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<SEC-DOCUMENT>0000914317-06-000588.txt : 20060216
<SEC-HEADER>0000914317-06-000588.hdr.sgml : 20060216
<ACCEPTANCE-DATETIME>20060216162129
ACCESSION NUMBER:		0000914317-06-000588
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20051231
FILED AS OF DATE:		20060216
DATE AS OF CHANGE:		20060216

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			FLANIGANS ENTERPRISES INC
		CENTRAL INDEX KEY:			0000012040
		STANDARD INDUSTRIAL CLASSIFICATION:	RETAIL-EATING PLACES [5812]
		IRS NUMBER:				590877638
		STATE OF INCORPORATION:			FL
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-06836
		FILM NUMBER:		06625564

	BUSINESS ADDRESS:	
		STREET 1:		2841 CYPRESS CREEK RD
		CITY:			FORT LAUDERDALE
		STATE:			FL
		ZIP:			33309
		BUSINESS PHONE:		3059749003

	MAIL ADDRESS:	
		STREET 1:		2841 CYPRESS CREEK ROAD
		CITY:			FORT LAUDERDALE
		STATE:			FL
		ZIP:			33309

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	BIG DADDYS LOUNGES INC
		DATE OF NAME CHANGE:	19780309

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	CASTLEWOOD INTERNATIONAL CORP
		DATE OF NAME CHANGE:	19760222

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	MOSAM CORP
		DATE OF NAME CHANGE:	19690415
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>form10q-73839_flanigan.txt
<DESCRIPTION>FORM 10-Q
<TEXT>

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


                                    FORM 10-Q



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

                For the quarterly period ended December 31, 2005

                                       or

[_]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
      EXCHANGE OF 1934

For the transition period from ______ to ______

Commission File Number I-6836


                          Flanigan's Enterprises, Inc.
             (Exact name of registrant as specified in its charter)


            Florida                                      59-0877638
(State or other jurisdiction of                      (I.R.S. Employer
incorporation or organization)                       Identification No.)


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


Registrant's telephone number, including area code,      (954) 377- 1961


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been the subject to such filing
requirements for the past 90 days.
Yes  [X]   No [_]

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

   Large accelerated filer [_]  Accelerated filer [ ]  Non-accelerated [X]

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

Indicate the number of shares outstanding of each of the issuers classes of
Common Stock as of the latest practicable date. On February 14, 2006, 1,879,595
shares of Common Stock, $0.10 par value, were outstanding.

                                      -1-
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                               INDEX TO FORM 10-Q

                                DECEMBER 31, 2005


PART I. FINANCIAL INFORMATION

Item 1.    UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

            Consolidated Statements of Income -- For the Thirteen Weeks ended
            December 31, 2005 and January 1, 2005. (Unaudited)

            Consolidated Balance Sheets -- As of December 31, 2005 (Unaudited)
            and October 1, 2005.

            Consolidated Statements of Cash Flows- For the Thirteen Weeks ended
            December 31, 2005 and January 1, 2005. (Unaudited)

            Notes to Consolidated Financial Statements (Unaudited)

Item 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
            AND RESULTS OF OPERATIONS.

Item 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Item 4.     CONTROLS AND PROCEDURES


PART II. OTHER INFORMATION

Item 1.     Legal Proceedings

Item 2.     Unregistered Sales of Equity Securities and Use of Proceeds

Item 3.     Default upon Senior Securities

Item 4.     Submission of Matters to a Vote of Security Holders

Item 5.     Other Information

Item 6.     Exhibits and Reports on Form 8 K

Signatures

Exhibit - 31.1

Exhibit - 31.2

Exhibit - 32.1

Exhibit - 32.2


                                      -2-
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES
              UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                     (In Thousands Except Per Share Amounts)

                                                  Thirteen Weeks  Thirteen Weeks
                                                      Ended            Ended
                                                    DECEMBER 31      JANUARY 1
                                                       2005            2005
                                                   ------------    ------------
Revenues:
  Restaurant food sales                            $      7,394    $      6,598
  Restaurant beverage sales                               1,733           1,579
  Package goods sales                                     3,753           3,336
  Franchise-related revenues                                261             250
  Owner's fee                                                38              38
  Other operating income                                     70              24
                                                   ------------    ------------
                                                         13,249          11,825
                                                   ------------    ------------

Costs and Expenses:
 Cost of merchandise sold:
    Restaurants and lounges                               3,114           2,925
    Package goods                                         2,719           2,399
 Payroll and related costs                                3,534           3,123
 Occupancy costs                                            754             696
 Selling, general and administrative expenses             2,466           2,343
                                                   ------------    ------------
                                                         12,587          11,486
                                                   ------------    ------------

