Form 10-Q - Quarterly report [Sections 13 or 15(d)]

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 30, 2023

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 1-6836

FLANIGAN’S ENTERPRISES, INC.

(Exact name of registrant as specified in its charter)

Florida	59-0877638
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

5059 N.E. 18th Avenue, Fort Lauderdale, Florida	33334
(Address of principal executive offices)	(Zip Code)

(954) 377-1961

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $.10 par value	BDL	NYSE AMERICAN

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ☐	Accelerated filer ☐	Non-accelerated filer ☒	Smaller reporting company ☒
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

On February 12, 2024, 1,858,647 shares of Common Stock, $0.10 par value per share, were outstanding.

FLANIGAN’S ENTERPRISES, INC. AND SUBSIDIARIES

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME	1
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME	2
CONDENSED CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 30, 2023 (UNAUDITED) AND SEPTEMBER 30, 2023	3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY	5
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	6
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	8

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	14
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	22
ITEM 4. CONTROLS AND PROCEDURES	22

PART II. OTHER INFORMATION	24

ITEM 1. LEGAL PROCEEDINGS	24
ITEM 1A. RISK FACTORS	Not Applicable
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	24
ITEM 3. DEFAULTS UPON SENIOR SECURITIES	Not Applicable
ITEM 4. MINE SAFETY DISCLOSURES	Not Applicable
ITEM 5. OTHER INFORMATION	Not Applicable
ITEM 6. EXHIBITS	24
SIGNATURES	25

LIST XBRL DOCUMENTS

As used in this Quarterly Report on Form 10-Q, the terms “we,” “us,” “our,” the “Company” and “Flanigan’s” mean Flanigan’s Enterprises, Inc. and its subsidiaries (unless the context indicates a different meaning).

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FLANIGAN’S ENTERPRISES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except share and per share amounts)

	Thirteen Weeks Ended
	December 30, 2023			December 31, 2022
REVENUES:
Restaurant food sales	$	26,355		$	24,767
Restaurant bar sales		7,463			6,988
Package store sales		10,602			9,403
Franchise related revenues		418			459
Rental income		253			213
Other operating income		49			31
		45,140			41,861
COSTS AND EXPENSES:
Cost of merchandise sold:
Restaurant and lounges		11,831			10,806
Package goods		7,880			6,984
Payroll and related costs		14,385			13,636
Occupancy costs		2,164			1,848
Selling, general and administrative expenses		8,087			7,390
		44,347			40,664
Income from Operations		793			1,197
OTHER INCOME (EXPENSE):
Interest expense		(262	)		(275	)
Interest and other income		46			15
Loss on disposal of property and equipment		(1	)		—
		(217	)		(260	)

Income before benefit (provision) for income taxes		576			937

Benefit (provision) for income taxes		18			(63	)

Net Income		594			874

Less: Net Income attributable to noncontrolling interests		(485	)		(250	)
Net Income Attributable to Flanigan’s Enterprises Inc. Stockholders	$	109		$	624

Net Income Per Common Share:
Basic and Diluted	$	0.06		$	0.34

Weighted Average Shares and Equivalent Shares Outstanding

Basic and Diluted		1,858,647			1,858,647

See accompanying notes to unaudited condensed consolidated financial statements.

FLANIGAN’S ENTERPRISES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

	Thirteen Weeks Ended
	December 30,			December 31,
	2023			2022
Net Income:	$	594		$	874
Other comprehensive loss:
Change in fair value of interest rate swap, net of tax		(338	)		—
Total Comprehensive Income	$	256		$	874

See accompanying notes to unaudited condensed consolidated financial statements.

FLANIGAN’S ENTERPRISES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

DECEMBER 30, 2023 (UNAUDITED) AND SEPTEMBER 30, 2023

(in thousands, except share and per share amounts)

ASSETS	December 30, 2023		September 30, 2023

Current Assets:

Cash and cash equivalents	$	26,897	$	25,532
Prepaid income taxes		237		219
Other receivables		784		834
Inventories		7,677		7,198
Prepaid expenses		651		1,511

Total current assets		36,246		35,294

Property and equipment, net		74,887		74,724
Construction in progress		5,640		5,416
		80,527		80,140

Right-of-use assets, operating leases		26,310		26,987

Investment in limited partnerships		249		252

Other Assets:

Liquor licenses		1,268		1,268
Deposits on property and equipment		843		887
Leasehold interests, net		89		63
Other		410		878

Total other assets		2,610		3,096

Total assets	$	145,942	$	145,769

See accompanying notes to unaudited condensed consolidated financial statements.

FLANIGAN’S ENTERPRISES, INC, AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

DECEMBER 30, 2023 (UNAUDITED) AND SEPTEMBER 30, 2023

(in thousands, except share and per share amounts)

(Continued)

LIABILITIES AND STOCKHOLDERS' EQUITY	December 30, 2023			September 30, 2023

Current Liabilities:

Accounts payable and accrued expenses	$	8,630		$	9,271
Accrued compensation		2,579			1,808
Due to franchisees		4,546			4,977
Current portion of long-term debt		1,310			1,295
Operating lease liabilities, current		2,413			2,385
Deferred revenue		4,852			2,635
Total current liabilities		24,330			22,371

Long-Term Debt, Net of Current Portion		21,506			21,833

Operating lease liabilities, non-current		25,240			25,850
Deferred tax liabilities		686			801

Total liabilities		71,762			70,855

Commitments and contingencies
Stockholders’ equity:
Flanigan’s Enterprises, Inc. Stockholders’ Equity
Common stock, $.10 par value, 5,000,000 shares authorized; 4,197,642 shares issued; 1,858,647 shares outstanding;		420			420
Capital in excess of par value		6,240			6,240
Retained earnings		58,356			58,247
Accumulated other comprehensive income		57			395
Treasury stock, at cost, 2,338,995 shares		(6,077	)		(6,077	)
Total Flanigan’s Enterprises, Inc. stockholders’ equity		58,996			59,225
Noncontrolling interests		15,184			15,689
Total stockholders' equity		74,180			74,914

Total liabilities and stockholders' equity	$	145,942		$	145,769

See accompanying notes to unaudited condensed consolidated financial statements.

FLANIGAN’S ENTERPRISES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS

OF STOCKHOLDERS’ EQUITY

FOR THE THIRTEEN WEEKS ENDED DECEMBER 30, 2023 AND DECEMBER 31, 2022

(in thousands, except share amounts)

					Capital in
	Common Stock				Excess of					Retained		Treasury Stock					Noncontrolling
	Shares		Amount		Par Value		AOCI			Earnings		Shares		Amount			Interests			Total

Balance, September 30, 2023		4,197,642	$	420	$	6,240	$	395		$	58,247		2,338,995	$	(6,077	)	$	15,689		$	74,914

Net income		—		—		—		—			109		—		—			485		$	594
Other comprehensive (loss)		—		—		—		(338	)		—		—		—			—			(338	)
Distributions to noncontrolling interests		—		—		—		—			—		—		—			(990	)		(990	)

Balance, December 30, 2023		4,197,642	$	420	$	6,240	$	57		$	58,356		2,338,995	$	(6,077	)	$	15,184		$	74,180

	Common Stock				Capital in Excess of				Retained		Treasury Stock					Noncontrolling
	Shares		Amount		Par Value		AOCI		Earnings		Shares		Amount			Interests			Total

Balance, October 1, 2022		4,197,642	$	420	$	6,240	$	—	$	55,086		2,338,995	$	(6,077	)	$	17,671		$	73,340

Net income		—		—		—		—		624		—		—			250		$	874
Distributions to noncontrolling interests		—		—		—		—		—		—		—			(829	)	$	(829	)
Balance, December 31, 2022		4,197,642	$	420	$	6,240	$	—	$	55,710		2,338,995	$	(6,077	)	$	17,092		$	73,385

See accompanying notes to unaudited condensed consolidated financial statements.

FLANIGAN’S ENTERPRISES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THIRTEEN WEEKS ENDED DECEMBER 30, 2023 AND DECEMBER 31, 2022

(in thousands)

	December 30, 2023			December 31, 2022
Cash Flows from Operating Activities:
Net income	$	594		$	874
Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities:
Depreciation and amortization		981			815
Amortization of leasehold interests		5			6
Amortization of operating lease right-of-use assets		677			610
Loss on abandonment of property and equipment		1			7
Amortization of deferred loan costs		9			10
(Income) loss from unconsolidated limited partnership		(5	)		3

Changes in operating assets and liabilities:
(Increase) decrease in:
Other receivables		50			(183	)
Prepaid income taxes		(18	)		(63	)
Inventories		(479	)		(75	)
Prepaid expenses		860			845
Other assets		15			40
Increase (decrease) in:
Accounts payable and accrued expenses		(444	)		1,554
Operating lease liabilities		(582	)		(547	)
Due to franchisees		(431	)		200
Deferred revenue		2,217			1,783
Net cash and cash equivalents provided by operating activities		3,450			5,879

Cash Flows from Investing Activities:
Purchase of property and equipment		(660	)		(982	)
Purchase of construction in progress		(29	)		(452	)
Deposits on property and equipment		(71	)		(1,262	)
Purchase of leaseholds		(31	)		—
Proceeds from sale of property and equipment		9			8
Distributions from unconsolidated limited partnership		8			8
Net cash and cash equivalents used in investing activities		(774	)		(2,680	)

See accompanying notes to unaudited condensed consolidated financial statements.

FLANIGAN’S ENTERPRISES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THIRTEEN WEEKS ENDED DECEMBER 30, 2023 AND DECEMBER 31, 2022

(in thousands)

(Continued)

	December 30, 2023			December 31, 2022
Cash Flows from Financing Activities:
Payments on long-term debt		(321	)		(1,365	)
Distributions to limited partnerships’ noncontrolling interests		(990	)		(829	)
Net cash and cash equivalents used in financing activities		(1,311	)		(2,194	)
Net Increase in Cash and Cash Equivalents		1,365			1,005
Cash and Cash Equivalents - Beginning of Period		25,532			42,138
Cash and Cash Equivalents - End of Period	$	26,897		$	43,143
Supplemental Disclosure for Cash Flow Information:
Cash paid during the period for:
Interest	$	262		$	275
Income taxes	$	—		$	126
Supplemental Disclosure of Non-Cash Investing and Financing Activities:
Decrease in fair value of interest rate swap	$	453		$	—
Purchase deposits capitalized to property and equipment	$	115		$	28
Purchase deposits transferred to construction in progress	$	—		$	37
Construction in progress transferred to property and equipment	$	379		$	2,598
Construction in progress in accounts payable and accrued expenses	$	574		$	—

See accompanying notes to unaudited condensed consolidated financial statements.

