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 28, 2019. 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 March 28, 2020, Flanigan's Enterprises, Inc., a Florida corporation,
together with its subsidiaries ("we", "our", "ours" and "us" as the context
requires), (i) operates 27 units, consisting of restaurants, package liquor
stores and combination restaurants/package liquor stores that we either own or
have operational control over and partial ownership in; and (ii) franchises an
additional five units, consisting of two restaurants (one of which we operate)
and three combination restaurants/package liquor stores. The table below
provides information concerning the type (i.e. restaurant, package liquor store
or combination restaurant/package liquor store) and ownership of the units (i.e.
whether (i) we own 100% of the unit; (ii) the unit is owned by a limited
partnership of which we are the sole general partner and/or have invested in; or
(iii) the unit is franchised by us), as of March 28, 2020 and as compared to
March 30, 2019. With the exception of "The Whale's Rib", a restaurant we operate
but do not own, all of the restaurants operate under our service mark
"Flanigan's Seafood Bar and Grill" and all of the package liquor stores operate
under our service marks "Big Daddy's Liquors" or "Big Daddy's Wine & Liquors".

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                                                      September 28,   March 30,
Types of Units                       March 28, 2020       2019          2019
Company Owned:

Combination package and restaurant          3               3             3

      (1)
Restaurant only                            7                7             7
Package store only                         7                6             6       (2)

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

Total Company Owned/Operated Units         27              26            26

Franchised Units                           5                5             5       (3)


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. Revenues and expenses from Store #19
for the time Store #19 was open during the first quarter of our fiscal year 2019
(two (2) days) are immaterial, with the exception of payroll. Store #19 remains
closed.

(2) During the first quarter of our fiscal year 2020, our new package liquor
store located at 12776 N. Kendal Drive, Miami, Florida (Store #45) opened for
business.

(3) 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.





The novel coronavirus pandemic and related "shelter-in-place" orders and other
governmental mandates ("COVID 19") has adversely affected and will, in all
likelihood continue to adversely affect our restaurant operations and financial
results for the foreseeable future. Due to COVID-19, from mid-March 2020 through
mid-May 2020, we ceased dine-in service at all of our restaurants, limiting
service to take-out and delivery only, ceased the sale of alcoholic beverages at
our restaurants and implemented reduced hours at our retail package liquor
stores. Since mid-May 2020, there has been a gradual elimination of restrictions
on our restaurant operations, permitting us to, among other things, operate at
up to 50% capacity (depending on the location of the restaurant), but with no
bar service and increased operating hours at our package liquor stores.



Due to COVID 19, we implemented (i) certain cost cutting measures including
material layoffs at our restaurants and reduced corporate personnel salaries;
and (ii) a number of changes to our operations such as the establishment of an
in-house delivery service and an adjustment to our traditional staffing model to
meet customer demand. We have been in regular contact with our suppliers and
while to date we have not experienced significant disruptions in our supply
chain, we could see future disruptions should the impacts of COVID 19 extend for
a considerable amount of time. To support our employees, we have implemented
work from home support, increased sanitization of high touch, high traffic areas
in our restaurants, retail package liquor stores and corporate offices, provided
personal protective equipment for our employees and increased the frequency of
personal hygiene practices. As of March 28, 2020, 525 restaurant personnel were
laid off, representing total annualized salary savings of approximately $1.04
million, the salaries of all our non-executive corporate office personnel were
reduced by 20% and the base salaries of our Chief Operating Officer and Chief
Financial Officer were each reduced by 50% and our Chief Executive Officer
waived his base salary. Since mid-May, 2020 and due to our receipt of the PPP
Loans, we have reversed most cost cutting measures, including reinstating
employees laid off at our restaurants in anticipation of resuming dine-in
service and restoring corporate personnel and executive salaries.



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. Once the investors in the limited
partnership have received, in full, amounts equal to their cash invested, an
annual management fee is payable to us equal to one-half (½) of cash available
to the limited partnership, with the other one half (½) of available cash
distributed to the investors (including us and our affiliates). As of March 28,
2020, all limited partnerships have returned all cash invested and we receive an
annual management fee equal to one-half (½) of the cash available for
distribution by the limited partnership. In addition to receipt of distributable
amounts from the limited partnerships, we receive a fee equal to 3% of gross
sales for use of the service mark "Flanigan's Seafood Bar and Grill".

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RESULTS OF OPERATIONS

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


                                                 March 28, 2020                              March 30, 2019
                                          Amount                                      Amount
                                      (In thousands)            Percent           (In thousands)            Percent
Restaurant food sales                 $        18,213                 61.62       $        18,219                 62.70
Restaurant bar sales                            5,315                 17.98                 5,745                 19.77
Package store sales                             6,027                 20.40                 5,092                 17.53

Total Sales                           $        29,555                100.00       $        29,056                100.00

Franchise related revenues                        307                                         429
Rental income                                     209                                         192
Other operating income                             57                                          59

Total Revenue                         $        30,128                             $        29,736




                                            -----------------------Twenty

Six Weeks Ended-----------------------


                                                 March 28, 2020                              March 30, 2019
                                          Amount                                      Amount
                                      (In thousands)            Percent           (In thousands)            Percent
Restaurant food sales                 $        36,955                 61.70       $        35,047                 62.20
Restaurant bar sales                           11,206                 18.71                11,068                 19.64
Package store sales                            11,734                 19.59                10,227                 18.16

Total Sales                           $        59,895                100.00       $        56,342                100.00

Franchise related revenues                        667                                         796
Rental income                                     403                                         390
Other operating income                            104                                         102

Total Revenue                         $        61,069                             $        57,630

Comparison of Thirteen Weeks Ended March 28, 2020 and March 30, 2019.





