BDL 10-K & 10-Q changes, risk factors and insider trading

Risks Related to Our Business and Industry

Any inability to compete successfully successfully with the other restaurants and/or stores in our markets will prevent us from increasing or sustaining our revenues and profitability and and will result in a material adverse effect on our business, financial condition, results of operations orand cash flows. We may also need to to modify or refine elements of our business to evolve our concepts in order to compete with popular new restaurant formats or store concepts concepts that may develop in the future. There can be no assurance that we will be successful in implementing these modifications or that these modifications will not reduce our profitability.

Changes in customer preferencestastes forand casualpreferences, spending dining stylespatterns and demographic trends could cause sales to decline and adversely affect financial performance.

Many of our corporate systems and processes and corporate support for our restaurant and package liquor store operations are centralized at one location. We have disaster recovery procedures and business continuity plans in place to address crisis-level events, including hurricanes and other natural disasters and back up and off-site locations for recovery of electronic and other forms of data and information. However, if we are unable to fully implement our disaster recovery plans, we may experience delays in recovery of data, inability to perform perform vital corporate functions, tardiness in required reporting and compliance, failures to adequately support field operations and other breakdowns in normal communication and operating procedures that could have a material adverse effect on our financial condition, results of operation and exposure to administrative and other legal claims. In addition, these threats are constantly evolving, which increases the difficulty of accurately and timely predicting, planning for and protecting against the threat. As a result, our disaster recovery procedures and business continuity plans security may not adequately address all threats we face or protect us from loss.

Our sale of alcoholic beverages beverages subjects us to “dram shop” statutes, which allow an injured person to recover damages from an establishment that served alcoholic beverages to an intoxicated person. If we receive a judgment substantially in excess of our insurance coverage, or if we fail to maintain our insurance coverage, our business, financial condition, operating results or cash flows could be materially and adversely affected. There are currently no “dram shop” claims pending against us. See “Item 1. Business Business—- Government Regulation” for a discussion of the regulations with which we must comply.

We use a variety of applications applications and systems to manage the flow of information securely within each of our restaurants and within our centralized corporate infrastructure. The services available within our systems and applications include restaurant and store operations, supply chain, inventory, scheduling, training, human capital management, financial tools and data protection services. The restaurant and store structure is based primarily on a point-of-sale system that operates locally and is integrated with other functions necessary to operations. It records sales transactions, receives out of store orders and authorizes, batches and transmits credit card transactions. The system also allows employees to enter time clock information and to produce a variety of management reports. Select information that is captured from this system at each restaurant or store is collected in the central corporate infrastructure, which enables management to continually monitor operating results. Our ability to manage efficiently and effectively manage our business depends significantly on the reliability and capacity of these and other systems and our operations depend substantially on the availability of our point-of-sale system and related networks and applications. These systems may be vulnerable to attacks or outages from security breaches, viruses and other disruptive problems, as well as from physical theft, fire, power loss, telecommunications failure or other catastrophic events. Any failure of these systems to operate effectively, whether from security breaches, maintenance problems, upgrades or transitions to new platforms, or other factors could result in interruptions to to or delays in our restaurant or other operations, adversely impacting the restaurant or store experience for our customers or negatively negatively impacting our ability to manage our business. If our information technology systems fail and our redundant systems or disaster recovery plans are not adequate to address such failures, or if our business interruption insurance does not sufficiently compensate us for any losses that we may incur, our revenues and profits could be reduced and the reputation of our brand and our business could be materially adversely affected. In addition, remediation of any problems with our systems could result in significant, unplanned expenses.

We are subject to various federal and state laws governing our relationship with and other matters pertaining to our employees, including wage and hour laws, requirements to provide meal and rest periods or other benefits, healthcare, family leave mandates, requirements regarding working conditions and accommodations to certain employees, citizenship or work authorization and related requirements, insurance and workers’ compensation rules and anti-discrimination laws. Complying with these rules subjects us to substantial expense and can be cumbersome and can also expose us to liabilities from claims for non-compliance. For example, historically, lawsuits have been filed against us alleging violations of federal and state laws regarding employee wages and payment of overtime. We could suffer losses from and we incur legal costs to defend these and similar cases and the amount of such losses or costs could be significant. In addition, several states and localities in which we operate and the federal government have from time to time enacted minimum wage increases, paid sick leave and mandatory vacation accruals and similar requirements and these changes could increase our labor costs. Changes in U.S. healthcare laws could also adversely impact us if they result in significant new welfare and benefit costs or increased compliance expenses.

We could be party to litigation that could adversely affect us by distracting management, increasing our expenses or subjecting us to material money damages and other remedies. We could become subject to numerous claims alleging violations of federal and state laws regarding workplace and employment matters, including wages, work hours, overtime, vacation and family leave, discrimination, wrongful termination and similar matters, and we could become subject to class action or other lawsuits related to these or different matters. Our customers could file complaints or lawsuits against us alleging that we are responsible for some illness or injury they suffered at or after a visit to our restaurants or that we have problems with food quality, operations or our food related disclosure or advertising practices. practices. The restaurant industry has been subject to a growing number of claims based on the nutritional content of food products sold and disclosure and advertising practices.

The occurrence or threat of extraordinary events, such as active shooter or future terrorist attacksattacks, military and governmental responses, and the protest of future wars, may result in negative changes to economic conditions likely resulting in decreased consumer spending. Additionally, decreases in consumer discretionary spending may impact the frequency with which our customers choose to dine out at restaurants or the amount they spend on meals while dining out at restaurants, thereby adversely affecting our sales and results of operations. A decrease in consumer discretionary spending may also adversely affect our ability to achieve the benefit of planned menu price increases to help preserve our operating margins.