FLANIGAN’S ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THIRTEEN WEEKS ENDED DECEMBER 30, 2023 AND DECEMBER 31, 2022

(1) BASIS OF PRESENTATION:

The accompanying condensed consolidated financial information for the thirteen weeks ended December 30, 2023 and December 31, 2022 is unaudited. Financial information as of September 30, 2023 has been derived from the audited financial statements of Flanigan’s Enterprises, Inc., a Florida corporation, together with its subsidiaries, (the “Company”, “we”, “our”, “ours” and “us” as the context requires), but does not include all disclosures required by accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the financial information for the periods indicated have been included. For further information regarding the Company’s accounting policies, refer to the Consolidated Financial Statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2023. Operating results for interim periods are not necessarily indicative of results to be expected for a full year.

The condensed consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries and the accounts of the ten limited partnerships in which we act as general partner and have controlling interests. All intercompany balances and transactions have been eliminated. Non-controlling interest represents the limited partners’ proportionate share of the net assets and results of operations of the ten limited partnerships.

The consolidated financial statements and related disclosures for condensed interim reporting are prepared in conformity with accounting principles generally accepted in the United States. We are required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and revenue and expenses during the periods reported. These estimates include assessing the estimated useful lives of tangible assets, the recognition of deferred tax assets and liabilities and estimates relating to the calculation of incremental borrowing rates and length of leases associated with right-of-use assets and corresponding liabilities and estimates relating to loyalty reward programs. Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in our consolidated financial statements in the period they are determined to be necessary. Although these estimates are based on our knowledge of current events and actions we may undertake in the future, they may ultimately differ from actual results.

(2) EARNINGS PER SHARE:

We follow Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Section 260 - “Earnings per Share”. This section provides for the calculation of basic and diluted earnings per share. The data on Page 1 shows the amounts used in computing earnings per share. As of December 30, 2023 and December 31, 2022, no stock options or other potentially dilutive securities were outstanding and, accordingly, there is no difference in basic and diluted per share amounts.

(3) RECENTLY ADOPTED AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS:

Adopted

The FASB issued guidance, ASU 2016-13 Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which provides a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. This guidance is effective for the Company in the first quarter of our fiscal year 2024; however, after performing a thorough analysis the Company concluded there is no material impact from the adoption of this ASU.

Recently Issued

The FASB issued guidance, ASU 2022-06 Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides an optional expedient and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. In response to the concerns about structural risks of interbank offered rates (“IBORs”) and, particularly, the risk of cessation of the London interbank offered rate (“LIBOR”), regulators in several jurisdictions around the world have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or transaction based and less susceptible to manipulation. This accounting standards update provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued. LIBOR rates were published until June 30, 2023. All principal and interest of the Term Loan was paid during the first quarter of our fiscal year 2023, so the discontinuance of LIBOR rates did not impact us.

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which updates reportable segment disclosure requirements, primarily through requiring enhanced disclosures about significant segment expenses and information used to assess segment performance. This ASU will be effective for the Company in our fiscal year 2025, with the guidance applied retrospectively to all periods presented in the financial statements. Early adoption is permitted. We are currently evaluating the impact the adoption of the new accounting guidance will have on our segment disclosures.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,”, which requires enhanced income tax disclosures, primarily related to standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. This ASU will be effective for the Company in our fiscal year 2026, with the guidance applied either prospectively or retrospectively. Early adoption is permitted. We are currently evaluating the impact the adoption of the new accounting guidance will have on our tax disclosures.

There are no other recently issued accounting pronouncements that we have not yet adopted that we believe may have a material effect on our condensed consolidated financial statements.

(4) INCOME TAXES:

We account for our income taxes using FASB ASC Topic 740, “Income Taxes”, which requires among other things, recognition of future tax benefits measured at enacted rates attributable to deductible temporary differences between financial statement and income tax basis of assets and liabilities and to tax net operating loss carryforwards and tax credits to the extent that realization of said tax benefits is more likely than not. The Company’s income tax expense computed at the statutory federal rate of 21% differs from its effective tax rate primarily due to state income taxes, income tax credits, and noncontrolling interests.

(5) PURCHASE OF LEASEHOLD / SUB-LEASEHOLD INTERESTS:

In 1974, we sold the underlying ground lease to the real property located at 8600 Biscayne Boulevard, El Portal, Florida to related and unrelated third parties and simultaneously subleased it back. We operate our retail package liquor store (Store #47) and warehouse from this location. In the first quarter of our fiscal year 2024, we re-purchased a 4% interest in the underlying ground lease, as well as the sublease agreement from an unrelated third party for $31,000 and currently own 56% of each lease. As a result, we now only pay 44% of the rent due under the sublease agreement.

(6) DEBT:

In February 2023, we determined that as of December 31, 2022, we did not meet the required Post-Distribution Basic Fixed Charge Coverage Ratio (the “Post-Distribution/Fixed Charge Covenant”) contained in each of our six (6) loans (the “Institutional Loans”) with an unrelated third party institutional lender (the “Institutional Lender’). On February 23, 2023, we received from the Institutional Lender a written waiver of the non-compliance with the Post-Distribution/Fixed Charge Covenant (the “Covenant Non-Compliance”), pursuant to which, among other things, the Institutional Lender waived (1) the non-compliance as of December 31, 2022 and (2) their right to exercise certain remedies under the Institutional Loans, including the right to accelerate the indebtedness owed by us thereunder, resulting in the indebtedness under the Institutional Loans to be immediately due and payable, which would have a material adverse effect on the Company. The Post-Distribution/Fixed Charge Covenant requires we maintain a ratio of at least 1.15 to 1.00 and for the twelve (12) months ended December 30, 2023 our ratio was calculated to be 1.55 to 1.00 and as a result, our classification of debt is appropriate as of December 30, 2023.

For further information regarding the Company’s long-term debt, refer to the Consolidated Financial Statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2023.

(7) INSURANCE PREMIUMS:

During the first quarter of our fiscal year 2024, for the policy year commencing December 30, 2023, we obtained coverage on the following property, general liability, excess liability and terrorism policies with premiums totaling approximately $3.920 million, of which property, general liability, excess liability and terrorism insurance includes coverage for our franchises (of approximately $850,000), which are not included in our consolidated financial statements:

(i) For the policy year beginning December 30, 2023, our general liability insurance, excluding limited partnerships, is a one (1) year policy with our insurance carriers. For the policy commencing December 30, 2023, the $10,000 self-insured retention per occurrence increases to $50,000 for us but remains the same at $10,000 for the limited partnerships. The one (1) year general liability insurance premium is in the amount of $455,000;

(ii) For the policy year beginning December 30, 2023, our general liability insurance for our limited partnerships is a one (1) year policy with our insurance carriers. The one (1) year general liability insurance premium is in the amount of $1,055,000;

(iii) For the policy year beginning December 30, 2023, our automobile insurance is a one (1) year policy. The one (1) year automobile insurance premium is in the amount of $211,000;

(iv) For the policy year beginning December 30, 2023, our property insurance is a one (1) year policy. The one (1) year property insurance premium is in the amount of $1,416,000;

(v) For the policy year beginning December 30, 2023, our excess liability insurance is a one (1) year policy. The one (1) year excess liability insurance premium is in the amount of $764,000;

(vii) For the policy year beginning December 30, 2023, our terrorism insurance is a one (1) year policy. The one (1) year terrorism insurance premium is in the amount of $19,000.

We paid the $3,920,000 annual premium amounts on January 4, 2024, which includes coverage for our franchises which are not included in our consolidated financial statements.

(8) COMMITMENTS AND CONTINGENCIES:

Construction Contract

2505 N. University Drive, Hollywood, Florida (Store #19 – “Flanigan’s”)

During the first quarter of our fiscal year 2022, we entered into an agreement with a third party unaffiliated general contractor to re-build our restaurant located at 2505 N. University Drive, Hollywood, Florida (Store#19), which has been closed since October 2, 2018 due to damage caused by a fire, totaling $2,515,000 and through the end of the first quarter of our fiscal year 2024 we agreed to change orders increasing the total contract price by $1,252,000 to $3,767,000, of which $2,625,000 has been paid through December 30, 2023 and $350,000 has been paid subsequent to the end of the first quarter of our fiscal year 2024.

Leases

To conduct certain of our operations, we lease restaurant and package liquor store space in South Florida from unrelated third parties. Our leases have remaining lease terms of up to 49 years, some of which include options to renew and extend the lease terms for up to an additional 30 years. We presently intend to renew some of the extension options available to us and for purposes of computing the right-of-use assets and lease liabilities required by ASC 842, we have incorporated into all lease terms which may be extended, an additional term of the lesser of (i) the amount of years the lease may be extended; or (ii) 15 years.

Following adoption of ASC 842 during our fiscal year ended October 3, 2020, common area maintenance and property taxes are not considered to be lease components.

The components of lease expense are as follows:

	(in thousands)
	13 Weeks		13 Weeks
	Ended December 30, 2023		Ended December 31, 2022
Operating Lease Expense, which is included in occupancy costs	$	1,000	$	956

	(in thousands)
Classification on the Condensed Consolidated Balance Sheets	December 30, 2023		September 30, 2023

Assets
Operating lease assets	$	26,310	$	26,987

Liabilities
Operating lease current liabilities	$	2,413	$	2,385
Operating lease non-current liabilities	$	25,240	$	25,850

Weighted Average Remaining Lease Term:
Operating leases		10.08		9.86

Weighted Average Discount:
Operating leases		4.75%		4.75%

The following table outlines the minimum future lease payments for the next five years and thereafter:

	(in thousands)
For fiscal year	Operating
2024 (nine (9) months)	$	2,710
2025		3,598
2026		3,432
2027		3,335
2028		3,346
Thereafter		21,808

Total lease payments (undiscounted cash flows)		38,229
Less imputed interest		(10,576	)
Total operating lease liabilities	$	27,653

Litigation

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. We currently have no “dram shop” claims.