Revenues. Despite COVID 19, total revenue for the thirteen weeks ended March 28,
2020 increased $392,000 or 1.32% to $30,128,000 from $29,736,000 for the
thirteen weeks ended March 30, 2019. The increase in total revenue was due
primarily to: (i) the cessation of dine-in service and alcohol sales at our
restaurants (limiting service to take-out and delivery of food only) and reduced
operating hours of our retail package liquor stores not taking place until
mid-March 2020 and thereby not adversely affecting our results for the entire
quarter; (ii) increased restaurant traffic prior to mid-March 2020; (iii) the
2019 Price Increases (defined below); and (iv) increased package liquor store
sales offset by the negative effects of COVID 19 on our operations. Effective
June 16, 2019 we increased certain menu prices for our bar offerings to target
an increase to our total bar revenues of approximately 6.2% annually and
effective June 23, 2019 we increased certain menu prices for our food offerings
to target an increase to our total food revenues of approximately 3.4% annually,
(the "2019 Price Increases"). We expect that total revenue for the balance of
our fiscal year 2020 will decrease due to our operations being adversely
impacted by COVID 19. We expect that Store #19 will remain closed during the
balance of our fiscal year 2020 and accordingly do not expect to generate any
revenue from it.




Restaurant Food Sales. Restaurant revenue generated from the sale of food,
including non-alcoholic beverages, at restaurants (food sales) totaled
$18,213,000 for the thirteen weeks ended March 28, 2020 as compared to
$18,219,000 for the thirteen weeks ended March 30, 2019. The nominal decrease in
restaurant food sales for the thirteen weeks ended March 28, 2020 as compared to
restaurant food sales during the thirteen weeks ended March 30, 2019 is
primarily attributable to the negative effects of COVID 19 on our operations,
offset by increased restaurant traffic prior to mid-March 2020 and the 2019
Price Increases. Comparable weekly restaurant food sales (for restaurants open
for all of the second quarter of our fiscal year 2020 and the second quarter of
our fiscal year 2019, which consists of nine restaurants owned by us, (excluding
Store #19 which was closed for the thirteen weeks ended March 28, 2020 and March
30, 2019 due to a fire on October 2, 2018) and eight restaurants owned by
affiliated limited partnerships) was $1,388,000 and $1,401,000 for the thirteen
weeks ended March 28, 2020 and March 30, 2019, respectively, a decrease of
0.93%. Comparable weekly restaurant food sales for Company owned restaurants
only was $713,000 and $720,000 for the second quarter of our fiscal year 2020
and the second quarter of our fiscal year 2019, respectively, a decrease of
0.97%. Comparable weekly restaurant food sales for affiliated limited
partnership owned restaurants only was $675,000 and $681,000 for the second
quarter of our fiscal year 2020 and the second quarter of our fiscal year 2019,
respectively, a decrease of 0.88%. We expect that restaurant food sales,
including non-alcoholic beverages, for the balance of our fiscal year 2020 will
decrease due to the negative effects of COVID 19 on our operations.



Restaurant Bar Sales. Restaurant revenue generated from the sale of alcoholic
beverages, (bar sales), at restaurants totaled $5,315,000 for the thirteen weeks
ended March 28, 2020 as compared to $5,745,000 for the thirteen weeks ended
March 30, 2019. The decrease in restaurant bar sales during the thirteen weeks
ended March 28, 2020 as compared to restaurant bar sales during the thirteen
weeks ended March 30, 2019 is primarily attributable to the negative effects of
COVID 19 on our operations, offset by increased restaurant traffic prior to
mid-March 2020 and the 2019 Price Increases. Comparable weekly restaurant bar
sales (for restaurants open for all of the second quarter of our fiscal year
2020 and the second quarter of our fiscal year 2019, which consists of nine
restaurants owned by us, (excluding Store #19 which was closed for the thirteen
weeks ended March 28, 2020 and March 30, 2019 due to a fire on October 2, 2018),
and eight restaurants owned by affiliated limited partnerships) was $409,000 for
the thirteen weeks ended March 28, 2020 and $442,000 for the thirteen weeks
ended March 30, 2019, a decrease of 7.47%. Comparable weekly restaurant bar
sales for Company owned restaurants only was $189,000 and $205,000 for the
second quarter of our fiscal year 2020 and the second quarter of our fiscal year
2019, respectively, a decrease of 7.80%. Comparable weekly restaurant bar sales
for affiliated limited partnership owned restaurants only was $220,000 and
$237,000 for the second quarter of our fiscal year 2020 and the second quarter
of our fiscal year 2019, respectively, a decrease of 7.17%. We expect that
restaurant bar sales for the balance of our fiscal year 2020 will decrease due
to the negative effects of COVID 19 on our operations, including temporary
closure of restaurant bars except for dine-in service and minimal sales with
take-out service.