Revenues. Total Total revenue for our fiscal year 2025 increased $18,032,000 or 9.63% to $205,248,000 from $187,216,000 for our fiscal year 2024 increaseddue primarily $13,925,000 or 7.98% to $188,321,000 from $174,396,000 for our fiscal year 2023 due primarily to increased package liquor store and restaurant sales, increased menu prices,prices and revenue generated from the opening of our corporate ownedCompany-owned restaurant in Hollywood, Florida (Store #19R) in March 2024, the operation of our limited partnership owned restaurant in Miramar, Florida (Store #25) and our package liquor stores in Miramar, Florida (Store #24) and Hollywood, Florida (Store #19P) for our entire fiscal year 2024 2025 as opposed to a part of our fiscal year 2023. 2024. Effective AugustFebruary 25,23, 2024,2025, we increased our menu prices for our bar offerings to target an increase to our bar revenues of approximately 5.63%0.84% annually to offset higher food and liquor costs.annually. Effective MarchDecember 26,4, 20232024, we increased our menu prices for our bar offerings to target an increase to our bar revenues of approximately 4.90% annually and effective November 17, 2024 we increased our menu prices for our food offerings to target an increase to our food revenues of approximately 2.06%4.14% andannually. effectiveEffective MarchAugust 20,25, 20232024, we increased menu menu prices for our bar offerings to target an increase to our bar revenues of approximately 5.65%5.63% annually,annually to offset higher food and liquor 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 $114,795,000$124,501,000 for our fiscal year 20242025 as compared to $107,238,000$114,795,000 for our fiscal year 2023.2024. The increase in restaurant food sales is attributable to the Recent Price Increases and food sales generated from theour opening of corporate ownedCompany-owned restaurant in Hollywood, Florida (Store #19R) during the second quarter offor our fiscal year 2024 and the operation of our limited partnership owned restaurant in Miramar, Florida (Store #25) for our entire fiscal year 2024 2025 as opposed to a part of our fiscal year 2023.2024. Comparable weekly restaurant food sales for restaurants open for all of our fiscal years 2024 2025 and 2023,2024, which consists of ten restaurants owned by us (excluding our Hollywood, Florida location (Store #19R which opened for business during the second quarter of our fiscal year 2024) and ten restaurants owned by affiliated limited partnerships was $2,245,000 and $2,122,000 for our fiscal years 2025 and 2024 respectively, an increase of 5.80%. Comparable weekly restaurant food sales for Company-owned restaurants only (excluding our Hollywood, Florida location Store #19R which opened for business during the second quarter of our fiscal year 2024) was $997,000 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 $1,987,000 and $1,967,000$938,000 for our fiscal years 20242025 and 20232024, respectively, an increase of 1.02%.6.29%. Comparable weekly restaurant food sales for Company-owned restaurants only (excluding our Hollywood, Florida location (Store #19R) which opened for business during the second quarter of our fiscal year 2024) was $938,000 and $923,000 for our fiscal years 2024 and 2023, respectively, an increase of 1.63%. Comparable weekly restaurant food sales for affiliated limited partnership owned restaurants only, (excluding our Miramar, Florida location (Store #25) which opened for business during the third quarter of our fiscal year 2023),only was $1,049,000$1,248,000 and $1,044,000$1,184,000 for our fiscal years 20242025 and 20232024 respectively, an increase of 0.48%.5.41%. We expect that restaurant food sales, including non-alcoholic beverages, for our fiscal year 20252026 will increase due to increased restaurant traffic and the operation of our Company-owned Store #19R for our entire fiscal year 2025.traffic.

Restaurant Bar Sales. Restaurant revenue generated from the sale of alcoholic beverages at restaurants totaled $31,764,000 for our fiscal year 2025 as compared to $30,010,000 for our fiscal year 2024 as compared to $29,000,000 for our fiscal year 2023.2024. The increase in restaurant bar sales is attributable to the Recent Price Increases and foodbar sales generated from theour opening of corporate ownedCompany-owned restaurant in Hollywood, Florida (Store #19R) during the second quarter of our fiscal year 2024 and the operation of our limited partnership owned restaurant in Miramar, Florida (Store #25) for our entire fiscal year 20242025 as opposed to a part of our fiscal year 2023.2024. Comparable weekly restaurant bar sales for restaurants open for all of our fiscal years 2024 2025 and 20232024 respectively, which consists of ten restaurants owned by us (excluding our Hollywood, Florida location (Store #19R) which opened for business during the second quarter of our fiscal year 2024) and ten restaurants owned by affiliated limited partnerships was $583,000 for our fiscal year 2025 and $562,000 for our fiscal year 2024, an increase of 3.74%. Comparable weekly restaurant bar sales for Company-owned restaurants only (excluding our Hollywood, Florida location Store #19R which opened for business during the second quarter of our fiscal year 2024) was $244,000 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 $526,000 for our fiscal year 2024 and $539,000$234,000 for our fiscal yearyears 2023,2025 aand decrease2024 respectively, an increase of 2.41%.4.27%. Comparable weekly restaurant bar sales for Company-owned restaurants only (excluding our Hollywood, Florida location (Store #19R) which opened for business during the second quarter of our fiscal year 2024) was $234,000 and $231,000 for our fiscal years 2024 and 2023 respectively, an increase of 1.30%. Comparable weekly restaurant bar sales for affiliated limited partnership owned restaurants only (excluding our Miramar, Florida location (Store #25) which opened for business during the third quarter of our fiscal year 2023) was $292,000$339,000 and $307,000$328,000 for our fiscal years 20242025 and 20232024 respectively, an increase a decrease of 4.89%.3.35%. We expect that restaurant bar sales for our fiscal year 20252026 will increase due to theincreased operationrestaurant of our Company-owned Store #19R for our entire fiscal year 2025.traffic.

Package Liquor Store Sales. Sales. Revenue generated from sales of liquor and related items at package liquor stores totaled $46,988,000 for our fiscal year 2025 as compared to $40,497,000 for our fiscal year 2024 as compared to $35,187,000 for our fiscal year 2023,2024, an increase of $5,310,000.$6,491,000. 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), for our entire fiscal year 2024 as opposed to a part of our fiscal year 2023.traffic. The weekly average of same store package liquor store sales, which includes nineeleven (911) Company-owned package liquor stores stores,was (excluding Store #19P which reopened during the first quarter of fiscal year 2023,$904,000 and Store #24 which opened for business during the second quarter of our fiscal year 2023), was $674,000 and $631,000$779,000 for our fiscal years 20242025 and 20232024 respectively, an increase of 6.81%.16.05%. We expect that package liquor store sales for our fiscal year 20252026 will increase due to increased package liquor store traffic.

Costs and Expenses. Costs and expenses (consisting of cost of merchandise sold, payroll and related costs, operating expenses, occupancy costs, selling, general general and administrative expenses and depreciation and amortization), for our fiscal year 20242025 increased $14,553,000$15,128,000 or 8.70%8.34% to $181,925,000$196,503,000 from $167,372,000$181,375,000 for our fiscal year 2023.2024. The increase was primarily due to increased payroll, increased consultant fees to improve our accounting process, an expected general increase in food costs costs,and overall expenses, as well as costs and expenses incurred from the opening of our Company-owned restaurant in Hollywood Florida (Store #19R) in March 2024, the operation of our limited partnership owned restaurant in Miramar, Florida (Store #25), and our package liquor stores in Miramar, Florida (Store #24) and Hollywood, Florida (Store #19P), for our entire fiscal year 20242025 as opposed to a part of our fiscal year 2023,2024, 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 2025.2026. Operating costs and expenses increased decreased as a percentage of total revenue to approximately 96.60%95.74% in our fiscal year 20242025 from 95.97%96.88% in our fiscal year 2023.2024.

Restaurant Food and Bar Sales. Gross profit for food and bar sales for our fiscal year 20242025 increased to $94,943,000$104,091,000 from $90,750,000$94,943,000 for our fiscal year 2023.2024. Gross profit margin for the restaurant food and bar sales decreasedincreased during our fiscal year 20242025 when compared to our fiscal year 20232024 due to higher food costs partially offset by, among other things, the Recent Price Increases.Increases, partially offset by higher food costs. 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 65.57% for our fiscal year 2024 and 66.61% for our fiscal year 2023.2025 and 65.57% for our fiscal year 2024.