From time to time, we are a party to various other claims, legal actions and complaints arising in the ordinary course of our business, including claims resulting from “slip and fall” accidents, claims under federal and state laws governing access to public accommodations, employment-related claims and claims from guests alleging illness, injury or other food quality, health or operational concerns. It is our opinion, after consulting with legal counsel, that all such matters are without merit or involve such amounts that an unfavorable disposition, some of which is covered by insurance, would not have a material adverse effect on our financial position or results of operations.

(9) CORONAVIRUS PANDEMIC:

In March 2020, a novel strain of coronavirus was declared a global pandemic and a National Public Health Emergency. The novel coronavirus pandemic, (“COVID-19”) adversely affected and will, in all likelihood continue to adversely affect, our restaurant operations and financial results for the foreseeable future. The Department of Health and Human Services (HHS) permitted the federal Public Health Emergency for COVID-19 (PHE) declared by the Secretary of the Department of Health and Human Services (Secretary) under Section 319 of the Public Health Service (PHS) Act to expire at the end of the day on May 11, 2023.

COVID-19 has had a material adverse effect on our access to supplies or labor and there can be no assurance that there will not be a significant adverse impact on our supply chain or access to labor in the future. We are actively monitoring our food suppliers to assess how they are managing their operations to mitigate supply flow and food safety risks. To ensure we mitigate potential supply availability risk, we are building additional inventory back stock levels when appropriate and we have also identified alternative supply sources in key product categories including but not limited to food, sanitation and safety supplies.

(10) BUSINESS SEGMENTS:

We operate in two reportable segments – package stores and restaurants. The operation of package stores consists of retail liquor sales and related items. The operation of restaurants consists of restaurant food and bar sales. Operating income is total revenue less cost of merchandise sold and operating expenses relative to each segment. In computing operating income, none of the following items have been included: interest expense, other non-operating income and expenses and income taxes. Identifiable assets by segment are those assets that are used in our operations in each segment. Corporate assets are principally cash and real property, improvements, furniture, equipment and vehicles used at our corporate headquarters. We do not have any operations outside of the United States and transactions between restaurants and package liquor stores are not material. Information concerning the revenues and operating income for the thirteen weeks ended December 30, 2023 and December 31, 2022, and identifiable assets for the two reportable segments in which we operate, are shown in the following tables.

	(in thousands)

	Thirteen Weeks			Thirteen Weeks
	Ending			Ending
	December 30, 2023			December 31, 2022

Operating Revenues:
Restaurants	$	33,818		$	31,755
Package stores		10,602			9,403
Other revenues		720			703
Total operating revenues	$	45,140		$	41,861

Income from Operations Reconciled to Income After Income Taxes and Net Income Attributable to Noncontrolling Interests
Restaurants	$	1,171		$	779
Package stores		632			799
		1,803			1,578
Corporate expenses, net of other revenues		(1,010	)		(381	)
Income from Operations		793			1,197
Interest expense		(262	)		(275	)
Interest and Other income		46			15
Loss on disposal of property and equipment		(1	)		—
Income before benefit (provision) for Income Taxes	$	576		$	937
Benefit (provision) for Income Taxes		18			(63	)
Net Income		594			874
Net Income Attributable to Noncontrolling Interests		(485	)		(250	)
Net Income Attributable to Flanigan’s Enterprises, Inc. Stockholders	$	109		$	624

Depreciation and Amortization:
Restaurants	$	728		$	626
Package stores		127			90
		855			716
Corporate		131			105
Total Depreciation and Amortization	$	986		$	821

Capital Expenditures:
Restaurants	$	1,144		$	947
Package stores		47			350
		1,191			1,297
Corporate		187			202
Total Capital Expenditures	$	1,378		$	1,499

	(in thousands)
	December 30,		September 30,
	2023		2023
Identifiable Assets:
Restaurants	$	75,741	$	76,575
Package store		23,947		23,714
		99,688		100,289
Corporate		46,254		45,480
Consolidated Totals	$	145,942	$	145,769

(11) SUBSEQUENT EVENTS:

Subsequent events have been evaluated through the date these unaudited condensed consolidated financial statements were issued and no further events required adjustments or disclosure.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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 September 30, 2023. 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 December 30, 2023, Flanigan’s Enterprises, Inc., a Florida corporation, together with its subsidiaries (“we”, “our”, “ours” and “us” as the context requires), (i) operates 31 units, consisting of restaurants, package liquor stores, combination restaurant/package liquor stores and a sports bar that we either own or have operational control over and partial ownership in; and franchises an additional five units, consisting of two restaurants (one of which we operate) and three combination restaurant/package liquor stores. The table below provides information concerning the type (i.e. restaurant, sports bar, package liquor store or combination restaurant/package liquor store) and ownership of the units (i.e. whether (i) we own 100% of the unit; (ii) the unit is owned by a limited partnership of which we are the sole general partner and/or have invested in; or (iii) the unit is franchised by us), as of December 30, 2023 and as compared to September 30, 2023. With the exception of “The Whale’s Rib”, a restaurant we operate but do not own, and “Brendan’s Sports Pub” a restaurant/bar we own, all of the restaurants operate under our service marks “Flanigan’s Seafood Bar and Grill” or “Flanigan’s” and all of the package liquor stores operate under our service marks “Big Daddy’s Liquors” or “Big Daddy’s Wine & Liquors”.

TYPES OF UNITS	December 30, 2023	September 30, 2023
Company Owned:
Combination package liquor store and restaurant	2	3	(1)
Restaurant only, including sports bar	8	8
Package liquor store only	9	8	(1)

Company Managed Restaurants Only:
Limited partnerships	10	10
Franchise	1	1
Unrelated Third Party	1	1

Total Company Owned/Operated Units	31	31
Franchised Units	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. During the first quarter of our fiscal year 2023, we opened our newly built stand-alone package liquor store on this site replacing our package liquor store destroyed by fire and previously operating here (Store #19P). Store #19P is now reflected in the above chart as a stand-alone liquor store, rather than as a combination unit. We are constructing a stand-alone restaurant building on this site (adjacent to the package liquor store), replacing our restaurant destroyed by fire and previously operating here (Store #19R). We believe this restaurant will be operational during our fiscal year 2024.

(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.

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 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 as a return of capital. 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 a profit distribution. As of December 30, 2023, all limited partnerships, with the exception of the 2022 Sunrise restaurant (Store #85), which opened for business in March 2022 and the 2023 Miramar restaurant (Store #25), which opened for business in April 2023, have returned all cash invested and we receive an annual management fee equal to one-half (½) of the cash available for distribution by the limited partnership. In addition to receipt of distributable amounts from the limited partnerships, we receive a fee equal to 3% of gross sales for use of the service mark “Flanigan’s Seafood Bar and Grill” or “Flanigan’s”.

RESULTS OF OPERATIONS

	-----------------------Thirteen Weeks Ended-----------------------
	December 30, 2023				December 31, 2022
	Amount				Amount
	(In thousands)		Percent		(In thousands)		Percent
Restaurant food sales	$	26,355		59.33	$	24,767		60.17
Restaurant bar sales		7,463		16.80		6,988		16.98
Package store sales		10,602		23.87		9,403		22.85

Total Sales	$	44,420		100.00	$	41,158		100.00

Franchise related revenues		418				459
Rental income		253				213
Other operating income		49				31

Total Revenue	$	45,140			$	41,861

Comparison of Thirteen Weeks Ended December 30, 2023 and December 31, 2022.

Revenues. Total revenue for the thirteen weeks ended December 30, 2023 increased $3,279,000 or 7.83% to $45,140,000 from $41,861,000 for the thirteen weeks ended December 31, 2022 due primarily to increased package liquor store and restaurant sales, increased menu prices, revenue generated from the opening of our limited partnership owned restaurant in Miramar, Florida (Store #25) in April 2023, the opening of the package liquor store in Hollywood, Florida (Store #19P) in December 2022, and the opening of the package liquor store in Miramar, Florida (Store #24) in March 2023. Effective March 26, 2023 we increased menu prices for our food offerings to target an increase to our food revenues of approximately 2.06% and effective March 19, 2023 we increased menu prices for our bar offerings to target an increase to our bar revenues of approximately 5.65% annually, to offset higher food costs and higher overall expenses (collectively the “Recent Price Increases”). Prior to these increases, we previously raised menu prices in the first quarter of our fiscal year 2022.

Restaurant Food Sales. Restaurant revenue generated from the sale of food, including non-alcoholic beverages, at restaurants totaled $26,355,000 for the thirteen weeks ended December 30, 2023 as compared to $24,767,000 for the thirteen weeks ended December 31, 2022. The increase in restaurant food sales during the thirteen weeks ended December 30, 2023 as compared to restaurant food sales during the thirteen weeks ended December 31, 2022 is attributable to the increased menu prices, and restaurant food sales generated from the opening of our limited partnership owned restaurant in Miramar, Florida (Store #25) in April 2023. Comparable weekly restaurant food sales for restaurants open for all of the thirteen weeks ended December 30, 2023 and December 31, 2022, respectively, which consists of ten restaurants owned by us and nine restaurants owned by affiliated limited partnerships (excluding our Miramar, Florida location Store #25 which opened for business during the third quarter of our fiscal year 2023) was $1,871,000 and $1,882,000 for the thirteen weeks ended December 30, 2023 and December 31, 2022, respectively, a decrease of 0.58%. Comparable weekly restaurant food sales for Company owned restaurants only was $838,000 and $841,000 for the thirteen weeks ended December 30, 2023 and December 31, 2022, respectively, a decrease of 0.36%. Comparable weekly restaurant food sales for affiliated limited partnership owned restaurants only (excluding Store #25 which opened for business during the third quarter of our fiscal year 2023), was $1,034,000 and $1,041,000 for the thirteen weeks ended December 30, 2023 and December 31, 2022, respectively, a decrease of 0.67%. We expect that restaurant food sales, including non-alcoholic beverages, for the balance of our fiscal year 2024 will increase due to increased restaurant traffic and the operation of Store #25 during our fiscal year 2024.

