  Index

-----------------------Thirty-Nine Weeks Ended-----------------------


                                                       July 3, 2021                                 June 27, 2020
                                               Amount                                       Amount
                                           (In thousands)             Percent           (In thousands)            Percent

Restaurant food sales                     $          62,501                 61.56       $        51,469                 61.91
Restaurant bar sales                                 15,110                 14.88                12,836                 15.44
Package store sales                                  23,923                 23.56                18,833                 22.65

Total Sales                               $         101,534                100.00       $        83,138                100.00

Franchise related revenues                            1,252                                         945
Rental income                                           663                                         554
Other operating income                                  223                                          95

Total Revenue                             $         103,672                             $        84,732

Comparison of Thirteen Weeks Ended July 3, 2021 and June 27, 2020.


Revenues.Total revenue for the thirteen weeks ended July 3, 2021 increased
$14,272,000 or 60.31% to $37,935,000 from $23,663,000 for the thirteen weeks
ended June 27, 2020 due primarily to increased package liquor store and
restaurant sales, increased menu prices and the comparatively more adverse
effects of COVID-19 on our operations during the thirteen weeks ended June 27,
2020 as compared with the thirteen weeks ended July 3, 2021. Effective December
6, 2020 and then effective April 11, 2021 we increased menu prices for our food
offerings to target an increase to our food revenues of approximately 2.45% and
4.60% annually, respectively, to offset higher food costs and higher overall
expenses. Effective November 29, 2020 we increased menu prices for our bar
offerings to target an increase to our bar revenues of approximately 1.83%
annually. Prior to these increases, we previously raised menu prices in the
third quarter of our fiscal year 2019. We expect that Store #19 (2505 N.
University Drive, Hollywood, Florida) will remain closed during our fiscal year
2021 due to damages caused by a fire on October 2, 2018 and accordingly do not
expect to generate any revenue from it.



Restaurant Food Sales. Restaurant revenue generated from the sale of food,
including non-alcoholic beverages, at restaurants totaled $23,484,000 for the
thirteen weeks ended July 3, 2021 as compared to $14,514,000 for the thirteen
weeks ended June 27, 2020. The increase in restaurant food sales for the
thirteen weeks ended July 3, 2021 as compared to restaurant food sales during
the thirteen weeks ended June 27, 2020 is attributable to menu price increases
and the comparatively more adverse effects of COVID-19 on our operations during
the thirteen weeks ended June 27, 2020 as compared with the thirteen weeks ended
July 3, 2021. Comparable weekly restaurant food sales (for restaurants open for
all of the thirteen weeks ended July 3, 2021 and June 27, 2020 respectively,
which consists of nine restaurants owned by us, (excluding Store #19 which was
closed for the thirteen weeks ended July 3, 2021 and June 27, 2020 due to a fire
on October 2, 2018) and eight restaurants owned by affiliated limited
partnerships) was $1,789,000 and $1,112,000 for the thirteen weeks ended July 3,
2021 and June 27, 2020, respectively, an increase of 60.88%. Comparable weekly
restaurant food sales for Company owned restaurants only was $893,000 and
$547,000 for the thirteen weeks ended July 3, 2021 and June 27, 2020
respectively, an increase of 63.25%. Comparable weekly restaurant food sales for
affiliated limited partnership owned restaurants only was $896,000 and $565,000
for the thirteen weeks ended July 3, 2021 and June 27, 2020 respectively, an
increase of 58.58%.



Restaurant Bar Sales. Restaurant revenue generated from the sale of alcoholic
beverages at restaurants totaled $5,617,000 for the thirteen weeks ended July 3,
2021 as compared to $1,630,000 for the thirteen weeks ended June 27, 2020. The
increase in restaurant bar sales during the thirteen weeks ended July 3, 2021 is
primarily due to the comparatively more adverse effects of COVID-19 on our
operations during the thirteen weeks ended June 27, 2020 as compared with the
thirteen weeks ended July 3, 2021, offset by the 2021 Price Increases and 2020
Price Increases. Comparable weekly restaurant bar sales (for restaurants open
for all of the thirteen weeks ended July 3, 2021 and June 27, 2020 respectively,
which consists of nine restaurants owned by us, (excluding Store #19 which was
closed for the thirteen weeks ended July 3, 2021 and June 27, 2020 due to a fire
on October 2, 2018), and eight restaurants owned by affiliated limited
partnerships) was $432,000 for the thirteen weeks ended July 3, 2021 and
$125,000 for the thirteen weeks ended June 27, 2020, an increase of 245.60%.
Comparable weekly restaurant bar sales for Company owned restaurants only was
$188,000 and $50,000 for the thirteen weeks ended July 3, 2021 and June 27, 2020
respectively, an increase of 276.00%. Comparable weekly restaurant bar sales for
affiliated limited partnership owned restaurants only was $244,000 and $75,000
for the thirteen weeks ended July 3, 2021 and June 27, 2020 respectively, an
increase of 225.33%.