Package Store Sales. Gross profit for package store sales for our fiscal year 20242025 increased to $10,369,000$11,803,000 from $9,377,000$10,369,000 for our fiscal year 2023.2024. Our gross gross profit margin, (calculated as gross profit reflected as a percentage of package liquor store sales), for package store sales was 25.60% for our fiscal year 2024 and 26.65%25.12% for our fiscal year 2023.2025 and 26.60% for our fiscal year 2024. We anticipate that the gross profit margin for package liquor store merchandise merchandise will decrease for our fiscal year 20252026 due to higher costs and a reduction in pricing of certain package store merchandise to beremain more competitive.

Payroll and Related Costs. Payroll and related costs for our fiscal year 20242025 increased $2,742,000$4,352,000 or 4.84%7.33% to $59,349,000$63,701,000 from $56,607,000$59,349,000 for our fiscal year 2023.2024. Payroll and related costs for our fiscal year 20242025 wereare higher due primarily to the openingoperation of our corporate ownedCompany-owned restaurant in Hollywood, Florida (Store #19R) in March 2024, the operation of our limited partnership owned restaurant in Miramar, Florida (Store #25) and our package liquor stores in Miramar, Florida (Store #24) and Hollywood, Florida (Store #19P) for our entirefull fiscal year 2024 2025 as opposed to a part of our fiscal year 20232024 and the increase to the Florida minimum wage. Payroll and related costs as a percentage of total revenue was 31.51%31.04% for our fiscal year 20242025 and 32.46%31.70% of total revenue for our fiscal year 2023.2024.

Operating Expenses. Operating expenses (including but not limited to utilities, insurance, cleaning, credit card fees, supplies, security, and other costs closely related to running restaurant and package operations) for our fiscal year 20242025 increased $1,234,000$2,737,000 or 5.22%11.08% to $24,892,000$27,438,000 from from $23,658,000$24,701,000 for our fiscal year 20232024 due primarily to the openingoperation of our corporate ownedCompany-owned restaurant in Hollywood, Florida (Store #19R) in March 2024, the operation of our limited partnership owned restaurant in Miramar, Florida (Store #25) and our package liquor stores in Miramar, Florida (Store #24) and Hollywood, Florida (Store #19P) for our entirefull fiscal year 20242025 as opposed to a part of our fiscal year 2023,2024, inflation and otherwise due to increases in expenses across all categories.

Occupancy Costs. Occupancy costs (consisting of percentage rent, common area maintenance, repairs, real property taxes, amortization of leasehold purchases and rent expense associated with operating lease liabilities under ASC 842) for our fiscal year 20242025 increased $520,000$116,000 or 6.87%1.50% to $8,086,000$7,870,000 from $7,566,000$7,754,000 for our fiscal year 2023. The increase in occupancy costs was primarily due to an increase in real property taxes.2024.

Selling, General and and Administrative Expenses. Selling, general and administrative expenses (consisting of general corporate expenses, including but but not limited to advertising, professional costs, clerical and administrative overhead) for our fiscal year 20242025 increased $658,000$150,000 or or 14.05%2.82% to $5,340,000$5,463,000 from $4,682,000$5,313,000 for our fiscal year 20232024 due primarily to increased consultant fees to improve our accounting processtelevision and otherwiseradio toadvertising increases in expenses across all categories.costs. Selling, general and administrative expenses increaseddecreased as a percentage of total revenue for our fiscal year 20242025 to 2.84%2.66% as compared to 2.68% 2.84% for our fiscal year 2023.2024.

Depreciation and Amortization. Depreciation and amortization expense for our fiscal year 20242025 increased $707,000$404,000 or 19.85%9.47% to $4,268,000$4,672,000 from $3,561,000$4,268,000 for our fiscal year 2023.2024. This increase is driven by the openingoperation of our corporate ownedCompany-owned restaurant in Hollywood, Florida (Store #19R) infor March 2024, the operation of our limited partnership owned restaurant in Miramar, Florida (Store #25) and our package liquor stores in Miramar, Florida (Store #24) and Hollywood, Florida (Store #19P) for our entirefull fiscal year 20242025 as opposed to a part of ourthe fiscal year 2023. 2024. Depreciation and amortization expenseremained increasedflat as a percentage of total revenue at 2.28% for each of our fiscal yearyears 20242025 toand 2.27% as compared to 2.04% for our fiscal year 2023.2024.

Income Taxes. Income tax for our fiscal year 20242025 was an expense of $286,000,$622,000, as compared to an expense of $649,000$286,000 for our fiscal year 2023.2024. Income taxes as a percentage of income before provision for income taxes for our fiscal year 20242025 is 5.12%7.2% as compared to 10.70%5.12% in our fiscal year 2023. 2024.

Net Income. Net income for our fiscal year 20242025 decreasedincreased $116,000$2,717,000 or 2.14%51.26% to $5,300,000$8,017,000 from $5,416,000$5,300,000 for our fiscal year 20232024 due primarily to the higher foodRecent costsPrice Increases and overallthe increasedoperation expenses,of includingour butCompany-owned notrestaurant limitedin to,Hollywood, increasedFlorida consultant(Store fees#19R) for our full fiscal year 2025 as opposed to improvepart of our accountingfiscal process. year 2024. As a percentage of total revenue, net income for our fiscal year 20242025 is 2.81%,3.91%, as compared to 3.11%2.83% for our fiscal year 2023.2024.

Net Income Attributable to Flanigan’s Enterprise, Inc.’s Stockholders. Net income attributable to stockholders for our fiscal year 20242025 decreasedincreased $643,000$1,677,000 or 16.08%49.97% to $3,356,000$5,033,000 from $3,999,000$3,356,000 for our fiscal year 20232024 due primarily to higherthe foodRecent costsPrice Increases and overallthe increased expenses,operation including but not limited to, increased consultant fees to improve our accounting process and a higher portion of our netCompany-owned incomerestaurant attributable toin noncontrollingHollywood, interestsFlorida (specificallyStore the operation of our Miramar location#19R) for our entirefull fiscal year 20242025 as opposed to apart part of our fiscal year 2023). 2024. As a percentage of revenue, net income attributable to stockholders for our fiscal year 20242025 is 1.78%,2.45%, as compared to 2.29%1.79% for our fiscal year 2023.2024.

As new limited partnership restaurants restaurants open, our income from operations will be adversely affected due to our obligation to advance pre-opening costs, including but not limited to pre-opening rent for the new limited partnership locations. During our fiscal year 20242025 we did not open any new limited partnership partnership restaurants, nor didhowever, we do have anyone in the development stage. During our fiscal year 2023, we opened one new limited partnership restaurant locationstage in Miramar,Cutler FloridaBay, as a “Flanigan’s”.Florida.