Restaurant Bar Sales. Restaurant revenue generated from the sale of alcoholic beverages at restaurants totaled $7,463,000 for the thirteen weeks ended December 30, 2023 as compared to $6,988,000 for the thirteen weeks ended December 31, 2022. The increase in restaurant bar sales during the thirteen weeks ended December 30, 2023 is primarily due to the increased menu prices and restaurant bar sales generated from the opening of our limited partnership owned restaurant in Miramar, Florida (Store #25) in April 2023. Comparable weekly restaurant bar sales (for restaurants open for all of the thirteen weeks ended December 30, 2023 and December 31, 2022 respectively, which consists of ten restaurants owned by us and nine restaurants owned by affiliated limited partnerships, (excluding our Miramar, Florida location Store #25,which opened for business during the third quarter of our fiscal year 2023) was $537,000 and $538,000 for the thirteen weeks ended December 30, 2023 and December 31, 2022, respectively, a decrease of 0.19%. Comparable weekly restaurant bar sales for Company owned restaurants only was $235,000 and $229,000 for the thirteen weeks ended December 30, 2023 and December 31, 2022, respectively, an increase of 2.62%. Comparable weekly restaurant bar sales for affiliated limited partnership owned restaurants only (excluding Store #25 which opened for business during the third quarter of our fiscal year 2023), was $302,000 and $309,000 for the thirteen weeks ended December 30, 2023 and December 31, 2022, respectively, a decrease of 2.27%. We expect that restaurant bar sales for the balance of our fiscal year 2024 will increase due to increased restaurant traffic and the operation of Store #25 during the balance of our fiscal year 2024.

Package Store Sales. Revenue generated from sales of liquor and related items at package liquor stores totaled $10,602,000 for the thirteen weeks ended December 30, 2023 as compared to $9,403,000 for the thirteen weeks ended December 31, 2022, an increase of $1,199,000. This increase was primarily due to increased package liquor store traffic and the package liquor sales generated from the operation of our package liquor stores in Hollywood, Florida (Store #19P) and Miramar, Florida (Store #24). Sales were up notwithstanding that both New Year’s Eve and New Year’s Day fall in the second quarter of our fiscal year 2024, while New Year’s Eve fell in the first quarter of our fiscal year 2023 and New Year’s Day fell in the second quarter of fiscal year 2023. The weekly average of same store package liquor store sales, which includes nine (9) Company-owned package liquor stores (excluding Store #19P, which was closed due to a fire on October 2, 2018 but re-opened for business during the first quarter of our fiscal year 2023 and excluding Store #24 which opened for business during the second quarter of our fiscal year 2023), was $712,000 and $716,000 for the thirteen weeks ended December 30, 2023 and December 31, 2022, respectively, a decrease of 0.56%. We expect that package liquor store sales for our fiscal year 2024 will increase due to increased package liquor store traffic and the operation of the package liquor stores located in Hollywood, Florida (Store #19P) and in Miramar, Florida (Store #24).

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 December 30, 2023 increased $3,683,000 or 9.06% to $44,347,000 from $40,664,000 for the thirteen weeks ended December 31, 2022. The increase was primarily due to increased payroll, increased consultant fees to improve our accounting process and an expected general increase in food costs, costs and expenses incurred from our limited partnership owned restaurant in Miramar, Florida (Store #25), the package liquor store in Hollywood, Florida (Store #19P) and the package liquor store in Miramar, Florida (Store #24), partially 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 2024. Operating costs and expenses increased as a percentage of total revenue to approximately 98.24% for the thirteen weeks ended December 30, 2023 from 97.14% for the thirteen weeks ended December 31, 2022.

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 December 30, 2023 increased to $21,987,000 from $20,949,000 due to higher sales volume for the thirteen weeks ended December 30, 2023. Gross profit margin for the restaurant food and bar sales decreased during the thirteen weeks ended December 30, 2023 when compared to the thirteen weeks ended December 31, 2022 due to higher food costs partially offset by, among other things, recent price increases. 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 65.02% for the thirteen weeks ended December 30, 2023 and 65.97% for the thirteen weeks ended December 31, 2022.

Package Store Sales. Gross profit for package store sales for the thirteen weeks ended December 30, 2023 increased to $2,722,000 from $2,419,000 for the thirteen weeks ended December 31, 2022. Our gross profit margin (calculated as gross profit reflected as a percentage of package liquor store sales), for package store sales was 25.67% for the thirteen weeks ended December 30, 2023 and 25.73% for the thirteen weeks ended December 31, 2022. We anticipate that the gross profit margin for package liquor store merchandise will decrease for the balance of fiscal year 2024 due to higher costs and a reduction in pricing of certain package store merchandise to be more competitive.

Payroll and Related Costs. Payroll and related costs for the thirteen weeks ended December 30, 2023 increased $749,000 or 5.49% to $14,385,000 from $13,636,000 for the thirteen weeks ended December 31, 2022. Payroll and related costs for the thirteen weeks ended December 30, 2023 were higher due primarily to the opening of our limited partnership owned restaurant in Miramar, Florida (Store #25) in April 2023, the retail package liquor store in Hollywood, Florida (Store #19P) in December 2022, the retail package liquor store in Miramar, Florida (Store #24) in March 2023 and higher salaries to employees to remain competitive with other potential employees in a tight labor market. Payroll and related costs as a percentage of total revenue was 31.87% in the thirteen weeks ended December 30, 2023 and 32.57% of total revenue in the thirteen weeks ended December 31, 2022.

Occupancy Costs. Occupancy costs (consisting of percentage rent, common area maintenance, repairs, real property taxes, amortization of leasehold interests and rent expense associated with operating lease liabilities under ASC 842) for the thirteen weeks ended December 30, 2023 increased $316,000 or 17.10% to $2,164,000 from $1,848,000 for the thirteen weeks ended December 31, 2022, primarily due to an increase in real property taxes.

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 December 30, 2023 increased $697,000 or 9.43% to $8,087,000 from $7,390,000 for the thirteen weeks ended December 31, 2022, due primarily to Store #19P, Store #24, and Store #25 being open for the thirteen weeks ended December 30, 2023, increased consultant fees to improve our accounting process, inflation and otherwise to increases in expenses across all categories. Selling, general and administrative expenses increased as a percentage of total revenue for the thirteen weeks ended December 30, 2023 to 17.92% as compared to 17.65% for the thirteen weeks ended December 31, 2022.

Depreciation and Amortization. Depreciation and amortization expense for the thirteen weeks ended December 30, 2023, which is included in selling, general and administrative expenses, increased $165,000 or 20.10% to $986,000 from $821,000 from the thirteen weeks ended December 31, 2022. This increase is driven by the opening of Stores #19P, #24, and #25. As a percentage of total revenue, depreciation and amortization expense was 2.18% of revenue in the thirteen weeks ended December 30, 2023 and 1.96% of revenue in the thirteen weeks ended December 31, 2022.

Interest Expense, Net. Interest expense, net, for the thirteen weeks ended December 30, 2023 decreased $13,000 to $262,000 from $275,000 for the thirteen weeks ended December 31, 2022.

Income Taxes. Income tax for the thirteen weeks ended December 30, 2023 was a benefit of $18,000, as compared to an expense of $63,000 for the thirteen weeks ended December 31, 2022.

Net Income. Net income for the thirteen weeks ended December 30, 2023 decreased $280,000 or 32.04% to $594,000 from $874,000 for the thirteen weeks ended December 31, 2022 due primarily to higher food costs and overall increased expenses, including but not limited to, increased consultant fees to improve our accounting process. As a percentage of revenue, net income for the thirteen weeks ended December 30, 2023 is 1.32%, as compared to 2.09% for the thirteen weeks ended December 31, 2022.

Net Income Attributable to Flanigan’s Enterprises, Inc. Stockholders. Net income attributable to Flanigan’s Enterprises, Inc. stockholders for the thirteen weeks ended December 30, 2023 decreased $515,000 or 82.53% to $109,000 from $624,000 for the thirteen weeks ended December 31, 2022 due primarily to higher food costs and overall increased expenses, including but not limited to, increased consultant fees to improve our accounting process. As a percentage of revenue, net income attributable to stockholders for the thirteen weeks ended December 30, 2023 is 0.24%, as compared to 1.49% for the thirteen weeks ended December 31, 2022.

Menu Price Increases and Trends

During the thirteen weeks ended December 30, 2023, we did not increase our menu prices. During our fiscal year 2023 we increased menu prices for our food offerings (effective March 26, 2023) to target an aggregate increase to our food revenues of approximately 2.06% annually and we increased menu prices for our bar offerings (effective March 19, 2023) to target an increase to our bar revenues of approximately 5.65% annually to offset higher food and liquor costs and higher overall expenses. Prior to these increases, we previously raised menu prices in the first quarter of our fiscal year 2022.

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. 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.

Based on current COVID-19 trends, the Department of Health and Human Services (HHS) permitted the federal Public Health Emergency for COVID-19 (PHE) declared by the Secretary of the Department of Health and Human Services (Secretary) under Section 319 of the Public Health Service (PHS) Act to expire at the end of the day on May 11, 2023.

Liquidity and Capital Resources

We fund our operations through cash from operations and borrowings from third parties. As of December 30, 2023, we had cash and cash equivalents of approximately $26,897,000, an increase of $1,365,000 from our cash balance of $25,532,000 as of September 30, 2023.

Inflation is affecting all aspects of our operations, including but not limited to food, beverage, fuel and labor costs. Supply chain issues also contribute to inflation. Inflation, including supply chain issues are having a material impact on our operating results.

We believe that our current cash availability from our cash on hand and positive cash flow from operations 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 thirteen weeks ended December 30, 2023 and December 31, 2022.