                                      21

  Index

Package Store Sales. Revenue generated from sales of liquor and related items at
package liquor stores totaled $8,082,000 for the thirteen weeks ended July 3,
2021 as compared to $7,099,000 for the thirteen weeks ended June 27, 2020, an
increase of $983,000. This increase was primarily due to increased package
liquor store traffic due to what appears to be continued increased demand for
package liquor store products resulting from COVID-19. The weekly average of
same store package liquor store sales, which includes nine (9) Company-owned
package liquor stores, (excluding Store #19, which was closed for the thirteen
weeks ended July 3, 2021 and June 27, 2020 due to a fire on October 2, 2018, but
includes Store #45, which opened for business on October 10, 2019), was $622,000
and $546,000 for the thirteen weeks ended July 3, 2021 and June 27, 2020
respectively, an increase of 13.92%.



Operating Costs and Expenses. Operating costs and expenses, (consisting of cost
of merchandise sold, payroll and related costs, occupancy costs and selling,
general and administrative expenses), for the thirteen weeks ended July 3, 2021
increased $10,931,000 or 44.81% to $35,326,000 from $24,395,000 for the thirteen
weeks ended June 27, 2020. The increase was primarily due to payroll and an
expected general increase in food costs, offset by actions taken by management
to reduce and/or control costs. We anticipate that our operating costs and
expenses will continue to increase through our fiscal year 2021 for the same
reasons. Operating costs and expenses decreased as a percentage of total revenue
to approximately 93.12% in the third quarter of our fiscal year 2021 from
103.09% in the third quarter of our fiscal year 2020.

Gross Profit. Gross profit is calculated by subtracting the cost of merchandise sold from sales.





Restaurant Food Sales and Bar Sales. Gross profit for food and bar sales for the
thirteen weeks ended July 3, 2021 increased to $19,137,000 from $10,756,000 for
the thirteen weeks ended June 27, 2020. Our gross profit margin for restaurant
food and bar sales (calculated as gross profit reflected as a percentage of
restaurant food and bar sales), was 65.76% for the thirteen weeks ended July 3,
2021 and 66.63% for the thirteen weeks ended June 27, 2020. Gross profit margin
for restaurant food and bar sales decreased during the third quarter of our
fiscal year 2021 when compared to the third quarter of our fiscal year 2020 due
to higher food costs, offset among other things by the menu price increases.



Package Store Sales. Gross profit for package store sales for the thirteen weeks
ended July 3, 2021 increased to $2,171,000 from $1,856,000 for the thirteen
weeks ended June 27, 2020, due primarily to increased package liquor store
traffic which we believe is due to what appears to be continued increased demand
caused by COVID-19. Our gross profit margin, (calculated as gross profit
reflected as a percentage of package liquor store sales), for package store
sales was 26.86% for the thirteen weeks ended July 3, 2021 and 26.14% for the
thirteen weeks ended June 27, 2020.



Payroll and Related Costs. Payroll and related costs for the thirteen weeks
ended July 3, 2021 increased $4,635,000 or 58.57% to $12,548,000 from $7,913,000
for the thirteen weeks ended June 27, 2020. Payroll and related costs for the
thirteen weeks ended July 3, 2021 were higher due primarily to increased
performance bonuses, increased hours and higher costs for employees such as
cooks. Payroll and related costs as a percentage of total revenue was 33.08% in
the thirteen weeks ended July 3, 2021 and 33.44% of total revenue in the
thirteen weeks ended June 27, 2020.



                                      22

  Index

Occupancy Costs. Occupancy costs (consisting of percentage rent, common area
maintenance, repairs, real property taxes, amortization of leasehold purchases
and rent expense associated with operating lease liabilities under ASC 842) for
the thirteen weeks ended July 3, 2021 increased $6,000 or 0.36% to $1,651,000
from $1,645,000 for the thirteen weeks ended June 27, 2020. The limited increase
in occupancy costs was primarily due to the termination of rent for our
combination retail package liquor store and restaurant located at 5450 N. State
Road 7, North Lauderdale, Florida (Store #40), the real property and
improvements of which we purchased on December 31, 2020 and the elimination of
occupancy costs due to the elimination of rent for our restaurant location which
we are developing located at 14301 West Sunrise Boulevard, Sunrise, Florida
(Store #85), the real property and improvements of which we purchased on March
2, 2021. We anticipate that our occupancy costs will decrease throughout the
balance of our fiscal year 2021 for the same reason.



Selling, General and Administrative Expenses.Selling, general and administrative
expenses (consisting of general corporate expenses, including but not limited to
advertising, insurance, professional costs, clerical and administrative
overhead) for the thirteen weeks ended July 3, 2021 increased $1,046,000 or
24.87% to $5,252,000 from $4,206,000 for the thirteen weeks ended June 27, 2020.
Selling, general and administrative expenses decreased as a percentage of total
revenue in the thirteen weeks ended July 3, 2021 to 13.84% as compared to 17.77%
in the thirteen weeks ended June 27, 2020. We anticipate that our selling,
general and administrative expenses as a percentage of total revenue will
decrease throughout the balance of our fiscal year 2021 due primarily to
increases in total revenue when compared to the balance of our fiscal year 2020.