During the second quarter of our fiscal year, 2025, we increased our menu prices for our bar offerings (effective February 23, 2025) to target an increase to our bar revenues of approximately 0.84% annually to offset higher food and liquor costs and higher overall expenses. During the first quarter of our fiscal year 2025, we increased our menu prices for our bar offerings (effective December 4, 2024) to target an increase to our bar revenues of approximately 4.90% annually and we increased our menu prices for our food offerings (effective November 17, 2024) to target an increase to our food revenues of approximately 4.14% annually to offset higher food and liquor costs and higher overall expenses. During our fiscal year 2024, we increased menu prices for our bar offerings (effective August 25, 2024) to target an increase to our bar revenues of approximately 5.63% annually to offset higher food and liquor costs and higher overall expenses. 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 20, 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, increases we previously raised menu prices in the firstsecond quarter of our fiscal year 2022. Subsequent to the end of our fiscal year 2024, we increased our menu prices for our bar offerings (effective December 4, 2024) to target an increase to our bar revenues of approximately 4.90% annually and we increased our menu prices for our food offerings (effective November 17, 2024) to target an increase to our food revenues of approximately 4.14% annually to offset higher food and liquor costs and higher overall expenses.2023.

We fund our operations through cash from operations and borrowings from third parties. As of September 28,27, 2024,2025, we had cash and cash equivalents of approximately $21,402,000,$20,094,000, a decrease of $4,130,000$1,308,000 from our cash balance of $25,532,000$21,402,000 as of September 30,28, 2023.2024. The decrease is primarily due to theour completionpurchase of the constructionCutler ofBay our Store #19Rproperty ($2,106,000$2,200,000).

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

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 fiscal year 2025, we acquired property and equipment of $5,844,000, (of which $2.2 million was for the purchase of the Cutler Bay Property and $11,000 was purchase deposits transferred to property and equipment), including $566,000 for renovations to four (4) Company-owned location and $137,000 for renovations to one (1) limited partnership owned restaurant. During the fiscal year 2024, we acquired property and equipment and construction in progress of $6,047,000, (of which $289,000 was purchase deposits transferred to property and equipment, $715,000 was purchase deposits transferred to CIP, and $4,000 was property and equipment in accounts payable), including $528,000 for renovations to three (3) Company-owned restaurants and $135,000 for one (1) limited partnership owned restaurant. During the fiscal year 2023, we acquired property and equipment and construction in progress of $20,574,000, (including non-cash items which include $2,390,000 of purchase deposits transferred to property and equipment and $545,000 of purchase deposits transferred to construction in progress and $931,000 of construction in progress in accounts payable) including $367,000 for renovations to three (3) existing limited partnership owned restaurants and $378,000 for renovations to three (3) Company-owned restaurants.

ConstructionERP ContractsContract

In order to fix the cost and ensure adequate supply of baby back ribs for our restaurants for calendar year 2026, we entered into a purchase agreement with our existing rib supplier, whereby we agreed to purchase approximately $9.2 million of “2.5 & Down Baby Back Ribs” (weight range in which baby back ribs are sold) during calendar year 2026, at a prescribed cost, which we believe is competitive. For calendar year 2025, we entered into a purchase agreement with a new rib supplier, whereby we agreed to purchase approximately $7.8 million of “2.5 & Down Baby Back Ribs” (weight range in which baby back ribs are sold) during calendar year 2025, at a prescribed cost, which we believe is competitive. 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” during calendar year 2024,2025, at a prescribed cost, which we also believe is competitive. The increase in our cost of baby back ribs for calendar year 20252026 compared to calendar year 20242025 is due to ouran purchaseincrease ofin largermarket sized baby back ribsprice and quantity the purchase of baby back ribs for Store #19R, Hollywood, Florida for the entire calendar year, offset by a decrease in market price.ordered.

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

ConsolidationValuation of LimitedLong-Lived PartnershipsAssets

As of MarchJune 28,27, 2026, Flanigan’s Enterprises, Inc., a Florida corporation, together with its subsidiaries (“we”, “our”, “ours” and “us” as the context requires), (i) operates 32thirty-two 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 (ii) 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 MarchJune 28,27, 2026 and as compared to September 27, 2025. 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”.

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 MarchJune 28, 27, 2026, all limited partnerships, with the exception of the limited partnership which owns the restaurant in Sunrise, Florida (Store #85), which opened for business in March 2022 and the limited partnership which owns the restaurant in Miramar, Florida (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”.

Comparison of Thirteen Weeks Ended MarchJune 28,27, 2026 and MarchJune 29, 28, 2025.

Revenues. Total revenue for the thirteen weeks ended March 28, 2026 increased $3,156,000 or 5.91% to $56,515,000 from $53,359,000 for the thirteen weeks ended MarchJune 29, 27, 2026 increased $4,309,000 or 8.30% to $56,203,000 from $51,894,000 for the thirteen weeks ended June 28, 2025 due primarily to increased menu prices and higher restaurant and package liquor store traffic. Effective March 1, 2026, we increased our menu prices for our bar offerings to target an increase to our bar revenues of approximately 3.68% annually and we increased our menu prices for our food offerings to target an increase to our food revenues of approximately 3.25% annually. Effective February 23, 2025, we increased our menu prices for our bar offerings to target an increase to our bar revenues of approximately 0.84% annually. Effective December 4, 2024, we increased our menu prices for our bar offerings to target an increase to our bar revenues of approximately 4.90% annually and effective November 17, 2024 we increased our menu prices for our food offerings to target an increase to our food revenues of approximately 4.14% annually (collectively the “Recent Price Increases”).

Restaurant Food Sales. Restaurant revenue generated from the sale of food, including non-alcoholic beverages, at restaurants totaled $34,608,000 for the thirteen weeks ended March 28, 2026 as compared to $32,586,000$34,436,000 for the thirteen weeks ended MarchJune 29,27, 2026 as compared to $31,933,000 for the thirteen weeks ended June 28, 2025. This increase in restaurant food sales is attributable to the Recent Price Increases and increased restaurant traffic. Comparable weekly restaurant food sales for restaurants open for all of the thirteen weeks ended MarchJune 28,27, 2026 and MarchJune 29,28, 2025 respectively, which consists of eleven restaurants owned by us and ten restaurants owned by affiliated limited partnerships was $2,635,000$2,623,000 and $2,481,000$2,431,000 for the thirteen weeks ended MarchJune 27, 2026 and June 28, 2026 and March 29, 2025, respectively, an increase of 6.21%.7.90%. Comparable weekly restaurant food sales for Company-owned restaurants was $1,304,000 $1,243,000 and $1,235,000$1,153,000 for the thirteen weeks ended MarchJune 28,27, 2026 and MarchJune 29,28, 2025, respectively, an increase of 5.59%.7.81%. Comparable weekly restaurant food sales for affiliated limited partnership owned restaurants only was $1,331,000$1,380,000 and $1,246,000$1,278,000 for the thirteen weeks ended March 28,June 27, 2026 and MarchJune 29,28, 2025, respectively, an increase of 6.82%.7.98%. We expect that restaurant food sales, including non-alcoholic beverages, for the balance of our fiscal year 2026 will increase due to the Recent Price Increases.