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  Table of Contents

Package Store Sales. Revenue generated from sales of liquor and related items at
package liquor stores totaled $6,027,000 for the thirteen weeks ended March 28,
2020 as compared to $5,092,000 for the thirteen weeks ended March 30, 2019, an
increase of $935,000. This increase was primarily due to increased package
liquor store traffic (i) despite COVID-19; and (ii) because of the opening of
our new retail package liquor store (Store #45) located in Kendall, Florida
during the first quarter of our fiscal year 2020. The weekly average of same
store package liquor store sales, which includes eight (8) Company owned package
liquor stores, (excluding Store #19, which was closed for the thirteen weeks
ended March 28, 2020 and March 30, 2019 due to a fire on October 2, 2018 and
also excluding Store #45, which opened for business on October 10, 2019), was
$436,000 for the thirteen weeks ended March 28, 2020 as compared to $392,000 for
the thirteen weeks ended March 30, 2019, an increase of 11.22%. We expect
package liquor store sales to continue to increase throughout the balance of our
fiscal year 2020 as compared to 2019 due to what appears to be an increased
demand for package liquor store products resulting from COVID 19 and the opening
of our new package liquor store located in Kendall, Florida during the first
quarter of our fiscal year 2020.



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 March 28,
2020 increased $765,000 or 2.75% to $28,611,000 from $27,846,000 for the
thirteen weeks ended March 30, 2019. The increase was primarily due to an
expected general increase in food costs, offset by actions taken by management
in mid-March, 2020 to reduce and/or control costs. We expect our operating costs
and expenses will decrease for the balance of our fiscal year 2020 due to cost
cutting measures we have implemented because of the negative effects of COVID 19
on our operations, (the "Cost Cutting Measures"). Operating costs and expenses
increased as a percentage of total sales to approximately 94.96% in the second
quarter of our fiscal year 2020 from 93.64% in the second quarter of our fiscal
year 2019.

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 March 28, 2020 decreased to $15,628,000 from $15,646,000
for the thirteen weeks ended March 30, 2019. Our gross profit margin for
restaurant food and bar sales (calculated as gross profit reflected as a
percentage of restaurant food and bar sales), was 66.42% for the thirteen weeks
ended March 28, 2020 and 65.29% for the thirteen weeks ended March 30, 2019. We
expect that our gross profit margin for restaurant food and bar sales will
decrease during the balance of our fiscal year 2020 due to the negative effects
of COVID 19 on our restaurant bar operations, the higher gross profit margin
item and higher food costs.



Package Store Sales. Gross profit for package liquor store sales for the
thirteen weeks ended March 28, 2020 increased to $1,701,000 from $1,373,000 for
the thirteen weeks ended March 30, 2019, due primarily to increased package
liquor store traffic which we believe has been caused by COVID-19, as well as
the opening of our new Store #45 during the first quarter of our fiscal year
2020. Our gross profit margin, (calculated as gross profit reflected as a
percentage of package liquor store sales), for package store sales was 28.22%
for the thirteen weeks ended March 28, 2020 and 26.96% for the thirteen weeks
ended March 30, 2019. We anticipate that the gross profit margin for package
liquor store merchandise will decrease during our fiscal year 2020 due to higher
costs and a reduction in pricing of certain package store merchandise to be

more
competitive.

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  Table of Contents


Payroll and Related Costs. Payroll and related costs for the thirteen weeks
ended March 28, 2020 increased $85,000 or 0.94% to $9,152,000 from $9,067,000
for the thirteen weeks ended March 30, 2019. Higher payroll and related costs
for the thirteen weeks ended March 28, 2020 were primarily due to higher
restaurant sales, which require additional payroll and related costs for
employees such as cooks, bartenders and servers, and payroll for our new package
liquor store in Kendall, Florida. We anticipate that until our restaurant
operations are restored to pre-COVID 19 levels, of which there can be no
assurance, payroll and related costs will be less than our costs from 2019.
Payroll and related costs as a percentage of total sales was 30.38% in the
second quarter of our fiscal year 2020 and 30.49% of total sales in the second
quarter of our fiscal year 2020.



Occupancy Costs. Occupancy costs (consisting of percentage rent, common area
maintenance, repairs, real property taxes, amortization of leasehold purchases
and rent expense associated with operating lease liabilities under ASC 842) for
the thirteen weeks ended March 28, 2020 increased $349,000 or 23.20% to
$1,853,000 from $1,504,000 for the thirteen weeks ended March 30, 2019 due
primarily to our adoption of ASC 842. We anticipate that our occupancy costs
will increase throughout our fiscal year 2020 as compared to 2019 due primarily
to the rent we are required to pay at our new restaurant in development to be
located in Sunrise, Florida and our adoption of ASC 842.



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 March 28, 2020 increased
$142,000 or 2.71% to $5,380,000 from $5,238,000 for the thirteen weeks ended
March 30, 2019. Selling, general and administrative expenses increased as a
percentage of total sales in the second quarter of our fiscal year 2020 to
17.86% as compared to 17.61% in the second quarter of our fiscal year 2019. We
anticipate that until our operations are restored to pre-COVID 19 levels, of
which there can be no assurance, our selling, general and administrative
expenses will be less than our expenses from 2019, offset by increases across
all categories.



Depreciation and Amortization. Depreciation and amortization expense for the
thirteen weeks ended March 28, 2020 increased $71,000 or 9.54% to $815,000 from
$744,000 from the thirteen weeks ended March 30, 2019. As a percentage of total
revenue, depreciation and amortization expense was 2.71% of revenue in the
thirteen weeks ended March 28, 2020 and 2.50% of revenue in the thirteen weeks
ended March 30, 2019.