Depreciation and Amortization. Depreciation and amortization expense for the
thirteen weeks ended July 3, 2021 decreased $38,000 or 4.70% to $770,000 from
$808,000 from the thirteen weeks ended June 27, 2020. As a percentage of total
revenue, depreciation and amortization expense was 2.03% of revenue in the
thirteen weeks ended July 3, 2021 and 3.41% of revenue in the thirteen weeks
ended June 27, 2020.




Interest Expense, Net. Interest expense, net, for the thirteen weeks ended July
3, 2021 increased $14,000 to $210,000 from $196,000 for the thirteen weeks ended
June 27, 2020. Interest expense, net, increased for the thirteen weeks ended
July 3, 2021 due to interest on our borrowing of $2,200,000 during the second
quarter of our fiscal year 2021 from an unrelated third party lender used to
finance our purchase of the real property and improvements located at 14301 West
Sunrise Boulevard, Sunrise, Florida (Store #85) (the "$2.2 Million Borrowing")
and the borrowing by six of our limited partnerships of an additional
approximately $3.35 million of 2nd PPP Loans during the second quarter of our
fiscal year 2021. Interest expense, net, will increase throughout the balance of
our fiscal year 2021 due to (i) the $2.2 Million Borrowing; (ii) our borrowing
of $4,300,000 during the third quarter of our fiscal year 2021 from an unrelated
third party lender to re-finance our mortgage loan of our property located at
13105 - 13205 Biscayne Boulevard, North Miami, Florida (Store #20); and (iii)
the borrowing by certain of our limited partnerships of an additional $3.35
million of 2nd PPP Loans during the second quarter of our fiscal year 2021,

if
not forgiven.



Income Taxes. Income tax for the thirteen weeks ended July 3, 2021 was an
expense of $475,000, as compared to a benefit of $53,000 for the thirteen weeks
ended June 27, 2020. Income tax for the third quarter of our fiscal year 2021
was not affected by the forgiveness of debt of certain of the PPP Loans,
pursuant to the terms of the PPP Loans.



Net Income (Loss). Net income for the thirteen weeks ended July 3, 2021
increased $9,284,000 or 1,075.78% to $8,421,000 from a loss of $863,000 for the
thirteen weeks ended June 27, 2020 due primarily to the forgiveness of debt of
certain of the PPP Loans and increased revenue at our retail package liquor
stores and restaurants, offset by higher food costs and overall expenses. As a
percentage of revenue, net income for the thirteen weeks ended July 3, 2021 is
22.20%, as compared to (3.65%) in the thirteen weeks ended June 27, 2020.



                                      23

  Index

Net Income (Loss) Attributable to Stockholders.Net income attributable to
stockholders for the thirteen weeks ended July 3, 2021 increased $7,654,000 or
1,682.20% to $7,199,000 from a loss of $455,000 for the thirteen weeks ended
June 27, 2020 due primarily to the forgiveness of debt of certain of the PPP
Loans and increased revenue at our retail package liquor stores and restaurants,
offset by higher food costs and overall expenses. As a percentage of revenue,
net income attributable to stockholders for the third quarter of our fiscal year
2021 is 18.98%, as compared to (1.92%) in the third quarter of our fiscal year
2020.

Comparison of Thirty-Nine Weeks Ended July 3, 2021 and June 27, 2020.





Revenues.Total revenue for the thirty-nine weeks ended July 3, 2021 increased
$18,940,000 or 22.35% to $103,672,000 from $84,732,000 for the thirty-nine ended
June 27, 2020 due primarily to increased package liquor store and restaurant
sales, increased menu prices and the comparatively more adverse effects of
COVID-19 on our operations during the thirty-nine weeks ended June 27, 2020 as
compared with the thirty-nine weeks ended July 3, 2021. We expect that Store #19
(2505 N. University Drive, Hollywood, Florida) will remain closed during our
fiscal year 2021 due to damages caused by a fire on October 2, 2018 and
accordingly do not expect to generate any revenue from it.