    Income from Operations                                  662             339
                                                   ------------    ------------

Other Income (Expense):
  Interest expense                                          (32)            (29)
  Interest and other income                                  21              23
  Insurance recovery, net of casualty loss                   45              --
                                                   ------------    ------------
                                                             34             (06)
                                                   ------------    ------------

Income Before Provision for Income Taxes and                696             333
  Minority Interests in Earnings of Consolidated
  Limited Partnerships

Provision for Income Taxes                                 (185)            (80)

Minority Interest in Earnings of
  Consolidated Limited Partnerships                        (148)            (13)
                                                   ------------    ------------
Net Income                                         $        363    $        240
                                                   ============    ============

                                      -3-
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES
              UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                     (In Thousands Except Per Share Amounts)

                                   (Continued)

                                                 December 31,     January 1,
                                                     2005            2005
Net Income Per Common Share:
   Basic                                          $     0.19      $     0.13
                                                  ==========      ==========
   Diluted                                        $     0.19      $     0.12
                                                  ==========      ==========

Weighted Average Shares and Equivalent
   Shares Outstanding:
      Basic                                        1,874,776       1,915,425
                                                  ==========      ==========
      Diluted                                      1,913,990       1,929,373
                                                  ==========      ==========

           See accompanying notes to unaudited condensed consolidated
                             financial statements.


                                      -4-
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS

                DECEMBER 31, 2005 (UNAUDITED) AND OCTOBER 1, 2005
                                 (In Thousands)

                                     ASSETS

                                                         DECEMBER 31   OCTOBER 1
                                                            2005         2005
                                                         ----------   ----------

Current Assets:

Cash and cash equivalents                                $    2,466   $    2,674
Marketable securities                                           322          353
Notes and mortgages receivable,
  current maturities, net                                        30           16
Due from franchisees                                            302          119
Other receivables                                               520          189
Inventories                                                   2,201        1,990
Prepaid expenses                                                594          721
Deferred tax asset                                               29           29
                                                         ----------   ----------

         Total Current Assets                                 6,464        6,091
                                                         ----------   ----------

Property and Equipment                                       13,531       13,127
                                                         ----------   ----------

Investments in Limited Partnerships                             121          122
                                                         ----------   ----------

Other Assets:

Liquor licenses, net                                            347          347
Notes and mortgages receivable, net                              99          116
Deferred tax asset                                              435          435
Other                                                           725          861
                                                         ----------   ----------
          Total Other Assets                                  1,606        1,759
                                                         ----------   ----------

          Total Assets                                   $   21,722   $   21,099
                                                         ==========   ==========

                                      -5-
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC, AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS

                DECEMBER 31, 2005 (UNAUDITED) AND OCTOBER 1, 2005

                      LIABILITIES AND STOCKHOLDERS' EQUITY
                                 (In Thousands)

                                                       DECEMBER 31   OCTOBER 1,
                                                          2005          2005
                                                       ----------    ----------

Current Liabilities:

Accounts payable and accrued expenses                  $    3,723    $    3,211
Due to franchisees                                            425           493
Current portion of long term debt                             177           174
Deferred revenues                                              60            62
Deferred rent                                                  14            14
                                                       ----------    ----------
         Total Current Liabilities                          4,399         3,954
                                                       ----------    ----------

Long Term Debt, Net of Current Maturities                   1,338         1,383
                                                       ----------    ----------

Deferred Rent, Net of Current
  Portion                                                     234           241
                                                       ----------    ----------

Minority Interest in Equity of
   Consolidated Limited Partnerships                        5,124         5,248
                                                       ----------    ----------
Stockholders' Equity:

  Common stock $.10 par value;
    5,000,000 shares authorized
    4,197,642 shares issued                                   420           420
  Capital in excess of par value                            6,170         6,148
  Retained earnings                                         9,835         9,472
  Accumulated other comprehensive income                       19            50
  Treasury stock, at cost 2,318,047 shares
    at December 31,2005 and 2,323,047
    shares at October 1, 2005                              (5,817)       (5,817)
                                                       ----------    ----------
       Total Stockholders' Equity                          10,627        10,273
                                                       ----------    ----------
       Total Liabilities and
        Stockholders' Equity                           $   21,722    $   21,099
                                                       ==========    ==========

           See accompanying notes to unaudited condensed consolidated
                             financial statements.