Interest Expense, Net. Interest expense, net, for the thirteen weeks ended March
28, 2020 increased $17,000 to $198,000 from $181,000 for the thirteen weeks
ended March 30, 2019. Interest expense, net, will increase for the balance of
our fiscal year 2020 due to our borrowing of an additional $4.5 million during
the first quarter of our fiscal year 2020 on the re-financing by our wholly
owned subsidiary, Flanigan's Calusa Center, LLC, of its mortgage loan with an
unrelated third party lender, increasing the principal amount borrowed from
$2.72 million to $7.21 million.



Income Taxes. Income taxes for the thirteen weeks ended March 28, 2020 was a
credit of $88,000, as compared to an expense of $257,000 for the thirteen weeks
ended March 30, 2019. The income tax credit for the thirteen weeks ended March
28, 2020 reflects an adjustment to the income tax expense for the first quarter
of our fiscal year 2020 which was based upon a pre Covid-19 estimated annual net
income for our fiscal year 2020.



Net Income. Net income for the thirteen weeks ended March 28, 2020 decreased
$45,000 or 3.07% to $1,420,000 from $1,465,000 for the thirteen weeks ended
March 30, 2019. Net income for the thirteen weeks ended March 28, 2020 decreased
when compared to the thirteen weeks ended March 30, 2019 primarily due to the
negative effects of COVID 19 on our operations, our adoption of ASC 842, higher
food costs and overall expenses, offset by higher restaurant traffic prior to
mid-March 2020, our implementation of the Cost Cutting Measures and the 2019
Price Increases. As a percentage of sales, net income for the second quarter of
our fiscal year 2020 is 4.71%, as compared to 4.93% in the second quarter of our
fiscal year 2019.

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  Table of Contents

Net Income Attributable to Stockholders. Net income attributable to stockholders
for the thirteen weeks ended March 28, 2020 decreased $373,000 or 36.53% to
$648,000 from $1,021,000 for the thirteen weeks ended March 30, 2019. Net income
attributable to stockholders for the thirteen weeks ended March 28, 2020
decreased when compared to the thirteen weeks ended March 30, 2019 primarily due
to the negative effects of COVID 19 on our operations, our adoption of ASC 842,
higher food costs and overall expenses, offset by higher restaurant traffic
prior to mid-March 2020, our implementation of the Cost Cutting Measures and the
2019 Price Increases. As a percentage of sales, net income for the second
quarter of our fiscal year 2020 is 2.15%, as compared to 3.43% in the second
quarter of our fiscal year 2019.

Comparison of Twenty Six Weeks Ended March 28, 2020 and March 30, 2019.





Revenues.Total revenue for the twenty-six weeks ended March 28, 2020 increased
$3,439,000 or 5.97% to $61,069,000 from $57,630,000 for the twenty-six weeks
ended March 30, 2019. The increase in total revenue was due primarily to (i) the
cessation of dine-in service and alcohol sales at our restaurants (limiting
service to take-out and delivery of food only) and reduced operating hours of
our retail package liquor stores not taking place until mid-March 2020 and
thereby not adversely affecting our results for the entire twenty-six weeks;
(ii) increased restaurant traffic prior to mid-March 2020; (iii) the 2019 Price
Increases; and (iv) increased package liquor store sales, offset by the negative
effects of COVID 19 on our operations. We expect that total revenue for the
balance of our fiscal year 2020 will decrease due to the negative effects of
COVID 19 on our operations. We expect that Store #19 will remain closed during
the balance of our fiscal year 2020 and accordingly do not expect to generate
any revenue from it.




Restaurant Food Sales. Restaurant revenue generated from the sale of food,
including non-alcoholic beverages, at restaurants (food sales) totaled
$36,955,000 for the twenty-six weeks ended March 28, 2020 as compared to
$35,047,000 for the twenty-six weeks ended March 30, 2019. The increase in
restaurant food sales for the twenty-six weeks ended March 28, 2020 as compared
to restaurant food sales during the twenty-six weeks ended March 30, 2019 is
primarily due to increased traffic prior to mid-March 2020, and the 2019 Price
Increases, offset by the negative effects of COVID 19 on our operations.
Comparable weekly restaurant food sales (for restaurants open for all of the
first and second quarters of our fiscal year 2020 and the first and second
quarters of our fiscal year 2019, which consists of nine restaurants owned by
us, (excluding Store #19 which was closed for the twenty-six weeks ended March
28, 2020 and March 30, 2019 due to a fire on October 2, 2018) and eight
restaurants owned by affiliated limited partnerships) was $1,410,000 and
$1,348,000 for the twenty-six weeks ended March 28, 2020 and March 30, 2019,
respectively, an increase of 4.60%. Comparable weekly restaurant food sales for
Company owned restaurants only was $717,000 and $681,000 for the first and
second quarters of our fiscal year 2020 and the first and second quarters of our
fiscal year 2019, respectively, an increase of 5.29%. Comparable weekly
restaurant food sales for affiliated limited partnership owned restaurants only
was $693,000 and $667,000 for the first and second quarters of our fiscal year
2020 and the first and second quarters of our fiscal year 2019, respectively, an
increase of 3.90%. We expect that restaurant food sales, including non-alcoholic
beverages, for the balance of our fiscal year 2020 will decrease significantly
due to the negative effects of COVID 19 on our operations.