Restaurant Food Sales. Restaurant revenue generated from the sale of food,
including non-alcoholic beverages, at restaurants totaled $62,501,000 for the
thirty-nine weeks ended July 3, 2021 as compared to $51,469,000 for the
thirty-nine weeks ended June 27, 2020. The increase in restaurant food sales for
the thirty-nine weeks ended July 3, 2021 as compared to restaurant food sales
during the thirty-nine ended June 27, 2020 is attributable to menu price
increases and the comparatively more adverse effects of COVID-19 on our
operations during the thirty-nine weeks ended June 27, 2020 as compared with the
thirty-nine weeks ended July 3, 2021. Comparable weekly restaurant food sales
(for restaurants open for the thirty-nine weeks ended July 3, 2021 and June 27,
2020 respectively, which consists of nine restaurants owned by us, (excluding
Store #19 which was closed for the thirty-nine weeks ended July 3, 2021 and June
27, 2020 respectively, due to a fire on October 2, 2018) and eight restaurants
owned by affiliated limited partnerships) was $1,590,000 and $1,310,000 for the
thirty-nine weeks ended July 3, 2021 and June 27, 2020 respectively, an increase
of 21.37%. Comparable weekly restaurant food sales for Company owned restaurants
only was $787,000 and $660,000 for the thirty-nine weeks ended July 3, 2021 and
June 27, 2020 respectively, an increase of 19.24%. Comparable weekly restaurant
food sales for affiliated limited partnership owned restaurants only was
$803,000 and $650,000 for the thirty-nine weeks ended July 3, 2021 and June 27,
2020 respectively, an increase of 23.54%.



Restaurant Bar Sales. Restaurant revenue generated from the sale of alcoholic
beverages at restaurants totaled $15,110,00 for the thirty-nine weeks ended July
3, 2021 as compared to $12,836,000 for the thirty-nine weeks ended June 27,
2020. The increase in restaurant bar sales during the thirty-nine weeks ended
July 3, 2021 is primarily due to menu price increases, offset by the
comparatively more adverse effects of COVID-19 on our operations during the
thirty-nine weeks ended June 27, 2020 as compared with the thirty-nine weeks
ended July 3, 2021. Comparable weekly restaurant bar sales (for restaurants open
for the thirty-nine weeks ended July 3, 2021 and June 27, 2020, which consists
of nine restaurants owned by us, (excluding Store #19 which was closed for the
thirty-nine weeks ended July 3, 2021 and June 27, 2020 due to a fire on October
2, 2018), and eight restaurants owned by affiliated limited partnerships) was
$387,000 for the thirty-nine weeks ended July 3, 2021 and $329,000 for the
thirty-nine weeks ended June 27, 2020 respectively, an increase of 17.63%.
Comparable weekly restaurant bar sales for Company owned restaurants only was
$165,000 and $149,000 for the thirty-nine weeks ended July 3, 2021 and June 27,
2020, respectively, an increase of 10.74%. Comparable weekly restaurant bar
sales for affiliated limited partnership owned restaurants only was $222,000 and
$180,000 for the thirty-nine weeks ended July 3, 2021 and June 27, 2020,
respectively, an increase of 23.33%.



                                      24

  Index

Package Store Sales. Revenue generated from sales of liquor and related items at
package liquor stores totaled $23,923,000 for the thirty-nine weeks ended July
3, 2021 as compared to $18,833,000 for the thirty-nine weeks ended June 27,
2020, an increase of $5,090,000. This increase was primarily due to increased
package liquor store traffic due to what appears to be continued increased
demand for package store products caused by COVID-19 . The weekly average of
same store package liquor store sales, which includes nine (9) Company-owned
package liquor stores, (excluding Store #19, which was closed for the
thirty-nine weeks ended July 3, 2021 and June 27, 2020 respectively due to a
fire on October 2, 2018, but includes Store #45, which opened for business on
October 10, 2019), was $613,000 and $483,000 for the thirty-nine weeks ended
July 3, 2021 and June 27, 2020 respectively, an increase of 26.92%.



Operating Costs and Expenses. Operating costs and expenses, (consisting of cost
of merchandise sold, payroll and related costs, occupancy costs and selling,
general and administrative expenses), for the thirty-nine weeks ended July 3,
2021 increased $14,284,000 or 17.27% to $97,000,000 from $82,716,000 for the
thirty-nine weeks ended June 27, 2020. The increase was primarily due to payroll
and an expected general increase in food costs, offset by actions taken by
management to reduce and/or control costs. We anticipate that our operating
costs and expenses will continue to increase through our fiscal year 2021 for
the same reasons. Operating costs and expenses decreased as a percentage of
total revenue to approximately 93.56% in the thirty-nine weeks ended July 3,
2021 from 97.62% in the thirty-nine weeks ended June 27, 2020.

Gross Profit. Gross profit is calculated by subtracting the cost of merchandise sold from sales.





Restaurant Food Sales and Bar Sales. Gross profit for food and bar sales for the
thirty-nine weeks ended July 3, 2021 increased to $51,663,000 from $42,593,000
for the thirty-nine weeks ended June 27, 2020. Our gross profit margin for
restaurant food and bar sales (calculated as gross profit reflected as a
percentage of restaurant food and bar sales), was 66.57% for the thirty-nine
weeks ended July 3, 2021 and 66.24% for the thirty-nine weeks ended June 27,
2020. Gross profit margin for restaurant food and bar sales increased during the
thirty-nine weeks ended July 3, 2021 when compared to the thirty-nine weeks
ended June 27, 2020 due to, among other things, menu price increases and the
comparatively more adverse effects of COVID-19 on our operations during the
thirty-nine weeks ended June 27, 2020 as compared with the thirty-nine weeks
ended July 3, 2021, offset by higher food costs.