Restaurant Bar Sales. Restaurant revenue generated from the sale of alcoholic beverages at restaurants totaled $8,391,000$8,242,000 for the thirteen weeks ended MarchJune 28,27, 2026 as compared to $8,194,000$7,931,000 for the thirteen weeks ended MarchJune 29,28, 2025. The increase in restaurant bar sales during the thirteen weeks ended March 28,June 27, 2026 is primarily due to the Recent Price Increases.Increases, partially offset by the softening of alcohol consumption at our restaurants. Comparable weekly restaurant bar sales for restaurants open for all of the thirteen weeks ended MarchJune 28,27, 2026 and MarchJune 29,28, 2025, which consists of eleven restaurants owned by us and ten restaurants owned by affiliated limited partnerships was $645,000$634,000 and $630,000$610,000 for the thirteen weeks ended MarchJune 28,27, 2026 and MarchJune 29,28, 2025, respectively, an increase of 2.38%.3.93%. Comparable weekly restaurant bar sales for Company-owned restaurants only was $290,000$277,000 and $287,000$268,000 for the thirteen weeks ended March 28,June 27, 2026 and MarchJune 29,28, 2025, respectively, an increase of 1.05%.3.36%. Comparable weekly restaurant bar sales for affiliated limited partnership owned restaurants only was $355,000$357,000 and $343,000$342,000 for the thirteen weeks ended MarchJune 28,27, 2026 and MarchJune 29,28, 2025, an increase of 3.50%. 4.39%. We expect that restaurant bar sales for the balance of our fiscal year 2026 will increase due to the Recent Price Increases, partially offset by the softening of alcohol consumption at our restaurants.

Package Store Sales. Revenue generated from sales of liquor and related items at package liquor stores totaled $12,955,000$12,979,000 for the thirteen weeks ended March 28,June 27, 2026 as compared to $12,051,000$11,522,000 for the thirteen weeks ended MarchJune 29,28, 2025, an increase of $904,000.$1,457,000. This increase was primarily due to increased package liquor store traffic, including e-commerce sales. The weekly average of same store package liquor store sales, which includes eleven (11) Company-owned package liquor stores was $997,000$998,000 and $927,000$886,000 for the thirteen weeks ended MarchJune 28,27, 2026 and March 29,June 28, 2025, respectively, an increase of 7.55%.12.64%. We expect that package liquor store sales for the balance of our fiscal year 2026 will increase due to increased package liquor store traffic, including from e-commerce.

Costs and Expenses. Costs and expenses (consisting of cost of merchandise sold, payroll and related costs, operating expenses, occupancy costs, selling, general and administrative expenses and depreciation and amortization), for the thirteen weeks ended MarchJune 28,27, 2026 increased $2,503,000$3,161,000 or 5.02%6.45% to $52,346,000 $52,203,000 from $49,843,000$49,042,000 for the thirteen weeks ended MarchJune 29,28, 2025. The increase was primarily due to increased cost of merchandise sold, payroll and costs, operating expenses and selling, general and administrative expenses, partially offset by actions taken by management to reduce and/or control costs. We anticipate that our costs and expenses will continue to increase through the balance of our fiscal year 2026. Costs and expenses decreased as a percentage of total revenue to approximately 92.62%92.88% for the thirteen weeks ended MarchJune 28,27, 2026 from 93.41%94.50% for the thirteen weeks ended MarchJune 29,28, 2025.

Restaurant Food Sales and Bar Sales. Gross profit for food and bar sales for the thirteen weeks ended MarchJune 28,27, 2026 increased to $28,763,000$28,989,000 from $27,045,000 $26,901,000 for the thirteen weeks ended MarchJune 29,28, 2025. Our gross profit margin for restaurant food and bar sales (calculated as gross profit reflected as a percentage of restaurant food and bar sales), increased to 66.89%67.92% for the thirteen weeks ended MarchJune 28,27, 2026 as compared to 66.32%67.48% for the thirteen weeks ended MarchJune 29,28, 2025 due primarily to the Recent Price Increases.

Package Store Sales. Gross profit for package store sales for the thirteen weeks ended MarchJune 28,27, 2026 decreasedincreased $244,000$386,000 to $3,138,000 $3,129,000 from $3,382,000$2,743,000 for the thirteen weeks ended MarchJune 29,28, 2025. Our gross profit margin (calculated as gross profit reflected as a percentage of package liquor store sales), for package store sales decreasedincreased to 24.22%24.11% for the thirteen weeks ended MarchJune 28,27, 2026, as compared to 28.06%23.81% for the thirteen weeks ended MarchJune 29,28, 2025, primarily due primarily to higherlower costs for select product offerings and effective promotional activity, partially offset by competitive pricing strategies. We anticipate that the gross profit margin for package liquor store merchandise will decrease for the balance of our fiscal 2026 due to higher overall costs and a reduction in pricing of certain package store merchandise to remain competitive.

Payroll and Related Costs. Payroll and related costs for the thirteen weeks ended MarchJune 28,27, 2026 increased $626,000$692,000 or 3.87%4.30% to $16,810,000$16,798,000 from $16,184,000$16,106,000 for the thirteen weeks ended MarchJune 29,28, 2025. Payroll and related costs for the thirteen weeks ended MarchJune 28,27, 2026 were higher due primarily to the Florida minimum wage increase. Payroll and related costs as a percentage of total revenue was 29.74 %29.89% for the thirteen weeks ended MarchJune 28,27, 2026 and 30.33%31.04% of total revenue for the thirteen weeks ended MarchJune 29,28, 2025.

Operating Expenses. Operating expenses (including but not limited to utilities, insurance, cleaning, credit card fees, supplies, security, and other costs closely related to operating restaurant and package stores) for the thirteen weeks ended MarchJune 28,27, 2026 increased $87,000$188,000 or 1.31%2.70% to $6,725,000$7,160,000 from $6,638,000 $6,972,000 for the thirteen weeks ended MarchJune 29,28, 2025 due primarily to inflation and increases in expenses across all categories.

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 MarchJune 28,27, 2026 increased $84,000$110,000 or 4.18%5.55% to $2,092,000$2,091,000 from $2,008,000 $1,981,000 for the thirteen weeks ended MarchJune 29,28, 2025.

Selling, General and Administrative Expenses. Selling, general and administrative expenses (consisting of general corporate expenses, including but not limited to advertising, professional costs, clerical and administrative overhead) for the thirteen weeks ended MarchJune 28,27, 2026 increased $30,000$338,000 or 2.07%31.47% to $1,478,000$1,412,000 from $1,448,000 $1,074,000 for the thirteen weeks ended MarchJune 29,28, 2025.2025 due primarily to increased legal costs. Selling, general and administrative expenses decreasedincreased as a percentage of total revenue for the thirteen weeks ended MarchJune 28,27, 2026 to 2.62%2.51% as compared to 2.71%2.07% for the thirteen weeks ended MarchJune 29,28, 2025.