	---------Thirteen Weeks Ended--------
	December 30, 2023			December 31, 2022
	(in thousands)

Net cash provided by operating activities	$	3,450		$	5,879
Net cash used in investing activities		(774	)		(2,680	)
Net cash used in financing activities		(1,311	)		(2,194	)

Net Increase in Cash and Cash Equivalents		1,365			1,005

Cash and Cash Equivalents, Beginning		25,532			42,138

Cash and Cash Equivalents, Ending	$	26,897		$	43,143

We did not declare or pay a cash dividend on our capital stock in the first quarter of our fiscal year 2024 or the first quarter of our fiscal year 2023. 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.

Capital Expenditures

In addition to using cash for our operating expenses, we use cash generated from operations and borrowings to fund the development and construction of new restaurants and to fund capitalized property improvements for our existing restaurants. During the thirteen weeks ended December 30, 2023, we acquired property and equipment and construction in progress of $1,378,000, (of which $115,000 was purchase deposits transferred to property and equipment and $574,000 was construction in progress in accounts payable), including $233,000 for renovations to two (2) Company owned restaurants. During the thirteen weeks ended December 31, 2022, we acquired property and equipment and construction in progress of $1,499,000, (of which $28,000 was purchase deposits transferred to property and equipment and $37,000 was purchase deposits transferred to construction in progress), including $105,000 for renovations to two (2) existing limited partnership owned restaurants and $149,000 for renovations to two (2) Company owned restaurants.

We anticipate the cost of refurbishment in our fiscal year 2024 will be approximately $450,000, excluding construction/renovations to Store#19R (our restaurant which is being rebuilt due to damages caused by a fire), although capital expenditures for our refurbishing program for fiscal year 2024 may be significantly higher.

Long-Term Debt

As of December 30, 2023, we had long-term debt (including the current portion) of $22,816,000, as compared to $23,128,000 as of September 30, 2023.

In February 2023, we determined that as of December 31, 2022, we did not meet the required Post-Distribution Basic Fixed Charge Coverage Ratio (the “Post-Distribution/Fixed Charge Covenant”) contained in each of our six (6) loans (the “Institutional Loans”) with our unrelated third party institutional lender (the “Institutional Lender’). On February 23, 2023, we received from the Institutional Lender, a written waiver of the non-compliance with the Post-Distribution/Fixed Charge Covenant (the “Covenant Non-Compliance”), pursuant to which, among other things, the Institutional Lender waived (1) the non-compliance as of December 31, 2022 and (2) their right to exercise certain remedies under the Institutional Loans, including the right to accelerate the indebtedness owed by us thereunder, resulting in the indebtedness under the Institutional Loans to be immediately due and payable, which would have a material adverse effect on the Company. The Post-Distribution/Fixed Charge Covenant requires we maintain a ratio of at least 1.15 to 1.00 and for the twelve (12) months ended December 30, 2023 our ratio was calculated to be 1.55 to 1.00 and as a result, our classification of debt is appropriate as of December 30, 2023.

Construction Contract

2505 N. University Drive, Hollywood, Florida (Store #19 – “Flanigan’s”)

Purchase Commitments

In order to fix the cost and ensure adequate supply of baby back ribs for our restaurants for calendar year 2024, we entered into a purchase agreement with our current rib supplier, whereby we agreed to purchase approximately $7.0 million of “2.25 & Down Baby Back Ribs” (industry jargon for the weight range in which slabs of baby back ribs are sold) from this vendor during calendar year 2024, at a prescribed cost, which we believe is competitive.

Working Capital

The table below summarizes the current assets, current liabilities, and working capital for our fiscal quarter ended December 30, 2023, and our fiscal year ended September 30, 2023.

Item	December 30, 2023		September 30, 2023
	(in Thousands)

Current Assets	$	36,246	$	35,294
Current Liabilities		24,330		22,371
Working Capital	$	11,916	$	12,923

Our working capital decreased during our fiscal quarter ended December 30, 2023 from our working capital for our fiscal year ended September 30, 2023 primarily due to our purchases of property and equipment.

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 and positive cash flow from operations will adequately fund operations, debt reductions and planned capital expenditures throughout our fiscal year 2024.

Off-Balance Sheet Arrangements

The Company does not have off-balance sheet arrangements.

Critical Accounting Policies

During the thirteen weeks ended December 30, 2023, we have not made any change to our critical accounting policies. See Item 7, page 40 of our Annual Report on Form 10-K for our fiscal year ended September 30, 2023 for a discussion of significant accounting policies.

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. Inflation is having a material impact on our operating results, especially rising food, fuel and labor costs. We have endeavored to offset the adverse effects of cost increases by increasing our menu prices.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We do not ordinarily hold market risk sensitive instruments for trading purposes and as of December 30, 2023 held no equity securities.

Interest Rate Risk

As part of our ongoing operations, we are exposed to interest rate fluctuations on our borrowings. As more fully described in Note 15 “Fair Value Measurements of Financial Instruments” to the Consolidated Financial Statements included in “Item 8. Financial Statements and Supplementary Data” of our Annual Report on Form 10-K for our fiscal year ended September 30, 2023, 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.

At December 30, 2023, we had one variable rate instrument outstanding that is impacted by changes in interest rates. The interest rate of our variable rate debt instrument is equal to the lender’s BSBY Screen Rate plus one and one-half percent (1.50%) per annum. 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”).

As a means of managing our interest rate risk on this debt instrument, we entered into an interest rate swap agreement with our unrelated third-party lender to convert this variable rate debt obligation to a fixed rate. We are currently party to the following interest rate swap agreement:

(i) The interest rate swap agreement entered into in September 2022 relates to the $8.90M Loan (the “$8.90M Term Loan Swap”). The $8.90M Term Loan Swap requires 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 determined that the interest rate swap agreement is an effective hedging agreement and that changes in fair value will be adjusted quarterly based on the valuation statement. As of December 30, 2023 the fair value of the swap agreement is reflected on the condensed consolidated balance sheet in other assets and accumulated other comprehensive income.

During our fiscal year 2023, we invested the aggregate sum of $900,000 in 90 day certificates of deposit, fully government guaranteed and at an average fixed annual interest rate of 4.87%. During the first quarter of our fiscal year 2024, the aggregate balance of our 90 day certificates of deposit from 2023 were rolled over into new 90 day certificates of deposit, fully government guaranteed and at an average fixed annual interest rate of 5.34%. Otherwise, at December 30, 2023, our cash resources offset our bank charges and any excess cash resources earn interest at variable rates. Accordingly, our return on these funds is affected by fluctuations in interest rates.

There is no assurance that interest rates will increase or decrease over our next fiscal year or that an increase will not have a material adverse effect on our operations.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed with the U.S. Securities and Exchange Commission (the “SEC”) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

As of December 30, 2023, an evaluation was performed under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) to the Securities Exchange Act of 1934). Based on that evaluation, management, including our Chief Executive Officer and Chief Financial Officer, concluded that as a result of the material weaknesses in internal control over financial reporting described below, our disclosure controls and procedures were not effective as of December 30, 2023.

Material Weakness in Internal Control Over Financial Reporting

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our interim or annual financial statements will not be prevented or detected on a timely basis.

During the course of our independent registered public accounting firm performing its quarterly review procedures in connection with our unaudited condensed consolidated financial statements to be included in our Form 10-Q for the first quarter of our 2023 fiscal year, we became aware of certain errors made by management in recording certain transactions and in performing debt covenant calculations. As a result of these errors we have concluded that we do not have a sufficient complement of trained and knowledgeable accounting personnel to prevent and detect errors on a timely basis and that this deficiency constitutes a material weakness in our internal control over financial reporting as of December 30, 2023.

During our fiscal year 2023, we began the process of addressing this material weakness by engaging qualified accounting consultants who have been brought on to enhance, and continue to enhance, our internal controls over financial reporting. These individuals are licensed CPA’s with appropriate levels of knowledge and experience in public accounting. During the first quarter of our fiscal year 2024, the Company has begun to staff the newly formed Financial Reporting Division of our Accounting Department. This Department is headed by a Financial Reporting Manager who reports directly to the CFO. This individual is a qualified CPA with experience in financial reporting and the restaurant industry. We will continue our efforts in our fiscal year 2024 of improving our accounting and finance related processes.

Changes in Internal Control Over Financial Reporting

During the thirteen weeks ended December 30, 2023, we have not made any change to our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. However, we are in the process of designing and planning to enhance certain controls to address the material weakness discussed above. There is no assurance that this process will result in remediation of the material weakness or prevent other material weaknesses from arising in the future.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

See “Litigation” in Note 8 of this Report and Item 1 and Item 3 to Part 1 of the Annual Report on Form 10-K for the fiscal year ended September 30, 2023 for a discussion of other legal proceedings resolved in prior years.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Purchase of Company Common Stock

During the thirteen weeks ended December 30, 2023 and December 31, 2022, we did not purchase any shares of our common stock. As of December 30, 2023, we still have authority to purchase 65,414 shares of our common stock under the discretionary plan approved by the Board of Directors at its meeting on May 17, 2007.

ITEM 6. EXHIBITS

The following exhibits are filed with this Report:

	Exhibit	Description

	31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.

	31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.

	32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

	32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

List of XBRL documents as exhibits 101

SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	FLANIGAN’S ENTERPRISES, INC.