Package Store Sales. Gross profit for package liquor store sales for the
thirty-nine weeks ended July 3, 2021 increased to $6,493,000 from $5,125,000 for
the thirty-nine weeks ended June 27, 2020, due primarily to increased package
liquor store traffic which we believe is due to what appears to be continues
increased demand for package store products caused by COVID-19. Our gross profit
margin, (calculated as gross profit reflected as a percentage of package liquor
store sales), for package store sales was 27.14% for the thirty-nine weeks ended
July 3, 2021 and 27.21% for the thirty-nine weeks ended June 27, 2020.



Payroll and Related Costs. Payroll and related costs for the thirty-nine weeks
ended July 3, 2021 increased $5,893,000 or 22.17% to $32,475,000 from
$26,582,000 for the thirty-nine weeks ended June 27, 2020. Payroll and related
costs for the thirty-nine weeks ended July 3, 2021 were higher due primarily to
increased performance bonuses, increased hours and higher costs for employees
such as cooks. Payroll and related costs as a percentage of total revenue was
31.32% in the thirty-nine weeks ended July 3, 2021 and 31.37% of total revenue
in the thirty-nine weeks ended June 27, 2020.



Occupancy Costs. Occupancy costs (consisting of percentage rent, common area
maintenance, repairs, real property taxes, amortization of leasehold purchases
and rent expense associated with operating lease liabilities under ASC 842) for
the thirty-nine weeks ended July 3, 2021 decreased $296,000 or 5.53% to
$5,059,000 from $5,355,000 for the thirty-nine weeks ended June 27, 2020. The
decrease in occupancy costs was primarily due to the termination of rent for our
combination retail package liquor store and restaurant located at 5450 N. State
Road 7, North Lauderdale, Florida (Store #40), the real property and
improvements of which we purchased on December 31, 2020 and the elimination of
occupancy costs due to the elimination of rent for our restaurant location which
we are developing located at 14301 West Sunrise Boulevard, Sunrise, Florida
(Store #85), the real property and improvements of which we purchased on March
2, 2021. We anticipate that our occupancy costs will decrease throughout the
balance of our fiscal year 2021.



                                      25

  Index

Selling, General and Administrative Expenses.Selling, general and administrative
expenses (consisting of general corporate expenses, including but not limited to
advertising, insurance, professional costs, clerical and administrative
overhead) for the thirty-nine weeks ended July 3, 2021 increased $729,000 or
4.75% to $16,088,000 from $15,359,000 for the thirty-nine weeks ended June 27,
2020. Selling, general and administrative expenses decreased as a percentage of
total revenue in the thirty-nine weeks ended July 3, 2021 to 15.52% as compared
to 18.13% in the thirty-nine weeks ended June 27, 2020. We anticipate that our
selling, general and administrative expenses will decrease as a percentage of
total revenue throughout the balance of our fiscal year 2021 due primarily to
increases in total revenue when compared to the balance of our fiscal year 2020.



Depreciation and Amortization. Depreciation and amortization expense for the
thirty-nine weeks ended July 3, 2021 decreased $135,000 or 5.53% to $2,306,000
from $2,441,000 from the thirty-nine weeks ended June 27, 2020. As a percentage
of total revenue, depreciation and amortization expense was 2.22% of revenue in
the thirty-nine weeks ended July 3, 2021 and 2.88% of revenue in the thirty-nine
weeks ended June 27, 2020.



Interest Expense, Net. Interest expense, net, for the thirty-nine weeks ended
July 3, 2021 increased $139,000 to $737,000 from $598,000 for the thirty-nine
weeks ended June 27, 2020. Interest expense, net, increased for the thirty-nine
weeks ended July 3, 2021 due to (i) the $2.2 Million Borrowing; and (ii) the
borrowing by six of our limited partnerships of an additional approximately
$3.35 million of 2nd PPP Loans, both of which borrowings occurred during the
second quarter of our fiscal year 2021. Interest expense, net, will increase
throughout the balance of our fiscal year 2021 due to (i) the $2.2 Million
Borrowing; (ii) our borrowing of $4,300,000 during the third quarter of our
fiscal year 2021 from an unrelated third party lender to re-finance our mortgage
loan of our property located at 13105 - 13205 Biscayne Boulevard, North Miami,
Florida (Store #20); and (iii) the borrowing by certain of our limited
partnerships of an additional $3.35 million of 2ndPPP Loans during the second
quarter of our fiscal year 2021, if not forgiven.



Income Taxes. Income tax for the thirty-nine weeks ended July 3, 2021 was an
expense of $1,004,000, as compared to a benefit of $23,000 for the thirty-nine
weeks ended June 27, 2020. Income tax for the thirty-nine weeks ended July 3,
2021 was not affected by the forgiveness of debt of certain of the PPP Loans,
pursuant to the terms of the PPP Loans.