                                      -6-
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

            UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

       FOR THE THIRTEEN WEEKS ENDED DECEMBER 31, 2005 AND JANUARY 1, 2005
                                 (In Thousands)

                                                       DECEMBER 31    JANUARY 1
                                                          2005          2005
                                                       ----------    ----------
CASH FLOWS FROM OPERATING ACTIVITIES:

Net income                                             $      363    $      240
Adjustments to reconcile net income
  to net cash provided by operating
  activities:
  Depreciation and amortization                               430           378
  Deferred rent                                                (7)           --
  Casualty loss on property and equipment                      42            --
  Minority interest in earnings
    of consolidated limited partnerships                      148            13
  Recognition of deferred revenue                              (2)           (3)
  Changes in operating assets and liabilities:
      (Increase)decrease in:
           Due from franchisees                              (183)         (179)
           Other receivables                                 (331)           83
           Inventories                                       (211)         (271)
           Prepaid expenses                                   127          (126)
           Other assets                                      (214)          (62)
     Increase(decrease)in:
        Accounts payable and accrued expenses                 512           881
        Due to franchisees                                    (68)         (413)
                                                       ----------    ----------
       Net cash provided by
           operating activities                               606           541
                                                       ----------    ----------

Cash flows from Investing Activities:

  Collection on notes and mortgages
    receivable                                                  3            10
  Purchase of property and equipment                         (526)         (323)
  Distributions from unconsolidated
    Limited partnership                                         1             7
                                                       ----------    ----------
      Net cash used in
            investing activities                             (522)         (306)
                                                       ----------    ----------

                                      -7-
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

            UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

       FOR THE THIRTEEN WEEKS ENDED DECEMBER 31, 2005 AND JANUARY 1, 2005
                                 (In Thousands)

                                                       DECEMBER 31    JANUARY 1
                                                          2005          2005
                                                       ----------    ----------
Cash flows from Financing Activities:

  Payment of long term debt                                   (42)          (31)
  Proceeds from long term debt                                 --           163
  Purchase of treasury stock                                  (18)          (36)
  Distributions to limited partnership
    minority partners                                        (272)         (292)
  Proceeds from limited partnership interests                  --         1,365
  Proceeds from exercise of stock options                      40            --
                                                       ----------    ----------
Net cash provided by (used in) financing
  activities                                                 (292)        1,169
                                                       ----------    ----------

Net Increase (Decrease) in Cash and Cash
  Equivalents                                                (208)        1,404
Cash and Cash Equivalents,
  Beginning of Period                                       2,674         2,936
                                                       ----------    ----------
Cash and Cash Equivalents
  End of Period                                        $    2,466    $    4,340
                                                       ==========    ==========



Supplemental Disclosure for Cash Flow Information:
    Cash paid during period for:
       Interest                                        $       32    $       29
                                                       ==========    ==========
       Income taxes                                    $       80    $       79
                                                       ==========    ==========

           See accompanying notes to unaudited condensed consolidated
                             financial statements.

                                      -8-
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES
         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                DECEMBER 31, 2005


(1)   BASIS OF PRESENTATION:

      The accompanying  financial information for the periods ended December 31,
2005 and January 1, 2005 are unaudited.  Financial  information as of October 1,
2005 has been derived from the audited financial  statements of the Company, but
does not  include all  disclosures  required by  generally  accepted  accounting
principles. In the opinion of management, all adjustments,  consisting of normal
recurring  adjustments,  necessary  for a fair  presentation  of  the  financial
information  for  the  periods   indicated  have  been  included.   For  further
information   regarding  the  Company's  accounting   policies,   refer  to  the
Consolidated  Financial  Statements  and related notes included in the Company's
Annual Report on Form 10-K for the year ended October 1, 2005. Operating results
for interim periods are not necessarily indicative of results to be expected for
a full year.

(2)   EARNINGS PER SHARE:

      Statement of Financial Accounting Standards ("SFAS") No. 128, Earnings per
share  establishes  standards for computing  and  presenting  earnings per share
("EPS").  This statement requires the presentation of basic and diluted EPS. The
data on Page 4 shows the amounts  used in  computing  earnings per share and the
effects  on income  and the  weighted  average  number  of  shares of  potential
dilutive common stock equivalents.

(3)   RECLASSIFICATION:

      Certain  amounts  in  the  fiscal  2005  financial  statements  have  been
reclassified to conform to the fiscal 2006 presentation.