Restaurant Bar Sales. Restaurant revenue generated from the sale of alcoholic
beverages, (bar sales), at restaurants totaled $11,206,000 for the twenty-six
weeks ended March 28, 2020 as compared to $11,068,000 for the twenty-six weeks
ended March 30, 2019. The increase in restaurant bar sales during the twenty-six
weeks ended March 28, 2020 as compared to restaurant bar sales during the
twenty-six weeks ended March 30, 2019 is primarily due to increased restaurant
traffic prior to mid-March 2020, and the 2019 Price Increases, offset by the
negative effects of COVID 19 on our operations. Comparable weekly restaurant bar
sales (for restaurants open for all of the first and second quarters of our
fiscal year 2020 and the first and second quarters of our fiscal year 2019,
which consists of nine restaurants owned by us, (excluding Store #19 which was
closed for the twenty-six weeks ended March 28, 2020 and March 30, 2019 due to a
fire on October 2, 2018), and eight restaurants owned by affiliated limited
partnerships) was $431,000 for the twenty-six weeks ended March 28, 2020 and
$426,000 for the twenty-six weeks ended March 30, 2019, an increase of 1.17%.
Comparable weekly restaurant bar sales for Company owned restaurants only was

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$198,000 and $194,000 for the first and second quarters of our fiscal year 2020
and the first and second quarters of our fiscal year 2019, respectively, an
increase of 2.06%. Comparable weekly restaurant bar sales for affiliated limited
partnership owned restaurants only was $233,000 and $232,000 for the first and
second quarters of our fiscal year 2020 and the first and second quarters of our
fiscal year 2019, respectively, an increase of 0.43%. We expect that restaurant
bar sales for the balance of our fiscal year 2020 will decrease due to the
negative effects of COVID 19 on our operations.



Package Store Sales. Revenue generated from sales of liquor and related items at
package liquor stores totaled $11,734,000 for the twenty-six weeks ended March
28, 2020 as compared to $10,227,000 for the thirteen weeks ended March 30, 2019,
an increase of $1,507,000. This increase was primarily due to increased package
liquor store traffic (i) despite COVID 19; and because of the opening of our new
retail package liquor store (Store #45) located in Kendall, Florida during the
first quarter of our fiscal year 2020. The weekly average of same store package
liquor store sales, which includes eight (8) Company owned package liquor
stores, (excluding Store #19, which was closed for the twenty-six weeks ended
March 28, 2020 and March 30, 2019 due to a fire on October 2, 2018 and also
excluding Store #45, which opened for business on October 10, 2019), was
$426,000 for the twenty-six weeks ended March 28, 2020 as compared to $393,000
for the twenty-six weeks ended March 30, 2019, an increase of 8.40%. We expect
package liquor store sales to continue to increase throughout the balance of our
fiscal year 2020 due to what appears to be an increased demand for package
liquor store products resulting from COVID-19 and the opening of our new package
liquor store located in Kendall, Florida during the first quarter of our fiscal
year 2020.



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 twenty-six weeks ended March 28,
2020 increased $3,236,000 or 5.87% to $58,321,000 from $55,085,000 for the
twenty-six weeks ended March 30, 2019. The increase was primarily due to an
expected general increase in food costs, offset by our implementation of the
Cost Cutting Measures. . We expect our operating costs and expenses will
decrease for the balance of our fiscal year 2020 due to our implementation of
the Cost Cutting Measures. Operating costs and expenses increased as a
percentage of total sales to approximately 95.58% in the twenty-six quarter of
our fiscal year 2020 from 92.91% in the twenty-six quarter of our fiscal year
2019.

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
twenty-six weeks ended March 28, 2020 increased to $31,837,000 from $30,073,000
for the twenty-six weeks ended March 30, 2019. Our gross profit margin for
restaurant food and bar sales (calculated as gross profit reflected as a
percentage of restaurant food and bar sales), was 66.11% for the twenty-six
weeks ended March 28, 2020 and 65.21% for the twenty-six weeks ended March 30,
2019. We expect that our gross profit margin for restaurant food and bar sales
will decrease during the balance of our fiscal year 2020 due to the negative
effects of COVID 19 on our restaurant bar operations, the higher gross margin
item and higher food costs.



Package Store Sales. Gross profit for package liquor store sales for the
twenty-six weeks ended March 28, 2020 increased to $3,269,000 from $2,741,000
for the twenty-six weeks ended March 30, 2019, due primarily to increased
package liquor store traffic which we believe has been caused by COVID-19 and
the opening of our new retail package liquor store (Store #45) located in
Kendall, Florida during the first quarter of our fiscal year 2020. Our gross
profit margin, (calculated as gross profit reflected as a percentage of package
liquor store sales), for package store sales was 27.86% for the twenty-six weeks
ended March 28, 2020 and 26.80% for the twenty-six weeks ended March 30, 2019.
We anticipate that the gross profit margin for package store merchandise will
decrease during our fiscal year 2020 due to higher costs and a reduction in
pricing of certain package store merchandise to be more competitive.

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Payroll and Related Costs. Payroll and related costs for the twenty-six weeks
ended March 28, 2020 increased $1,004,000 or 5.68% to $18,669,000 from
$17,665,000 for the twenty-six weeks ended March 30, 2019. Higher payroll and
related costs for the thirteen weeks ended March 28, 2020 were primarily due to
higher restaurant sales, which require additional payroll and related costs for
employees such as cooks, bartenders and servers, and payroll for our new package
liquor store in Kendall, Florida. We anticipate that, until our restaurant
operations are restored to pre-COVID 19 levels, of which there can be no
assurance, payroll and related costs will be less than our costs from 2019.
Payroll and related costs as a percentage of total sales was 30.57% in the
twenty-six weeks ended March 28, 2020 and 30.65% of total sales in the twenty-
six weeks ended March 30, 2019.