Depreciation and Amortization. Depreciation and amortization expense for the thirteen weeks ended MarchJune 28,27, 2026 increased $27,000$36,000 or 2.33%3.08% to $1,188,000$1,203,000 from $1,161,000$1,167,000 for the thirteen weeks ended MarchJune 29,28, 2025. Depreciation and amortization decreased as a percentage of total revenue for the thirteen weeks ended March 28,June 27, 2026 to 2.10%2.14% as compared to 2.18%2.25% for the thirteen weeks ended MarchJune 29,28, 2025.

Interest Expense, Net. Interest expense, net, for the thirteen weeks ended MarchJune 28,27, 2026 increased $6,000$147,000 to $241,000$384,000 from $235,000$237,000 for the thirteen weeks ended MarchJune 29,28, 2025.2025 due to the two new mortgages on store #19 and store #75 and the Calusa refinancing.

Rental Income / Rental Expense. Rental income was $344,000$296,000 and rental expense was $133,000$144,000 for the thirteen weeks ended MarchJune 28,27, 2026, while rental income was $273,000$270,000 and rental expense was $154,000$148,000 for the thirteen weeks ended MarchJune 29,28, 2025. Previously, rental income was presented in Revenues and rental expense was presented in Occupancy costs, Operating expenses and Selling, general and administrative expenses, however, both rental income and rental expense are now presented in Other Income.

Income Taxes. Income tax expense for the thirteen weeks ended MarchJune 28,27, 2026 was $446,000$339,000 compared to $311,000$242,000 for the thirteen weeks ended MarchJune 29,28, 2025. This is primarily due to the tax expense that is anticipated based on the projected pre-tax income and permanent differences.

Net Income. Net income for the thirteen weeks ended MarchJune 28,27, 2026 increased $492,000$971,000 or 14.70%39.01% to $3,838,000$3,460,000 from $3,346,000$2,489,000 for the thirteen weeks ended MarchJune 29,28, 2025 due primarily to the Recent Price Increases, partially offset by overall increased expenses. As a percentage of total revenue, net income for the thirteen weeks ended March 28, 2026 is 6.79% as compared to 6.27% for the thirteen weeks ended MarchJune 29,27, 2026 is 6.16% as compared to 4.80% for the thirteen weeks ended June 28, 2025.

Net Income Attributableattributable to Flanigan’s Enterprises, Inc. Stockholders. Net income attributable to Flanigan’s Enterprises, Inc.’sInc. stockholders for the thirteen weeks ended March 28, 2026 increased $185,000 or 6.88% to $2,875,000 from $2,690,000 for the thirteen weeks ended MarchJune 29,27, 2026 increased $669,000 or 48.06% to $2,061,000 from $1,392,000 for the thirteen weeks ended June 28, 2025 due primarily to the Recent Price Increases, partially offset by overall increased expenses. As a percentage of total revenue, net income attributable to stockholders for the thirteen weeks ended MarchJune 28,27, 2026 is 5.09%3.67% as compared to 5.04%2.68% for the thirteen weeks ended MarchJune 29,28, 2025.

Comparison of Twenty-SixThirty-Nine Weeks Ended MarchJune 28,27, 2026 and March 29,June 28, 2025.

Revenues. Total revenue for the twenty-six thirty-nine weeks ended MarchJune 28,27, 2026 increased $5,729,000$10,038,000 or 5.54%6.47% to $109,083,000$165,286,000 from $103,354,000$155,248,000 for the twenty-sixthirty-nine weeks ended March 29,June 28, 2025 due primarily to the Recent Price Increases and higher restaurant and package liquor store traffic.

Restaurant Food Sales. Restaurant revenue generated from the sale of food, including non-alcoholic beverages, at restaurants totaled $65,540,000$99,976,000 for the twenty-six thirty-nine weeks ended MarchJune 28,27, 2026 as compared to $61,712,000$93,645,000 for the twenty-sixthirty-nine weeks ended MarchJune 29,28, 2025. This increase in restaurant food sales is attributable to the Recent Price Increases and increased restaurant traffic. Comparable weekly restaurant food sales for restaurants open for all of the twenty-sixthirty-nine weeks ended MarchJune 28,27, 2026 and MarchJune 29,28, 2025 respectively, which consists of eleven restaurants owned by us and ten restaurants owned by affiliated limited partnerships was $2,496,000$2,538,000 and $2,351,000$2,378,000 for the twenty-sixthirty-nine weeks ended March 28,June 27, 2026 and MarchJune 29,28, 2025, respectively, an increase of 6.17%.6.73%. Comparable weekly restaurant food sales for Company-owned restaurants was $1,187,000$1,205,000 and $1,115,000$1,128,000 for the twenty-sixthirty-nine weeks ended MarchJune 28,27, 2026 and MarchJune 29,28, 2025, respectively, an increase of 6.46%.6.83%. Comparable weekly restaurant food sales for affiliated limited partnership owned restaurants only was $1,309,000$1,333,000 and $1,236,000$1,250,000 for the twenty-six thirty-nine weeks ended MarchJune 28,27, 2026 and MarchJune 29,28, 2025, respectively, an increase of 5.91%.6.64%. We expect that restaurant food sales, including non-alcoholic beverages, for the balance of our fiscal year 2026 will increase due to the Recent Price Increases.

Restaurant Bar Sales. Restaurant revenue generated from the sale of alcoholic beverages at restaurants totaled $16,246,000$24,488,000 for the twenty-sixthirty-nine weeks ended MarchJune 28,27, 2026 as compared to $16,156,000$24,087,000 for the twenty-sixthirty-nine weeks ended MarchJune 29,28, 2025. The increase in restaurant bar sales during the twenty-sixthirty-nine weeks ended March 28,June 27, 2026 is primarily due to the Recent Price Increases, partially offset by the softening of alcohol consumption at our restaurants. Comparable weekly restaurant bar sales for restaurants open for all of the twenty-sixthirty-nine weeks ended MarchJune 28,27, 2026 and MarchJune 29,28, 2025, which consists of eleven restaurants owned by us and ten restaurants owned by affiliated limited partnerships was $625,000$628,000 and $621,000$618,000 for the twenty-sixthirty-nine weeks ended MarchJune 28,27, 2026 and MarchJune 29,28, 2025, respectively, an increase of 0.64%.1.62%. Comparable weekly restaurant bar sales for Company-owned restaurants only was $279,000$278,000 and $276,000 for both the twenty-sixthirty-nine weeks ended MarchJune 28,27, 2026 and MarchJune 29,28, 2025.2025, respectively, an increase of 0.72%. Comparable weekly restaurant bar sales for affiliated limited partnership owned restaurants only was $346,000$350,000 and $342,000 for the twenty-sixthirty-nine weeks ended March 28,June 27, 2026 and MarchJune 29,28, 2025, an increase of 1.17%.2.34%. We expect that restaurant bar sales for the balance of our fiscal year 2026 will increase due to the Recent Price Increases, partially offset by the softening of alcohol consumption at our restaurants.