Net Income. Net income for the thirty-nine weeks ended July 3, 2021 increased
$13,667,000 or 924.70% to $15,145,000 from $1,478,000 for the thirty-nine weeks
ended June 27, 2020 due primarily to the forgiveness of debt of certain of the
PPP Loans and increased revenue at our retail package liquor stores and
restaurants, offset by higher food costs and overall expenses. As a percentage
of revenue, net income for the thirty-nine weeks ended July 3, 2021 is 14.61%,
as compared to 1.74% in the thirty-nine weeks ended June 27, 2020.



Net Income Attributable to Stockholders.Net income attributable to stockholders
for the thirty-nine weeks ended July 3, 2021 increased $9,743,000 or 1,418.20%
to $10,430,000 from $687,000 for the thirty-nine weeks ended June 27, 2020 due
primarily to the forgiveness of debt of certain of the PPP Loans and increased
revenue at our retail package liquor stores and restaurants, offset by higher
food costs and overall expenses. As a percentage of revenue, net income
attributable to stockholders for the thirty-nine weeks ended July 3, 2021 is
10.06%, as compared to 0.81% for the thirty-nine weeks ended June 27, 2020.




                                      26

  Index

New Limited Partnership Restaurants





As new restaurants open, our income from operations will be adversely affected
due to our obligation to advance pre-opening costs, including but not limited to
pre-opening rent for the new locations. During the thirteen weeks ended July 3,
2021, we had one new restaurant location in Sunrise, Florida in the development
stage. During the fourth quarter of our fiscal year 2019, we entered leases for
two spaces adjacent to each other, to house a new "Flanigan's Seafood Bar and
Grill" as well as a "Big Daddy's Wine and Liquors" in a shopping center in
Miramar, Florida, which shopping center is currently under construction.

Menu Price Increases and Trends


During the third quarter of our fiscal year 2021, we increased menu prices for
our food offerings (effective April 11, 2021) to target an increase to our food
revenues of approximately 4.60% annually to offset higher food costs and higher
overall expenses.

During the first quarter of our fiscal year 2021, we increased menu prices for
our bar offerings (effective November 29, 2020) to target an increase to our bar
revenues of approximately 1.83% annually and we increased menu prices for our
food offerings (effective December 6, 2020) to target an increase to our food
revenues of approximately 2.45% annually to offset higher food costs and higher
overall expenses. Prior to these increases, we previously raised menu prices in
the third quarter of our fiscal year 2019.

COVID-19 has and will continue to materially and adversely affect our restaurant
business for what may be a prolonged period of time. This damage and disruption
has resulted from events and factors that were impossible for us to predict and
are beyond our control. As a result, COVID-19 has materially adversely affected
our results of operations for the thirteen weeks ended July 3, 2021 and will, in
all likelihood, impact our results of operations, liquidity and/or financial
condition throughout the remainder of our fiscal year 2021. The extent to which
our restaurant business may be adversely impacted and its effect on our
operations, liquidity and/or financial condition cannot be accurately predicted.

We are not actively searching for locations for the operation of new package
liquor stores, but during the fourth quarter of our fiscal year 2019, we entered
a lease to house a new "Big Daddy's Wine & Liquors" package liquor store in
space adjacent to where we are planning a new "Flanigan's Seafood Bar and
Grill", restaurant in a shopping center in Miramar, Florida, which shopping
center is currently under construction.

Liquidity and Capital Resources





We fund our operations through cash from operations and borrowings from third
parties. As of July 3, 2021, we had cash of approximately $31,953,000, an
increase of $2,031,000 from our cash balance of $29,922,000 as of October 3,
2020. During the second quarter of our fiscal year 2021, we closed on the
purchase of the real property and improvements located at 14301 West Sunrise
Boulevard, Sunrise, Florida where we are developing a "Flanigan's Seafood Bar
and Grill" restaurant (Store #85) for $4,800,000. We financed this acquisition
with a loan from an unrelated third-party lender in the principal amount of $2.2
million and paid cash for the balance. During the first quarter of our fiscal
year 2021, we closed on the purchase of the real property and improvements
located at 5450 N. State Road 7, North Lauderdale, Florida where we operate a
combination "Flanigan's Seafood Bar and Grill" restaurant and "Big Daddy's
Liquors" package liquor store (Store #40) and paid $1,200,000 cash at closing.
During the third quarter of our fiscal year 2020, we, certain of the entities
owning the limited partnership stores (the "LP's"), franchised stores (the
"Franchisees") as well as the store we manage but do not own (the "Managed
Store") (collectively, the "Borrowers"), applied for and received loans from an
unrelated third party lender (the "Lender") pursuant to the Paycheck Protection
Program (the "PPP") under the Coronavirus Aid, Relief, and Economic Security Act
(the "CARES Act") enacted March 27, 2020, in the aggregate principal amount of
approximately $13.1 million (the "PPP Loans"), of which approximately: (i) $5.9
million was loaned to us; (ii) $4.1 million was loaned to 8 of the LP's; (iii)
$2.6 million was loaned to 5 of the Franchisees; and (iv) $0.5 million was
loaned to the Managed Store. During the second quarter of our fiscal year 2021,
we applied for forgiveness for all PPP Loans, including Franchisees and the
Managed Store. As of July 3, 2021, the entire amount of principal and accrued
interest was forgiven under the PPP Loans. During the first quarter of our
fiscal year 2020, our wholly owned subsidiary, Flanigan's Calusa Center, LLC,
re-financed its mortgage loan with an unrelated third party lender, increasing
the principal amount borrowed from $2.72 million to $7.21 million.