Occupancy Costs. Occupancy costs (consisting of percentage rent, common area
maintenance, repairs, real property taxes, amortization of leasehold purchases
and rent expense associated with operating lease liabilities under ASC 842) for
the twenty-six weeks ended March 28, 2020 increased $696,000 or 23.09% to
$3,710,000 from $3,014,000 for the twenty-six weeks ended March 30, 2019 due
primarily to our adoption of ASC 842. We anticipate that our occupancy costs
will increase throughout our fiscal year 2020 due primarily to the rent we are
required to pay pursuant to the newly acquired lease agreement for our new
restaurant in development to be located in Sunrise, Florida and our adoption of
ASC 842.



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 twenty-six weeks ended March 28, 2020 increased
$276,000 or 2.54% to $11,153,000 from $10,877,000 for the twenty six weeks ended
March 30, 2019. Selling, general and administrative expenses increased as a
percentage of total sales for the twenty-six weeks ended March 28, 2020 to
18.26% as compared to 18.87% for the twenty-six weeks ended March 30, 2019. We
anticipate that until our operations are restored to pre-COVID 19 levels, of
which there can be no assurance, our selling, general and administrative
expenses will be less than our expenses from 2019, offset by increases across
all categories.



Depreciation and Amortization. Depreciation and amortization expense for the
twenty-six weeks ended March 28, 2020 increased $168,000 or 11.48% to $1,632,000
from $1,464,000 from the twenty-six weeks ended March 30, 2019. As a percentage
of total revenue, depreciation and amortization expense was 2.67% of revenue in
the twenty-six weeks ended March 28, 2020 and 2.54% of revenue in the twenty-six
weeks ended March 30, 2019.



Interest Expense, Net. Interest expense, net, for the twenty-six weeks ended
March 28, 2020 increased $36,000 to $402,000 from $366,000 for the twenty-six
weeks ended March 30, 2019. Interest expense, net, will increase for the balance
of our fiscal year 2020 due to our borrowing of an additional $4.5 million
during the first quarter of our fiscal year 2020 on the re-financing by our
wholly owned subsidiary, Flanigan's Calusa Center, LLC, of its mortgage loan
with an unrelated third party lender, increasing the principal amount borrowed
from $2.72 million to $7.21 million.



Income Taxes. Income taxes for the twenty-six weeks ended March 28, 2020 was
$30,000 and $344,000 for the twenty-six weeks ended March 30, 2019. Income taxes
for the twenty six weeks ended March 28, 2020 reflect a post Covid-19 estimated
annual net income for our fiscal year 2020.



Net Income. Net income for the twenty-six weeks ended March 28, 2020 decreased
$122,000 or 4.95% to $2,341,000 from $2,463,000 for the twenty-six weeks ended
March 30, 2019. Net income for the twenty-six weeks ended March 28, 2020
decreased when compared to the twenty-six weeks ended March 30, 2019 primarily
due to the negative effects of COVID 19 on our operations. our adoption of ASC
842, higher food costs and overall expenses, offset by higher restaurant traffic
prior to mid-March 2020, our implementation of the Cost Cutting Measures and the
2019 Price Increases. As a percentage of sales, net income for the twenty-six
weeks ended March 28, 2020 is 3.83%, as compared to 4.27% in the twenty-six

weeks ended March 30, 2019.

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Net Income Attributable to Stockholders. Net income attributable to stockholders
for the twenty-six weeks ended March 28, 2020 decreased $622,000 or 35.26% to
$1,142,000 from $1,764,000 for the twenty-six weeks ended March 30, 2019. Net
income attributable to stockholders for the twenty-six weeks ended March 28,
2020 decreased when compared to the twenty-six weeks ended March 30, 2019
primarily due to the negative effects of COVID 19 on our operations, our
adoption of ASC 842, higher food costs and overall expenses, offset by higher
restaurant traffic prior to mid-March 2020, our implementation of the Cost
Cutting Measures and the 2019 Price Increases. As a percentage of sales, net
income for the twenty-six weeks ended March 28, 2020 is 1.87%, as compared to
3.06% for the twenty-six weeks ended March 30, 2019.

New Limited Partnership Restaurants





As new restaurants open, our income from operations will be adversely affected
due to our obligation to advance pre-opening costs, including but not limited to
pre-opening rent for the new locations. During the thirteen weeks ended March
28, 2020, we had one new restaurant location in Sunrise, Florida in the
development stage and have advanced $646,000 through March 28, 2020. During the
fourth quarter of our fiscal year 2019, we entered leases for two spaces
adjacent to each other, to house a new "Flanigan's Seafood Bar and Grill" as
well as a "Big Daddy's Wine and Liquors" in a shopping center in Miramar,
Florida, which shopping center is currently under construction.

Menu Price Increases and Trends





Effective June 16, 2019 we increased menu prices for our bar offerings to target
an increase to our bar revenues of approximately 6.2% annually and effective
June 23, 2019 we increased menu prices for our food offerings to target an
increase to our food revenues of approximately 3.4% annually to offset higher
food costs and higher overall expenses. Prior to these increases, we previously
raised menu prices in the fourth quarter of our fiscal year 2017.