Package Store Sales. Revenue generated from sales of liquor and related items at package liquor stores totaled $26,240,000$39,219,000 for the twenty-sixthirty-nine weeks ended March 28,June 27, 2026 as compared to $24,486,000$36,008,000 for the twenty-sixthirty-nine weeks ended MarchJune 29,28, 2025, an increase of $1,754,000.$3,211,000. This increase was primarily due to increased package liquor store traffic, including e-commerce sales. The weekly average of same store package liquor store sales, which includes eleven (11) Company-owned package liquor stores was $1,009,000$1,006,000 and $942,000$923,000 for the twenty-sixthirty-nine weeks ended MarchJune 27, 2026 and June 28, 2026 and March 29, 2025, respectively, an increase of 7.11%.8.99%. We expect that package liquor store sales for the balance of our fiscal year 2026 will increase due to increased package liquor store traffic, including from e-commerce.

Costs and Expenses. Costs and expenses (consisting of cost of merchandise sold, payroll and related costs, operating expenses, occupancy costs, selling, general and administrative expenses and depreciation and amortization), for the twenty-sixthirty-nine weeks ended MarchJune 28,27, 2026 increased $4,159,000$7,320,000 or 4.20%4.94% to $103,245,000 $155,448,000 from $99,086,000$148,128,000 for the twenty-sixthirty-nine weeks ended MarchJune 29,28, 2025. The increase was primarily due to increased cost of merchandise sold, payroll and operating expenses partially offset by actions taken by management to reduce and/or control costs. We anticipate that our costs and expenses will continue to increase through the balance of our fiscal year 2026. Costs and expenses decreased as a percentage of total revenue to approximately 94.65%94.05% for the twenty-sixthirty-nine weeks ended MarchJune 28,27, 2026 from 95.87%95.41% for the twenty-sixthirty-nine weeks ended March 29,June 28, 2025.

Restaurant Food Sales and Bar Sales. Gross profit for food and bar sales for the twenty-sixthirty-nine weeks ended MarchJune 28,27, 2026 increased to $54,566,000$83,555,000 from $51,104,000 $78,005,000 for the twenty-sixthirty-nine weeks ended MarchJune 29,28, 2025. Our gross profit margin for restaurant food and bar sales (calculated as gross profit reflected as a percentage of restaurant food and bar sales), increased to 66.72%67.13% for the twenty-sixthirty-nine weeks ended MarchJune 28,27, 2026 as compared to 65.63%66.26% for the twenty-sixthirty-nine weeks ended MarchJune 29,28, 2025 due primarily to the Recent Price Increases.

Package Store Sales. Gross profit for package store sales for the twenty-sixthirty-nine weeks ended MarchJune 28,27, 2026 increased to $6,458,000$9,587,000 from $6,336,000 $9,079,000 for the twenty-sixthirty-nine weeks ended MarchJune 29,28, 2025. Our gross profit margin (calculated as gross profit reflected as a percentage of package liquor store sales), for package store sales decreased to 24.61%24.44% for the twenty-sixthirty-nine weeks ended MarchJune 28, 27, 2026, as compared to 25.88%25.21% for the twenty-sixthirty-nine weeks ended MarchJune 29,28, 2025, due primarily to higher costs and competitive pricing strategies. We anticipate that the gross profit margin for package liquor store merchandise will decrease for the balance of our fiscal 2026 due to higher costs and a reduction in pricing of certain package store merchandise to remain competitive.

Payroll and Related Costs. Payroll and related costs for the twenty-sixthirty-nine weeks ended MarchJune 28,27, 2026 increased $1,251,000$1,943,000 or 3.92%4.04% to $33,181,000$49,979,000 from $31,930,000$48,036,000 for the twenty-six thirty-nine weeks ended MarchJune 29,28, 2025. Payroll and related costs for the twenty-sixthirty-nine weeks ended MarchJune 28,27, 2026 were higher due primarily to the Florida minimum wage increase. Payroll and related costs as a percentage of total revenue was 30.42%30.24% for the twenty-sixthirty-nine weeks ended MarchJune 28, 27, 2026 and 30.89%30.94% of total revenue for the twenty-sixthirty-nine weeks ended MarchJune 29,28, 2025.

Operating Expenses. Operating expenses (including but not limited to utilities, insurance, cleaning, credit card fees, supplies, security, and other costs closely related to operating restaurant and package stores) for the twenty-sixthirty-nine weeks ended MarchJune 28,27, 2026 increased $535,000$723,000 or 4.07%3.59% to $13,677,000$20,837,000 from $13,142,000 $20,114,000 for the twenty-sixthirty-nine weeks ended MarchJune 29,28, 2025 due primarily to inflation and increases in expenses across all categories.

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 twenty-sixthirty-nine weeks ended MarchJune 28,27, 2026 increased $240,000$350,000 or 6.21%5.98% to $4,107,000$6,198,000 from $3,867,000 $5,848,000 for the twenty-sixthirty-nine weeks ended MarchJune 29,28, 2025.

Selling, General and Administrative Expenses. Selling, general and administrative expenses (consisting of general corporate expenses, including but not limited to advertising, professional costs, clerical and administrative overhead) for the twenty-sixthirty-nine weeks ended MarchJune 28,27, 2026 decreasedincreased $32,000$306,000 or 1.09%7.65% to $2,894,000$4,306,000 from $2,926,000 $4,000,000 for the twenty-sixthirty-nine weeks ended MarchJune 29,28, 2025 due primarily to lowerincreased consultinglegal fees.costs. Selling, general and administrative expenses decreased increased as a percentage of total revenue for the twenty-sixthirty-nine weeks ended MarchJune 28,27, 2026 to 2.65%2.61% as compared to 2.83%2.58% for the twenty-six thirty-nine weeks ended MarchJune 29,28, 2025.

Depreciation and Amortization. Depreciation and amortization expense for the twenty-sixthirty-nine weeks ended MarchJune 28,27, 2026 increased $77,000$113,000 or 3.34%3.25% to $2,384,000$3,587,000 from $2,307,000$3,474,000 for the twenty-six thirty-nine weeks ended MarchJune 29,28, 2025. Depreciation and amortization decreased as a percentage of total revenue for the twenty-sixthirty-nine weeks ended MarchJune 28,27, 2026 to 2.19%2.17% as compared to 2.23%2.24% for the twenty-sixthirty-nine weeks ended MarchJune 29,28, 2025.

Interest Expense, Net. Interest expense, net, for the twenty-sixthirty-nine weeks ended MarchJune 28,27, 2026 increased $9,000$156,000 to $494,000$878,000 from $485,000$722,000 for the twenty-sixthirty-nine weeks ended MarchJune 29, 2025.28, 2025 due to the two new mortgages on store #19 and store #75 and the Calusa refinancing.

Rental Income / Rental Expense. Rental income was $621,000$917,000 and rental expense was $267,000$411,000 for the twenty-sixthirty-nine weeks ended MarchJune 28,27, 2026, while rental income was $540,000$810,000 and rental expense was $315,000$463,000 for the twenty-sixthirty-nine weeks ended MarchJune 29,28, 2025. Previously, rental income was presented in Revenues and rental expense was presented in Occupancy costs, Operating expenses and Selling, general and administrative expenses, however, both rental income and rental expense are now presented in Other Income.