                                      27

  Index


During the second quarter of our fiscal year 2021, 6 of the entities owning
limited partnership stores (the "LP's") and the store we manage but do not own
(the "Managed Store") (collectively, the "Borrowers"), applied for and received
net amounts of approximately $3.98 million from the 2nd PPP Loans, of which
approximately: (i) $3.35 million was loaned to 6 of the LP's ; and (ii) $0.63
million was loaned to the Managed Store.

Notwithstanding the negative effects of COVID 19 on our operations, we believe
that our current cash availability from our cash on hand, positive cash flow
from operations and borrowed funds will be sufficient to fund our operations and
planned capital expenditures for at least the next twelve months.

Cash Flows

The following table is a summary of our cash flows for the thirty-nine weeks ended July 3, 2021 and June 27, 2020.

---------Thirty-Nine Weeks Ended--------


                                                                July 3, 2021                June 27, 2020
                                                                             (in Thousands)

Net cash provided by operating activities                    $            11,523         $             7,437
Net cash used in investing activities                                     (8,374 )                    (2,448 )
Net cash provided by (used in) financing activities                       (1,118 )                    11,821

Net Increase in Cash and Cash Equivalents                                  2,031                      16,810

Cash and Cash Equivalents, Beginning                                      29,922                      13,672

Cash and Cash Equivalents, Ending                            $            31,953         $            30,482





During the thirty-nine weeks ended July 3, 2021, we did not declare or pay a
cash dividend on our capital stock. During the thirty-nine weeks ended June 27,
2020, due to the negative effects of COVID 19 on our operations, our Board of
Directors cancelled a previously declared cash dividend of $.30 per share to
shareholders of record on March 20, 2020 and payable on April 3, 2020. Any
future determination to pay cash dividends will be at our Board's discretion and
will depend upon our financial condition, operating results, capital
requirements and such other factors as our Board deems relevant.



                                      28

  Index

Capital Expenditures



In addition to using cash for our operating expenses, we use cash to fund the
development and construction of new restaurants and to fund capitalized property
improvements for our existing restaurants. During the thirty-nine weeks ended
July 3, 2021, we acquired property, plant and equipment and construction in
progress of $9,683,000, (of which $58,000 was for the purchase of a motor
vehicle; $2,200,000 was for the purchase of real property; $14,000 was deposits
recorded in other assets and $18,000 was purchase deposits transferred to
construction in process as of October 3, 2020), which amount included $35,000
for the renovation to two (2) existing limited partnership restaurants and
$70,000 for renovations to two (2) Company owned restaurants. During the
thirty-nine weeks ended June 27, 2020, we acquired property, plant and equipment
and construction in progress of $2,171,000, (of which $96,000 was deposits
recorded in other assets and $2,000 was purchase deposits transferred to
construction in process as of September 28, 2019), which amount included
$263,000 for the renovation to two (2) existing limited partnership restaurants
and $429,000 for renovations to five (5) Company owned restaurants.



All of our owned units require periodic refurbishing in order to remain
competitive. We anticipate the cost of this refurbishment in our fiscal year
2021 to be approximately $950,000, excluding construction/renovations to Store
#19 (our combination package liquor store and restaurant which is being rebuilt
due to damages caused by a fire) and Store #85 (our Sunrise, Florida restaurant
location in development), which funds will be provided from operations.



Long-Term Debt

As of July 3, 2021, we had long-term debt of $20,211,000, as compared to $26,323,000 as of October 3, 2020. Our long term debt decreased due to the forgiveness of our PPP Loan and the PPP Loans of our limited partnerships. As of July 3, 2021, we are in compliance with the covenants of all loans with our lenders.


As of July 3, 2021, the aggregate principal balance owed from the financing of
our property and general liability insurance policies, including the financing
of our directors and officers liability insurance policy, but excluding coverage
for our franchises, (of approximately $226,000), which are not included in our
consolidated financial statements is $798,000.