Date: February 13, 2024	/s/ James G. Flanigan
	JAMES G. FLANIGAN, Chief Executive Officer and President

	/s/ Jeffrey D. Kastner
	JEFFREY D. KASTNER, Chief Financial Officer and Secretary
	(Principal Financial and Accounting Officer)

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EXHIBIT 31.1

CERTIFICATION PURSUANT TO RULE 13a-14(a) AND RULE 15d-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, James G. Flanigan, certify that:

I have reviewed this quarterly report on Form 10-Q of Flanigan’s Enterprises, Inc. for the period ended December 30, 2023;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the periods covered by this report;

Based on my knowledge, the condensed consolidated financial statements, and other financial information included in this quarterly report, fairly present in all material respects of the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this quarterly report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee or registrant’s board of directors or persons performing the equivalent function:

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting that are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 13, 2024	/s/ James G. Flanigan
	Name: James G. Flanigan
	Chief Executive Officer and President

EXHIBIT 31.2

CERTIFICATION PURSUANT TO RULE 13a-14(a) AND RULE 15d-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Jeffrey D. Kastner, certify that:

I have reviewed this quarterly report on Form 10-Q of Flanigan’s Enterprises, Inc. for the period ended December 30, 2023;

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting that are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 13, 2024

	/s/ Jeffrey D. Kastner
	Name: Jeffrey D. Kastner,
	Chief Financial Officer and Secretary

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Flanigan’s Enterprises, Inc., (the “Company”) on Form 10-Q for the period ended December 30, 2023, as filed with the Securities and Exchange Commission of the date hereof (the “Quarterly Report”), I, James G. Flanigan, Chief Executive Officer and President of the Company, certify, pursuant to 18 U.S.C. SS.1350, as adopted pursuant to ss.906 of the Sarbanes-Oxley Act of 2002, that:

(1)

This Quarterly Report on Form 10-Q of the Company, to which this certification is attached as an Exhibit, fully complies with the requirements of Section 13 (a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

This information contained in this Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: February 13, 2024	/s/ James G. Flanigan
	James G. Flanigan, Chief Executive Officer and President

The foregoing certificate is provided solely for the purpose of complying with Section 906 of the Sarbanes-Oxley Act of 2002 and for no other purpose whatsoever. Notwithstanding anything to the contrary set forth herein or in any of the Company’s previous filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, that might incorporate the Company’s future filings, including this quarterly report on Form 10-Q, in whole or in part, this certificate shall not be incorporated by reference into any such filings. A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Flanigan’s Enterprises, Inc., (the “Company”) on Form 10-Q for the period ended December 30, 2023, as filed with the Securities and Exchange Commission of the date hereof (the “Quarterly Report”), I, Jeffrey D. Kastner, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. SS.1350, as adopted pursuant to ss.906 of the Sarbanes-Oxley Act of 2002, that:

(1)

(2)

The information contained in this Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: February 13, 2024	/s/ Jeffrey D. Kastner
	Jeffrey D. Kastner
	Chief Financial Officer and Secretary

Document And Entity Information - shares	3 Months Ended
Document And Entity Information - shares	Dec. 30, 2023	Feb. 12, 2024
Document Information Line Items
Entity Registrant Name	FLANIGAN’S ENTERPRISES, INC.
Trading Symbol	BDL
Document Type	10-Q
Current Fiscal Year End Date	--09-30
Entity Common Stock, Shares Outstanding		1,858,647
Amendment Flag	false
Entity Central Index Key	0000012040
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Document Period End Date	Dec. 30, 2023
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q1
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	1-6836
Entity Incorporation, State or Country Code	FL
Entity Tax Identification Number	59-0877638
Entity Address, Address Line One	5059 N.E. 18th Avenue
Entity Address, City or Town	Fort Lauderdale
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	33334
City Area Code	(954)
Local Phone Number	377-1961
Title of 12(b) Security	Common Stock, $.10 par value
Security Exchange Name	NYSE
Entity Interactive Data Current	Yes

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	3 Months Ended
	Dec. 30, 2023	Dec. 31, 2022
REVENUES:
Other operating income	$ 49	$ 31
Total	45,140	41,861
COSTS AND EXPENSES:
Payroll and related costs	14,385	13,636
Occupancy costs	2,164	1,848
Selling, general and administrative expenses	8,087	7,390
Cost and expenses	44,347	40,664
Income from Operations	793	1,197
OTHER INCOME (EXPENSE):
Interest expense	(262)	(275)
Interest and other income	46	15
Loss on disposal of property and equipment	(1)
Total other income (expense)	(217)	(260)
Income before benefit (provision) for income taxes	576	937
Benefit (provision) for income taxes	18	(63)
Net Income	594	874
Less: Net Income attributable to noncontrolling interests	(485)	(250)
Net Income Attributable to Flanigan’s Enterprises Inc. Stockholders	$ 109	$ 624
Net Income Per Common Share:
Basic and Diluted (in Dollars per share)	$ 0.06	$ 0.34
Weighted Average Shares and Equivalent Shares Outstanding
Basic and Diluted (in Shares)	1,858,647	1,858,647
Restaurant food sales
REVENUES:
Revenue	$ 26,355	$ 24,767
Restaurant bar sales
REVENUES:
Revenue	7,463	6,988
Package store sales
REVENUES:
Revenue	10,602	9,403
Franchise related revenues
REVENUES:
Revenue	418	459
Rental income
REVENUES:
Revenue	253	213
Restaurant and lounges
COSTS AND EXPENSES:
Package goods	11,831	10,806
Package goods
COSTS AND EXPENSES:
Package goods	$ 7,880	$ 6,984

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Parentheticals) - $ / shares	3 Months Ended
	Dec. 30, 2023	Dec. 31, 2022
Income Statement [Abstract]
Basic and Diluted	$ 0.06	$ 0.34
Basic and Diluted	1,858,647	1,858,647

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended
	Dec. 30, 2023	Dec. 31, 2022
Statement of Comprehensive Income [Abstract]
Net Income:	$ 594	$ 874
Change in fair value of interest rate swap, net of tax	(338)
Total Comprehensive Income	$ 256	$ 874

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands	Dec. 30, 2023	Sep. 30, 2023
Current Assets:
Cash and cash equivalents	$ 26,897	$ 25,532
Prepaid income taxes	237	219
Other receivables	784	834
Inventories	7,677	7,198
Prepaid expenses	651	1,511
Total Current Assets	36,246	35,294
Property and equipment, net	74,887	74,724
Construction in Progress	5,640	5,416
Total Property, Equipment and Construction in Progress	80,527	80,140
Right-of-use assets, operating leases	26,310	26,987
Investment in Limited Partnership	249	252
Other Assets:
Liquor licenses	1,268	1,268
Deposits on property and equipment	843	887
Leasehold interests, net	89	63
Other	410	878
Total Other Assets	2,610	3,096
Total Assets	145,942	145,769
Current Liabilities:
Accounts payable and accrued expenses	8,630	9,271
Accrued compensation	2,579	1,808
Due to franchisees	4,546	4,977
Current portion of long term debt	1,310	1,295
Operating lease liabilities, current	2,413	2,385
Deferred revenue	4,852	2,635
Total Current Liabilities	24,330	22,371
Long Term Debt, Net of Current Portion	21,506	21,833
Operating lease liabilities, non-current	25,240	25,850
Deferred tax liabilities	686	801
Total Liabilities	71,762	70,855
COMMITMENTS AND CONTINGENCIES
Stockholders’ equity:
Common stock, $.10 par value, 5,000,000 shares authorized; 4,197,642 shares issued; 1,858,647 shares outstanding;	420	420
Capital in excess of par value	6,240	6,240
Retained earnings	58,356	58,247
Accumulated other comprehensive income	57	395
Treasury stock, at cost, 2,338,995 shares	(6,077)	(6,077)
Total Flanigan’s Enterprises, Inc. stockholders’ equity	58,996	59,225
Noncontrolling interests	15,184	15,689
Total stockholders’ equity	74,180	74,914
Total liabilities and stockholders’ equity	$ 145,942	$ 145,769

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parentheticals) - $ / shares	Dec. 30, 2023	Sep. 30, 2023
Statement of Financial Position [Abstract]
Common stock, par value (in Dollars per share)	$ 0.10	$ 0.10
Common stock, shares authorized	5,000,000	5,000,000
Common stock, shares issued	4,197,642	4,197,642
Common stock, shares outstanding	1,858,647	1,858,647
Treasury stock, shares, at cost	2,338,995	2,338,995

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock	Capital in Excess of Par Value	AOCI	Retained Earnings	Treasury Stock	Noncontrolling Interests	Total
Balance at Oct. 01, 2022	$ 420	$ 6,240		$ 55,086	$ (6,077)	$ 17,671	$ 73,340
Balance (in Shares) at Oct. 01, 2022	4,197,642				2,338,995
Net income				624		250	874
Distributions to noncontrolling interests						(829)	(829)
Balance at Dec. 31, 2022	$ 420	6,240		55,710	$ (6,077)	17,092	73,385
Balance (in Shares) at Dec. 31, 2022	4,197,642				2,338,995
Balance at Sep. 30, 2023							74,914
Net income							594
Other comprehensive (loss)							(338)
Balance at Dec. 30, 2023	$ 420	6,240	57	58,356	$ (6,077)	15,184	74,180
Balance (in Shares) at Dec. 30, 2023	4,197,642				2,338,995
Balance at Oct. 01, 2023	$ 420	6,240	395	58,247	$ (6,077)	15,689	74,914
Balance (in Shares) at Oct. 01, 2023	4,197,642				2,338,995
Net income				109		485	594
Other comprehensive (loss)			(338)				(338)
Distributions to noncontrolling interests						(990)	(990)
Balance at Dec. 30, 2023	$ 420	$ 6,240	$ 57	$ 58,356	$ (6,077)	$ 15,184	$ 74,180
Balance (in Shares) at Dec. 30, 2023	4,197,642				2,338,995