COVID-19 has and will continue to materially and adversely affect our restaurant
business for what may be a prolonged period of time. This damage and disruption
has resulted from events and factors that were impossible for us to predict and
are beyond our control. As a result, and despite experiencing increased sales
and traffic at certain of our package liquor stores, COVID-19 has materially
adversely affected our results of operations for the thirteen weeks ended March
28, 2020, and will, in all likelihood, impact our results of operations,
liquidity and/or financial condition for the remainder of fiscal year 2020 and
into our fiscal year 2021. The extent to which our restaurant business may be
adversely impacted and its effect on our operations, liquidity and/or financial
condition cannot be accurately predicted.

We are not actively searching for locations for the operation of new package
liquor stores, but when our attempt to expand "The Whale's Rib" restaurant
concept in Miami, Florida was abandoned, we decided that the space we had
targeted for the "The Whales Rib" would be ideal for the operation of a package
liquor store and during the fourth quarter of our fiscal year 2018, we received
governmental approval to operate a package liquor store at that location. The
new package liquor store (Store #45) located in Kendall, Florida opened for
business in October, 2019. During the fourth quarter of our fiscal year 2019, we
entered a lease to house a new "Big Daddy's Wine & Liquors" package liquor store
in space adjacent to where we are planning a new "Flanigan's Seafood Bar and
Grill", restaurant in a shopping center in Miramar, Florida, which shopping
center is currently under construction.

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Liquidity and Capital Resources


We fund our operations through cash from operations. As of March 28, 2020, we
had cash of approximately $18,061,000, an increase of $4,389,000 from our cash
balance of $13,672,000 as of September 28, 2019. During the first quarter of our
fiscal year 2020, our wholly owned subsidiary, Flanigan's Calusa Center, LLC,
re-financed its mortgage loan with an unrelated third party lender, increasing
the principal amount borrowed from $2.72 million to $7.21 million.



Subsequent to the end of the second quarter of our fiscal year 2020, we, as well
as certain of the entities owning the limited partnership stores (the "LP's"),
franchised stores (the "Franchisees") as well as the store we manage but do not
own (the "Managed Store") (collectively, the "Borrowers"), applied for and
received loans from an unrelated third party lender (the "Lender") pursuant to
the Paycheck Protection Program (the "PPP") under the Coronavirus Aid, Relief,
and Economic Security Act (the "CARES Act") enacted March 27, 2020, in the
aggregate principal amount of approximately $13.1 million (the "PPP Loans"), of
which approximately: (i) $5.9 million was loaned to us ; (ii) $4.1 million was
loaned to 8 of the LP's ; (iii) $2.6 million was loaned to 5 of the Franchisees;
and (iv) $0.5 million was loaned to the Managed Store.

The PPP Loans, which are in the form of Notes issued by each of the Borrowers,
mature two years from the date of funding (dates ranging from May 5, 2022 to May
11, 2022) and bear interest at a rate of 1.00% per annum, payable monthly
commencing approximately six months from the date of issuance of the Notes
(dates ranging from April 30, 2020 to May 6, 2020). The Notes may be prepaid by
the applicable Borrower at any time prior to maturity with no prepayment
penalties. Proceeds from the PPP Loans will be available to the respective
Borrower to fund designated expenses, including certain payroll costs, group
health care benefits and other permitted expenses, including rent and interest
on mortgages and other debt obligations incurred before February 15, 2020. Under
the terms of the PPP, up to the entire amount of principal and accrued interest
may be forgiven to the extent the proceeds of the PPP Loans are used for
qualifying expenses as described in the CARES Act and applicable implementing
guidance issued by the U.S. Small Business Administration under the PPP. No
assurance can be given that the Borrowers will obtain forgiveness of the PPP
Loan in whole or in part.

With respect to any portion of any of the PPP Loans that is not forgiven under
the terms of the PPP, such amounts will be subject to customary provisions for a
loan of this type, including customary events of default relating to, among
other things, payment defaults, breaches of the provisions of the applicable PPP
Note and cross-defaults on any other loan with the Lender or other creditors.



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

Cash Flows

The following table is a summary of our cash flows for the twenty six weeks ended March 28, 2020 and March 30, 2019.

---------Twenty Six Weeks Ended--------


                                                           March 28, 2020              March 30, 2019
                                                                           (in Thousands)

Net cash provided by operating activities                $             4,213         $             5,069
Net cash used in investing activities                                 (1,982 )                    (2,530 )
Net cash provided by (used in) financing activities                    2,158                      (2,480 )

Net Increase in Cash and Cash Equivalents                              4,389                          59

Cash and Cash Equivalents, Beginning                                  13,672                      13,414

Cash and Cash Equivalents, Ending                        $            18,061         $            13,473




On March 24, 2020, due to the negative effects of COVID 19 on our operations,
our Board of Directors cancelled a previously declared cash dividend of $.30 per
share to shareholders of record on March 20, 2020 and payable on April 3, 2020.
During the twenty-six weeks ended March 30, 2019, our Board of Directors
declared and paid a cash dividend of 28 cents per share to shareholders of
record on March 16, 2019. 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 to fund the
development and construction of new restaurants and to fund capitalized property
improvements for our existing restaurants. During the twenty-six weeks ended
March 28, 2020, we acquired property, plant and equipment and construction in
progress of $1,640,000, (of which $61,000 was deposits recorded in other assets
and $2,000 was purchase deposits transferred to construction in process as of
September 28, 2019), which amount included $263,000 for the renovation to two
(2) existing limited partnership restaurants and $254,000 for renovations to
four (4) Company owned restaurants. During the twenty six weeks ended March 30,
2019, we acquired property, plant and equipment and construction in progress of
$4,199,000, (of which $1,300,000 was for the purchase of vacant real property in
Pompano Beach, Florida, $584,000 was for the purchase of construction in process
and $486,000 was from deposits recorded in other assets as of September 29,
2018), which amount included $73,000 for the renovation to one (1) existing
limited partnership restaurant and $213,000 for renovations to three (3) Company
owned restaurants.