Construction Contracts

a. 2505 N. University Drive, Hollywood, Florida (Store #19)





During the third quarter of our fiscal year 2019, we entered into an agreement
with an unaffiliated third party architect for design and development services
totaling $77,000 for the re-build of our restaurant located at 2505 N.
University Drive, Hollywood, Florida (Store #19) which has been closed since
October 2018 due to damages caused by a fire, of which $62,000 has been paid.
Additionally, during the third quarter of our fiscal year 2019, we entered into
an agreement with a third party unaffiliated general contractor for site work at
this location totaling $1,618,000, (i) to connect the real property where this
restaurant operated (Store #19) to city sewer and (ii) to construct a new
building on the adjacent parcel of real property for the operation of a package
liquor store. During our fiscal year 2020 and the first, second and third
quarters of our fiscal year 2021, we agreed to change orders to the agreement
for additional construction services increasing the total contract price by
$490,000 to $2,107,000, of which $767,000 of the total amount obligated has been
paid through July 3, 2021 and an additional $194,000 has been paid subsequent to
the end of the third quarter of our fiscal year 2021.



                                      29

  Index

b. 14301 W. Sunrise Boulevard, Sunrise, Florida (Store #85)





During the third quarter of our fiscal year 2019, we also entered into an
agreement with an unaffiliated third party design group for design and
development services of our new location at 14301 W. Sunrise Boulevard, Sunrise,
Florida 33323 (Store #85), for a total contract price of $122,000. During our
fiscal year 2020, we agreed upon amendments to the $122,000 contract for
additional design and development services which had the effect of increasing
the total contract price by $18,000 to $140,000, of which $131,000 has been paid
through July 3, 2021. Additionally, during the fourth quarter of our fiscal year
2020, we entered into an agreement with a third party unaffiliated general
contractor for interior renovations at this location totaling $1,236,000 and
during the third quarter of our fiscal year 2021 we agreed to change orders to
the agreement for additional interior renovations increasing the total contract
price by $131,000 to $1,367,000, of which $820,000 has been paid through July 3,
2021 and an additional $101,000 has been paid subsequent to the end of the third
quarter of our fiscal year 2021.

c. Miramar, Florida ("Flanigan's Seafood Bar and Grill")


During the fourth quarter of our fiscal year 2019, we entered into a Lease
Agreement with a non-affiliated third party for the lease of a restaurant
location in a shopping center at 11225 Miramar Parkway, #250, Miramar, Florida
33024 (Store #25). The shopping center is currently in the developmental stage
and the Lease Agreement is still contingent upon our receipt of delivery of the
leased premises by August 28, 2021. During the second quarter of our fiscal year
2021, we entered into an Architectural Professional Services Agreement with a
third-party unaffiliated architect for design and development services for this
new location (Store #25) for a total contract price of $73,850, which total
amount has been paid in full through July 3, 2021.

d. Miramar, Florida ("Big Daddy's Wine and Liquors")


During the fourth quarter of our fiscal year 2019, we entered into a Lease
Agreement with a non-affiliated third party for the lease of a retail package
liquor store location in a shopping center at 11225 Miramar Parkway, #245,
Miramar, Florida 33024 (Store #24). The shopping center is currently in the
developmental stage and the Lease Agreement is still contingent upon our receipt
of delivery of the leased premises by August 28, 2021. During the second quarter
of our fiscal year 2021, we entered into an Architectural Professional Services
Agreement with a third-party unaffiliated architect for design and development
services for this new location (Store #24) for a total contract price of
$18,650, which total amount has been paid in full through July 3, 2021.



Purchase Commitments



In order to fix the cost and ensure adequate supply of baby back ribs for our
restaurants, on November 9, 2020, we entered into a purchase agreement with our
current rib supplier, whereby we agreed to purchase approximately $6,420,000 of
baby back ribs during calendar year 2021 at a fixed cost. Subsequent to the end
of the third quarter of our fiscal year 2021, we agreed to increase the fixed
cost of the remaining baby back ribs for our calendar year 2021 by approximately
$408,000 to ensure adequate supply for our restaurants during calendar year

2022.



                                      30

  Index

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





Working Capital



The table below summarizes the current assets, current liabilities, and working
capital for our fiscal quarters ended July 3, 2021, June 27, 2020 and our fiscal
year ended October 3, 2020.



Item                    July 3, 2021       June 27, 2020       Oct. 3, 2020
                                          (in Thousands)

Current Assets        $        39,768     $        37,288     $       36,508
Current Liabilities            20,796              21,164             25,362
Working Capital       $        18,972     $        16,124     $       11,146
Our working capital increased during our fiscal quarter ended July 3, 2021 from
our working capital for our fiscal quarter ended June 27, 2020 and our working
capital as of October 3, 2020 due to our receipt of $3.35 million from the

2nd
PPP Loans.



While there can be no assurance due to, among other things, unanticipated
expenses or unanticipated decline in revenues, or both, we believe that our cash
on hand, positive cash flow from operations and borrowed funds will adequately
fund operations, debt reductions and planned capital expenditures for the next
twelve months.

Off-Balance Sheet Arrangements

We do not have off-balance sheet arrangements.





Inflation



The primary inflationary factors affecting our operations are food, beverage and
labor costs. A large number of restaurant personnel are paid at rates based upon
applicable minimum wage and increases in minimum wage directly affect labor
costs. To date, inflation has not had a material impact on our operating
results, but this circumstance may change in the future if food and fuel costs
rise.

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