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Dec. 30, 2023	Dec. 31, 2022
Cash Flows from Operating Activities:
Net income	$ 594	$ 874
Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities:
Depreciation and amortization	981	815
Amortization of leasehold interests	5	6
Amortization of operating lease right-of-use assets	677	610
Loss on abandonment of property and equipment	1	7
Amortization of deferred loan costs	9	10
(Income) loss from unconsolidated limited partnership	(5)	3
(Increase) decrease in:
Other receivables	50	(183)
Prepaid income taxes	(18)	(63)
Inventories	(479)	(75)
Prepaid expenses	860	845
Other assets	15	40
Increase (decrease) in:
Accounts payable and accrued expenses	(444)	1,554
Operating lease liabilities	(582)	(547)
Due to franchisees	(431)	200
Deferred revenue	2,217	1,783
Net cash and cash equivalents provided by operating activities	3,450	5,879
Cash Flows from Investing Activities:
Purchase of property and equipment	(660)	(982)
Purchase of construction in progress	(29)	(452)
Deposits on property and equipment	(71)	(1,262)
Purchase of leaseholds	(31)
Proceeds from sale of property and equipment	9	8
Distributions from unconsolidated limited partnership	8	8
Net cash and cash equivalents used in investing activities	(774)	(2,680)
Cash Flows from Financing Activities:
Payments on long-term debt	(321)	(1,365)
Distributions to limited partnerships’ noncontrolling interests	(990)	(829)
Net cash and cash equivalents used in financing activities	(1,311)	(2,194)
Net Increase in Cash and Cash Equivalents	1,365	1,005
Cash and Cash Equivalents - Beginning of Period	25,532	42,138
Cash and Cash Equivalents - End of Period	26,897	43,143
Supplemental Disclosure for Cash Flow Information:
Interest	262	275
Income taxes		126
Supplemental Disclosure of Non-Cash Investing and Financing Activities:
Decrease in fair value of interest rate swap	453
Purchase deposits capitalized to property and equipment	115	28
Purchase deposits transferred to construction in progress		37
Construction in progress transferred to property and equipment	379	2,598
Construction in progress in accounts payable and accrued expenses	$ 574

BASIS OF PRESENTATION

3 Months Ended

Dec. 30, 2023

Basis of Presentation [Abstract]

BASIS OF PRESENTATION

(1) BASIS OF PRESENTATION:

EARNINGS PER SHARE

3 Months Ended

Dec. 30, 2023

Earnings Per Share [Abstract]

EARNINGS PER SHARE

(2) EARNINGS PER SHARE:

RECENTLY ADOPTED AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

3 Months Ended

Dec. 30, 2023

Recently Adopted And Recently Issued Accounting Pronouncements [Abstract]

RECENTLY ADOPTED AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

(3) RECENTLY ADOPTED AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS:

Adopted

Recently Issued

There are no other recently issued accounting pronouncements that we have not yet adopted that we believe may have a material effect on our condensed consolidated financial statements.

INCOME TAXES

3 Months Ended

Dec. 30, 2023

Income Tax [Abstract]

INCOME TAXES

(4) INCOME TAXES:

PURCHASE OF LEASEHOLD / SUB-LEASEHOLD INTERESTS

3 Months Ended

Dec. 30, 2023

Purchase of LeaseHold / Sub-Leasehold Interests [Abstract]

PURCHASE OF LEASEHOLD / SUB-LEASEHOLD INTERESTS

(5) PURCHASE OF LEASEHOLD / SUB-LEASEHOLD INTERESTS:

DEBT

3 Months Ended

Dec. 30, 2023

Debt [Abstract]

DEBT

(6) DEBT:

INSURANCE PREMIUMS

3 Months Ended

Dec. 30, 2023

Insurance Premiums [Abstract]

INSURANCE PREMIUMS

(7) INSURANCE PREMIUMS:

(iii) For the policy year beginning December 30, 2023, our automobile insurance is a one (1) year policy. The one (1) year automobile insurance premium is in the amount of $211,000;

(iv) For the policy year beginning December 30, 2023, our property insurance is a one (1) year policy. The one (1) year property insurance premium is in the amount of $1,416,000;

(v) For the policy year beginning December 30, 2023, our excess liability insurance is a one (1) year policy. The one (1) year excess liability insurance premium is in the amount of $764,000;

(vii) For the policy year beginning December 30, 2023, our terrorism insurance is a one (1) year policy. The one (1) year terrorism insurance premium is in the amount of $19,000.

We paid the $3,920,000 annual premium amounts on January 4, 2024, which includes coverage for our franchises which are not included in our consolidated financial statements.

COMMITMENTS AND CONTINGENCIES

3 Months Ended

Dec. 30, 2023

Commitments and Contingencies [Abstract]

COMMITMENTS AND CONTINGENCIES

(8) COMMITMENTS AND CONTINGENCIES:

Construction Contract

2505 N. University Drive, Hollywood, Florida (Store #19 – “Flanigan’s”)

Leases

Following adoption of ASC 842 during our fiscal year ended October 3, 2020, common area maintenance and property taxes are not considered to be lease components.

The components of lease expense are as follows:

	(in thousands)
	13 Weeks		13 Weeks
	Ended December 30, 2023		Ended December 31, 2022
Operating Lease Expense, which is included in occupancy costs	$	1,000	$	956

	(in thousands)
Classification on the Condensed Consolidated Balance Sheets	December 30, 2023		September 30, 2023

Assets
Operating lease assets	$	26,310	$	26,987

Liabilities
Operating lease current liabilities	$	2,413	$	2,385
Operating lease non-current liabilities	$	25,240	$	25,850

Weighted Average Remaining Lease Term:
Operating leases		10.08		9.86

Weighted Average Discount:
Operating leases		4.75%		4.75%

The following table outlines the minimum future lease payments for the next five years and thereafter:

	(in thousands)
For fiscal year	Operating
2024 (nine (9) months)	$	2,710
2025		3,598
2026		3,432
2027		3,335
2028		3,346
Thereafter		21,808

Total lease payments (undiscounted cash flows)		38,229
Less imputed interest		(10,576	)
Total operating lease liabilities	$	27,653

Litigation

CORONAVIRUS PANDEMIC

3 Months Ended

Dec. 30, 2023

Coronavirus Pandemic [Abstract]

CORONAVIRUS PANDEMIC

(9) CORONAVIRUS PANDEMIC:

BUSINESS SEGMENTS

3 Months Ended

Dec. 30, 2023

Business Segments [Abstract]

BUSINESS SEGMENTS

(10) BUSINESS SEGMENTS:

	(in thousands)

	Thirteen Weeks			Thirteen Weeks
	Ending			Ending
	December 30, 2023			December 31, 2022

Operating Revenues:
Restaurants	$	33,818		$	31,755
Package stores		10,602			9,403
Other revenues		720			703
Total operating revenues	$	45,140		$	41,861

Income from Operations Reconciled to Income After Income Taxes and Net Income Attributable to Noncontrolling Interests
Restaurants	$	1,171		$	779
Package stores		632			799
		1,803			1,578
Corporate expenses, net of other revenues		(1,010	)		(381	)
Income from Operations		793			1,197
Interest expense		(262	)		(275	)
Interest and Other income		46			15
Loss on disposal of property and equipment		(1	)		—
Income before benefit (provision) for Income Taxes	$	576		$	937
Benefit (provision) for Income Taxes		18			(63	)
Net Income		594			874
Net Income Attributable to Noncontrolling Interests		(485	)		(250	)
Net Income Attributable to Flanigan’s Enterprises, Inc. Stockholders	$	109		$	624

Depreciation and Amortization:
Restaurants	$	728		$	626
Package stores		127			90
		855			716
Corporate		131			105
Total Depreciation and Amortization	$	986		$	821

Capital Expenditures:
Restaurants	$	1,144		$	947
Package stores		47			350
		1,191			1,297
Corporate		187			202
Total Capital Expenditures	$	1,378		$	1,499

	(in thousands)
	December 30,		September 30,
	2023		2023
Identifiable Assets:
Restaurants	$	75,741	$	76,575
Package store		23,947		23,714
		99,688		100,289
Corporate		46,254		45,480
Consolidated Totals	$	145,942	$	145,769

SUBSEQUENT EVENTS

3 Months Ended

Dec. 30, 2023

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

(11) SUBSEQUENT EVENTS:

Subsequent events have been evaluated through the date these unaudited condensed consolidated financial statements were issued and no further events required adjustments or disclosure.

COMMITMENTS AND CONTINGENCIES (Tables)

3 Months Ended

Dec. 30, 2023

Commitments and Contingencies [Abstract]

Schedule of Components of Lease Expense

The components of lease expense are as follows:

	(in thousands)
	13 Weeks		13 Weeks
	Ended December 30, 2023		Ended December 31, 2022
Operating Lease Expense, which is included in occupancy costs	$	1,000	$	956

Schedule of Supplemental Balance Sheet Information Related to Leases

	(in thousands)
Classification on the Condensed Consolidated Balance Sheets	December 30, 2023		September 30, 2023

Assets
Operating lease assets	$	26,310	$	26,987

Liabilities
Operating lease current liabilities	$	2,413	$	2,385
Operating lease non-current liabilities	$	25,240	$	25,850

Weighted Average Remaining Lease Term:
Operating leases		10.08		9.86

Weighted Average Discount:
Operating leases		4.75%		4.75%

Schedule of Minimum Future Lease Payments

The following table outlines the minimum future lease payments for the next five years and thereafter:

	(in thousands)
For fiscal year	Operating
2024 (nine (9) months)	$	2,710
2025		3,598
2026		3,432
2027		3,335
2028		3,346
Thereafter		21,808

Total lease payments (undiscounted cash flows)		38,229
Less imputed interest		(10,576	)
Total operating lease liabilities	$	27,653

BUSINESS SEGMENTS (Tables)

3 Months Ended

Dec. 30, 2023

Business Segments [Abstract]

Schedule of Business Segments

Information concerning the revenues and operating income for the thirteen weeks ended December 30, 2023 and December 31, 2022, and identifiable assets for the two reportable segments in which we operate, are shown in the following tables.