Income Taxes. Income tax expense for the twenty-sixthirty-nine weeks ended MarchJune 28,27, 2026 was $574,000$913,000 compared to $346,000$588,000 for the twenty-sixthirty-nine weeks ended MarchJune 29,28, 2025. This is primarily due to the tax expense that is anticipated based on the projected pre-tax income and permanent differences.

Net Income. Net income for the twenty-six thirty-nine weeks ended MarchJune 28,27, 2026 increased $1,359,000$2,330,000 or 34.16%36.03% to $5,337,000$8,797,000 from $3,978,000$6,467,000 for the twenty-sixthirty-nine weeks ended MarchJune 29,28, 2025 due primarily to the Recent Price Increases, partially offset by overall increased expenses. As a percentage of total revenue, net income for the twenty-sixthirty-nine weeks ended MarchJune 28,27, 2026 is 4.89%5.32% as compared to 3.85%4.17% for the twenty-sixthirty-nine weeks ended MarchJune 29,28, 2025.

Net Income Attributableattributable to Flanigan’s Enterprises, Inc. Stockholders. Net income attributable to Flanigan’s Enterprises, Inc.’sInc. stockholders for the twenty-six thirty-nine weeks ended MarchJune 28,27, 2026 increased $935,000$1,604,000 or 34.06%38.77% to $3,680,000$5,741,000 from $2,745,000$4,137,000 for the twenty-sixthirty-nine weeks ended MarchJune 29,28, 2025 due primarily to the Recent Price Increases, partially offset by overall increased expenses. As a percentage of total revenue, net income attributable to stockholders for the twenty-sixthirty-nine weeks ended MarchJune 28,27, 2026 is 3.37%3.47% as compared to 2.66% for the twenty-sixthirty-nine weeks ended MarchJune 29,28, 2025.

We fund our operations through cash from operations and borrowings from third parties. As of MarchJune 28,27, 2026, we had cash and cash equivalents of approximately $22,831,000,$28,843,000, an increase of $2,737,000 $8,749,000 from our cash balance of $20,094,000 as of September 27, 2025. This increase is primarily due to proceeds from borrowings for store #19 and store #75 and the Calusa refinancing as well as higher revenue.

In the third quarter of our fiscal year 2025, we paid $2.2 million for the purchase of undeveloped land in Cutler Bay, Florida for a future restaurant site. This acquisition reflects our ongoing investment in strategic expansion. While no construction has commenced as of the reporting date, site planning hasis begununderway and management anticipates capital expenditures related to site development and build-out in future fiscal quarters.

We believe that our current cash availability from our cash on hand, positive cash flow from operations, and plannedproceeds mortgagesfrom borrowings will be sufficient to fund our operations and planned capital expenditures for at least the next twelve months.

The following table is a summary of our cash flows for the twenty-sixthirty-nine weeks ended MarchJune 28,27, 2026 and MarchJune 29,28, 2025.

WeDuring didthe notthirty-nine declareweeks orended payJune 27, 2026 our Board of Directors declared a cash dividend of $0.60 per share to shareholders of record on ourJune capital stock10, during2026 and was made payable on June 26, 2026. During the twenty-sixthirty-nine weeks ended MarchJune 28, 20262025 orour theBoard twenty-sixof weeksDirectors endeddeclared Marcha 29,cash dividend of $0.55 per share to shareholders of record on June 12, 2025 and was made payable on June 27, 2025. 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.

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 twenty-sixthirty-nine weeks ended MarchJune 28,27, 2026, we acquired property and equipment of $1,653,000,$11,105,000, (of which $8.45 million was for the purchase of the Stuart Property and $48,000 was purchase deposits transferred to property and equipment), including $254,000$488,000 for renovations to seven Company-owned locations and $251,000 for renovations to three limited partnership owned restaurants. During the thirty-nine weeks ended June 28, 2025, we acquired property and equipment of $4,956,000, (of which $2.2 million was for the purchase of the Cutler Bay Property and $57,000 was purchase deposits transferred to property and equipment), including $285,000 for renovations to four Company-owned locations and $107,000$43,000 for renovations to one limited partnership owned restaurant. During the twenty-six weeks ended March 29, 2025, we acquired property and equipment of $1,731,000, (of which $11,000 was purchase deposits transferred to property and equipment), including $87,000 for renovations to one Company-owned package location and $43,000 for renovations to one limited partnership owned restaurant.

As of MarchJune 28,27, 2026, we had long-term debt (including the current portion) of $19,919,000,$31,434,000, as compared to $20,618,000 as of September 27, 2025.

During the first quarter of our fiscal year 2026, we refinanced with our institutional lender, our mortgage loan encumbering the real property and improvements located at Flanigan’s Calusa Center 12750 – 12790 S.W. 88th Street, Miami, Florida where our Flanigan’s Calusa Center and our limited partnership owned Flanigan’s Seafood Bar and Grill restaurant operate (Store #70), without increasing the principal amount borrowed at thisthat time ($5,676,856). Flanigan’s Calusa Center includes our limited partnership owned Flanigan’s Seafood Bar and Grill restaurant (Store #70) and our corporate-owned Big Daddy’s Wine & Liquors (Store #45). The refinanced mortgage loan earnsaccrued interest at a fluctuating rate per year equal to the sum of (i) the greater of the Term SOFR Daily Floating Rate or the Index Floor (which for purposes hereof iswas 0.00%) and (ii) 2.25%, with the first payment of principal and interest due January 31, 2026 and monthly thereafter on the last day of each month until November 30, 2030 when the entire principal payment and all accrued interest is was to be due in full. We received no excess funds from the refinancing of this mortgage loan. As of March 28, 2026, the variable interest rate was 6.03%.

As of MarchJune 28,27, 2026, we are in compliance with all of the covenants contained in our loan agreements.

During the first quarter of our fiscal year 2025, we entered into a new Master Services Agreement with our current major vendor for a period of one (1) year effective January 1, 2025, with Company options for four (4) one (1) yearone-year renewal options to extend the term of the same. In this new Master Service Agreement, as in our prior Master Service Agreements, we commit to purchase specific products through our current major vendor but are free to purchase other products through other vendors, provided no less than 80% of our overall product needs are purchased through our current major vendor. During the fourth quarter of our fiscal year 2025, we exercised the first one (1) yearone-year renewal option and extended the term of the Master Services Agreement for a period of one (1)year effective January 1, 2026. Subsequent to the end of the third quarter of our fiscal year 2026, we exercised the second one-year renewal option and extended the term of the Master Services Agreement for a period of one year effective January 1, 2026.2027.

The table below summarizes the current assets, current liabilities, and working capital for our fiscal quarter ended MarchJune 28,27, 2026, and our fiscal year ended September 27, 2025.

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,hand and positive cash flow from operations, operations and plannedproceeds mortgagesfrom borrowings will adequately fund operations, debt reductions and planned capital expenditures throughout our fiscal year 2026.