All of our owned units require periodic refurbishing in order to remain
competitive. We anticipate the cost of this refurbishment in our fiscal year
2020 to be approximately $750,000, excluding construction/renovations to Store
#19 (our combination package liquor store and restaurant which is being rebuilt
due to damages caused by a fire) and Store #85 (our Sunrise, Florida restaurant
location in development), $517,000 of which has been spent through March 28,
2020.

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Long Term Debt




As of March 28, 2020, we had long term debt of $17,448,000, as compared to
$14,574,000 as of March 30, 2019, and $13,080,000 as of September 28, 2019. Our
long term debt increased as of March 28, 2020 as compared to September 28, 2019
due to the re-financing of its mortgage loan by our wholly owned subsidiary,
Flanigan's Calusa Center, LLC, increasing the principal amount borrowed from
$2.72 million to $7.21 million and $1,281,000 for financed insurance premiums,
less any payments made on account thereof. As of March 28, 2020, we are in
compliance with the covenants of all loans with our lender.

As of March 28, 2020, the aggregate principal balance owed from the financing of our insurance policies is $1,048,000.





Construction Contracts

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





During our fiscal year 2018 and prior to it being closed in the first quarter of
our fiscal year 2019 due to damages caused by a fire, we entered into an
agreement with a third party unaffiliated general contractor for design and
development services for the construction of a new building (the "New Building")
on a parcel of real property which we own and which is adjacent to the real
property where our combination package liquor store and restaurant located at
2505 N. University Drive, Hollywood, Florida, (Store #19) operated until it was
closed in October, 2018 due to damages caused by a fire for a total contract
price of for a total contract price of $127,000 (the "$127,000 Contract"). We
plan to re-locate our package liquor store at the property to the New Building.
During the term of the $127,000 Contract, we agreed to change orders which had
the effect of increasing the total contract price of the same to $138,000, and
during the second quarter of our fiscal year 2019, we paid the balance of the
total contract price of the $127,000 Contract, in the amount of $25,000. During
the first quarter of our fiscal year 2020, we agreed upon changes to the
$127,000 Contract for additional design and development services for the
construction of the New Building which had the effect of increasing the total
contract price of the same by $10,000 to $148,000, of which $6,000 has been paid
through March 28, 2020.



During the third quarter of our fiscal year 2019, we entered into an agreement
with a third party unaffiliated architect for design and development services
totaling $77,000 for the re-build of our restaurant located at 2505 N.
University Drive, Hollywood, Florida (Store #19) which has been closed since
October 2018 due to damages caused by a fire, of which $62,000 has been paid.
Additionally, during the third quarter of our fiscal year 2019, we entered into
an agreement with a third party unaffiliated general contractor for site work at
this location totaling $1,618,000, (i) to connect the real property where this
restaurant operated (Store #19) to city sewer and (ii) to construct a new
building on the adjacent parcel of real property for the operation of a package
liquor store, of which $-0- has been paid through March 28, 2020.

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





During the third quarter of our fiscal year 2019, we also entered into an
agreement with a third party unaffiliated design group for design and
development services of our new location at 14301 W. Sunrise Boulevard, Sunrise,
Florida 33323 (Store #85) for a total contract price of $122,000. During the
first quarter of our fiscal year 2020, we agreed upon amendments to the $122,000
Contract for additional design and development services which had the effect of
increasing the total contract price by $18,000 to $140,000, of which $97,000 has
been paid through March 28, 2020.



Purchase Commitments



In order to fix the cost and ensure adequate supply of baby back ribs for our
restaurants, on November 5, 2019, we entered into a purchase agreement with our
current rib supplier, whereby we agreed to purchase approximately $5,314,000 of
baby back ribs during calendar year 2020 from this vendor at a fixed cost.

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





Working Capital



The table below summarizes the current assets, current liabilities, and working
capital for our fiscal quarters ended March 28, 2020, March 30, 2019 and our
fiscal year ended September 29, 2018.



Item                  March 28, 2020      March 30, 2019      Sept. 28, 2019
                                            (in Thousands)

Current Assets        $        25,324     $        19,746     $        19,593
Current Liabilities            15,957              16,734              13,129
Working Capital       $         9,367     $         3,012     $         6,464




Our working capital increased during our fiscal quarter ended March 28, 2020
from our working capital for our fiscal quarter ended March 30, 2019 and our
fiscal year ended September 28, 2019 due to the cash received from the
re-financing by our wholly owned subsidiary, Flanigan's Calusa Center, LLC, of a
mortgage loan, increasing the principal amount from $2.72 million to $7.21
million, offset by $648,000 due to our adoption of ASC 842.



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, cash flow from operations and funds available from our borrowings will
adequately fund operations, debt reductions and planned capital expenditures
throughout our fiscal year 2020.

Off-Balance Sheet Arrangements

We do not have off-balance sheet arrangements.





Inflation



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

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