	(in thousands)

	Thirteen Weeks			Thirteen Weeks
	Ending			Ending
	December 30, 2023			December 31, 2022

Operating Revenues:
Restaurants	$	33,818		$	31,755
Package stores		10,602			9,403
Other revenues		720			703
Total operating revenues	$	45,140		$	41,861

Income from Operations Reconciled to Income After Income Taxes and Net Income Attributable to Noncontrolling Interests
Restaurants	$	1,171		$	779
Package stores		632			799
		1,803			1,578
Corporate expenses, net of other revenues		(1,010	)		(381	)
Income from Operations		793			1,197
Interest expense		(262	)		(275	)
Interest and Other income		46			15
Loss on disposal of property and equipment		(1	)		—
Income before benefit (provision) for Income Taxes	$	576		$	937
Benefit (provision) for Income Taxes		18			(63	)
Net Income		594			874
Net Income Attributable to Noncontrolling Interests		(485	)		(250	)
Net Income Attributable to Flanigan’s Enterprises, Inc. Stockholders	$	109		$	624

Depreciation and Amortization:
Restaurants	$	728		$	626
Package stores		127			90
		855			716
Corporate		131			105
Total Depreciation and Amortization	$	986		$	821

Capital Expenditures:
Restaurants	$	1,144		$	947
Package stores		47			350
		1,191			1,297
Corporate		187			202
Total Capital Expenditures	$	1,378		$	1,499

	(in thousands)
	December 30,		September 30,
	2023		2023
Identifiable Assets:
Restaurants	$	75,741	$	76,575
Package store		23,947		23,714
		99,688		100,289
Corporate		46,254		45,480
Consolidated Totals	$	145,942	$	145,769

INCOME TAXES (Details)	3 Months Ended
INCOME TAXES (Details)	Dec. 30, 2023
Income Tax [Abstract]
Statutory federal rate	21.00%

PURCHASE OF LEASEHOLD / SUB-LEASEHOLD INTERESTS (Details)	3 Months Ended
	Dec. 30, 2023 USD ($)
PURCHASE OF LEASEHOLD / SUB-LEASEHOLD INTERESTS (Details) [Line Items]
Sublease agreement rate	56.00%
Operating lease payment (in Dollars)	$ 31,000
Sublease Agreement [Member]
PURCHASE OF LEASEHOLD / SUB-LEASEHOLD INTERESTS (Details) [Line Items]
Sublease agreement rate	44.00%
Biscayne Boulevard [Member]
PURCHASE OF LEASEHOLD / SUB-LEASEHOLD INTERESTS (Details) [Line Items]
Sublease agreement rate	4.00%

DEBT (Details)	3 Months Ended
DEBT (Details)	Dec. 30, 2023
Maximum [Member]
Debt [Line Items]
Calculated ratio	1.55
Minimum [Member]
Debt [Line Items]
Calculated ratio	1
Post-Distribution/Fixed Charge Covenant [Member] \| Maximum [Member]
Debt [Line Items]
Calculated ratio	1.15
Post-Distribution/Fixed Charge Covenant [Member] \| Minimum [Member]
Debt [Line Items]
Calculated ratio	1

INSURANCE PREMIUMS (Details) - USD ($) $ in Thousands	Dec. 30, 2023	Jan. 04, 2024
INSURANCE PREMIUMS (Details) [Line Items]
Annual Insurance Premium Cover Franchises	$ 3,920
Limited partnerships	10,000
Minimum [Member]
INSURANCE PREMIUMS (Details) [Line Items]
Insured retention increase amount	10,000
Maximum [Member]
INSURANCE PREMIUMS (Details) [Line Items]
Insured retention increase amount	50,000
Insurance Premiums [Member]
INSURANCE PREMIUMS (Details) [Line Items]
Annual Insurance Premium Cover Franchises	850,000
General Liability Insurance Excluding Limited Partnership Premium [Member]
INSURANCE PREMIUMS (Details) [Line Items]
Amount of premium payable	455,000
Automobile Insurance Premium [Member]
INSURANCE PREMIUMS (Details) [Line Items]
Amount of premium payable	211,000
Property Insurance Premium [Member]
INSURANCE PREMIUMS (Details) [Line Items]
Amount of premium payable	1,416,000
Excess Liability Insurance Premium [Member]
INSURANCE PREMIUMS (Details) [Line Items]
Amount of premium payable	764,000
Terrorism Insurance Premium [Member]
INSURANCE PREMIUMS (Details) [Line Items]
Amount of premium payable	19,000
Subsequent Event [Member] \| Insurance Premiums [Member] \| Unaffiliated Third Party [Member]
INSURANCE PREMIUMS (Details) [Line Items]
Amount of premium payable		$ 3,920,000
Insurance Premiums [Member] \| General Liability Insurance Excluding Limited Partnership Premium [Member]
INSURANCE PREMIUMS (Details) [Line Items]
Amount of premium payable	$ 1,055,000

COMMITMENTS AND CONTINGENCIES (Details) - USD ($)	Dec. 30, 2023	Oct. 02, 2018
Loss Contingencies [Line Items]
Total contract price	$ 2,625,000
N. University Drive, Hollywood, Florida (Store #19 – “Flanigan’s”) [Member]
Loss Contingencies [Line Items]
Total contract price	$ 350,000	$ 2,515,000
N. University Drive, Hollywood, Florida (Store #19 – “Flanigan’s”) [Member] \| Minimum [Member]
Loss Contingencies [Line Items]
Total contract price		1,252,000
N. University Drive, Hollywood, Florida (Store #19 – “Flanigan’s”) [Member] \| Maximum [Member]
Loss Contingencies [Line Items]
Total contract price		$ 3,767,000
South Florida from unrelated third parties [Member]
Loss Contingencies [Line Items]
Operating lease remaining lease term	15 years
South Florida from unrelated third parties [Member] \| Minimum [Member]
Loss Contingencies [Line Items]
Operating lease remaining lease term	49 years
South Florida from unrelated third parties [Member] \| Maximum [Member]
Loss Contingencies [Line Items]
Operating lease remaining lease term	30 years

COMMITMENTS AND CONTINGENCIES (Details) - Schedule of Components of Lease Expense - USD ($)	3 Months Ended
	Dec. 30, 2023	Dec. 31, 2022
Leases [Abstract]
Operating Lease Expense, which is included in occupancy costs	$ 1,000	$ 956

COMMITMENTS AND CONTINGENCIES (Details) - Schedule of Supplemental Balance Sheet Information Related to Leases - USD ($) $ in Thousands	Dec. 30, 2023	Sep. 30, 2023
Assets
Operating lease assets	$ 26,310	$ 26,987
Liabilities
Operating lease current liabilities	2,413	2,385
Operating lease non-current liabilities	$ 25,240	$ 25,850
Weighted Average Remaining Lease Term:
Operating leases	10 years 29 days	9 years 10 months 9 days
Weighted Average Discount:
Operating leases	4.75%	4.75%

COMMITMENTS AND CONTINGENCIES (Details) - Schedule of Minimum Future Lease Payments $ in Thousands	Dec. 30, 2023 USD ($)
Schedule of Minimum Future Lease Payments [Abstract]
2024 (nine (9) months)	$ 2,710
2025	3,598
2026	3,432
2027	3,335
2028	3,346
Thereafter	21,808
Total lease payments (undiscounted cash flows)	38,229
Less imputed interest	(10,576)
Total operating lease liabilities	$ 27,653

BUSINESS SEGMENTS (Details)	3 Months Ended
BUSINESS SEGMENTS (Details)	Dec. 30, 2023	Dec. 31, 2022
BUSINESS SEGMENTS (Details) [Line Items]
Reportable segments	2	2
Package Stores and Restaurants [Member]
BUSINESS SEGMENTS (Details) [Line Items]
Reportable segments	2

BUSINESS SEGMENTS (Details) - Schedule of Business Segments - USD ($) $ in Thousands	3 Months Ended				9 Months Ended
	Dec. 30, 2023	Dec. 30, 2023	Dec. 31, 2022	Dec. 31, 2022	Dec. 30, 2023	Dec. 31, 2022	Sep. 30, 2023
Operating Revenues:
Total operating revenues	$ 45,140			$ 41,861
Income from Operations Reconciled to Income After Income Taxes and Net Income Attributable to Noncontrolling Interests
Income from Operations	793			1,197
Interest expense	(262)			(275)
Income before benefit (provision) for Income Taxes	576			937	$ 576	$ 937
Benefit (provision) for Income Taxes	(18)			63	18	(63)
Net Income	594	$ 594	$ 874	874	594	874
Net Income Loss (Income) Attributable to Noncontrolling Interests	(485)			(250)	(485)	(250)
Net Income Attributable to Flanigan’s Enterprises, Inc. Stockholders	109			624	109	624
Depreciation and Amortization:
Corporate	981			$ 815	986	821
Capital Expenditures:
Total Capital Expenditures					1,378	1,499
Identifiable Assets:
Assets	145,942	145,942			145,942		$ 145,769
Operating Segments [Member]
Operating Revenues:
Total operating revenues					45,140	41,861
Income from Operations Reconciled to Income After Income Taxes and Net Income Attributable to Noncontrolling Interests
Income from Operations					1,803	1,578
Depreciation and Amortization:
Corporate					855	716
Capital Expenditures:
Total Capital Expenditures					1,191	1,297
Identifiable Assets:
Assets	99,688	99,688			99,688		100,289
Restaurants [Member] \| Operating Segments [Member]
Operating Revenues:
Total operating revenues					33,818	31,755
Income from Operations Reconciled to Income After Income Taxes and Net Income Attributable to Noncontrolling Interests
Income from Operations					1,171	779
Depreciation and Amortization:
Corporate					728	626
Capital Expenditures:
Total Capital Expenditures					1,144	947
Identifiable Assets:
Assets	75,741	75,741			75,741		76,575
Package stores [Member]
Capital Expenditures:
Total Capital Expenditures					47	350
Package stores [Member] \| Operating Segments [Member]
Operating Revenues:
Total operating revenues					10,602	9,403
Income from Operations Reconciled to Income After Income Taxes and Net Income Attributable to Noncontrolling Interests
Income from Operations					632	799
Depreciation and Amortization:
Corporate					127	90
Identifiable Assets:
Assets	23,947	23,947			23,947		23,714
Corporate Expenses [Member]
Income from Operations Reconciled to Income After Income Taxes and Net Income Attributable to Noncontrolling Interests
Income from Operations					793	1,197
Corporate expenses, net of other revenues					(1,010)	(381)
Interest expense					(262)	(275)
Interest and Other income					46	15
Loss on disposal of property and equipment					(1)
Identifiable Assets:
Assets	$ 46,254	$ 46,254			46,254		$ 45,480
Corporate [Member]
Depreciation and Amortization:
Corporate					131	105
Capital Expenditures:
Total Capital Expenditures					187	202
Other Revenues [Member] \| Operating Segments [Member]
Operating Revenues:
Total operating revenues					$ 720	$ 703

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