(4)   RECENT ACCOUNTING PRONOUNCEMENTS:

      Statement of  Financial  Accounting  Standards  No.  123(R),  "Share-Based
Payment" issued in December,  2004,  revised  Statement of Financial  Accounting
Standards  No. 123,  "Accounting  for  Stock-Based  Compensation",  and requires
companies  to expense  the fair value of stock  options on the grant date and is
effective  for interim or annual  periods  beginning  after  December  15, 2005.
Accordingly,  the Company is required to  recognize  the expense  attributed  to
stock options granted or vested  subsequent to January 1, 2006. As of January 1,
2006, the Company has no unvested stock options.

(5)   INVESTMENT IN LIMITED PARTNERSHIPS:

      Pinecrest, Florida

      As of September 28, 2002,  the Company,  plus a  wholly-owned  subsidiary,
owns one  hundred  (100%)  percent of the limited  partnership,  which owned and
operated the "Flanigan's Seafood Bar and Grill" restaurant in Miami, Florida. At
the end of the second quarter of fiscal year 2002, the hotel property upon which
the restaurant was located was `taken" through eminent domain and the restaurant
closed.

      During the third  quarter of fiscal  year 2003,  the  Company,  as general
partner of the limited  partnership,  entered into a Sale of Business  Agreement
for  the  purchase  of an  existing  restaurant  in  Pinecrest,  Florida,  which
transaction  closed during the first  quarter of fiscal year 2004.  The purchase
price of  approximately  $340,000  related to the  acquisition of a below market
lease and

                                      -9-
<PAGE>

will therefore be recognized as additional lease expense over the remaining life
of the lease, approximately 15.5 years including renewal options. As of December
31,  2005 the $340,000, net of accumulated amortization of approximately $5,300,
is  included  in  the  accompanying balance sheet in property and equipment. The
Company  agreed  to unconditionally guaranty the lease for the business premises
in  order to procure the consent of the landlord to the assignment of the lease.
During  the  second  quarter of fiscal year 2004 and after removing the interior
finishes  in anticipation of completing its building plans for the renovation of
the  business  premises,  the  Company  found  numerous,  substantial structural
deficiencies which must be rectified prior to any renovations being made.

      During the third  quarter of fiscal  year 2004,  the  Company,  as general
partner of the limited partnership,  and the landlord agreed upon the structural
repairs  required,  as set  forth by the  landlord's  engineering  firm,  and to
equally  share  the  cost  thereof  in order to  minimize  further  delay to the
renovation of the business premises.  During fourth quarter of fiscal year 2004,
the structural repairs were made by the landlord's  contractor.  Upon submitting
its building plans to Pinecrest, Florida for review and the issuance of building
plans, the Company was advised that there were structural  problems that had not
been addressed and other structural  problems that were not adequately  repaired
and that its building plans would not be reviewed until the structural  problems
were rectified.  The Company, as general partner of the limited partnership,  is
proceeding with the necessary structural repairs,  while preserving its right to
pursue a claim  against the  landlord  for its  contribution  to any  additional
structural  repairs and  reimbursement  of rent paid while the processing of its
building  plans is  delayed.  As of the end of the first  quarter of fiscal year
2006, the limited  partnership had received no payments from the landlord as its
contribution  towards structural repairs and/or reimbursement of rent paid while
the building plans of the limited  partnership  are delayed,  nor has it accrued
the same.  The landlord  denies any  liability  for further  structural  repairs
and/or  reimbursement  of rent  and as a  result,  the  ultimate  amount  of any
recovery from the landlord, if any, cannot be accurately estimated at this time.

      During the fourth  quarter of fiscal  year  2005,  building  permits  were
issued  to the  limited  partnership  to  make  the  structural  repairs,  which
structural  repairs should be completed during the second quarter of fiscal year
2006. The limited  partnership has received  permits for its interior  build-out
and is proceeding  with the same.  It is  anticipated  that once the  structural
repairs are completed, the remaining permits required by the limited partnership
will be issued and the  renovations  to the  business  premises  completed.  The
limited  partnership  still intends to raise funds through a private offering to
renovate the restaurant once the renovation costs have been  determined.  During
the first quarter of fiscal year 2006, the Company  advanced the sum of $246,000
to the limited  partnership,  the use of which included,  but was not limited to
architectural  and  engineering  fees and  structural  repairs made to date. The
Company  continues to act as a general  partner and will also be the owner of up
to thirty  three and  one-third  percent  limited  partnership  interest.  It is
anticipated  that the renovated  restaurant will be open for business during the
third quarter of fiscal year 2006.

      Surfside, Florida

      The Company acts as general  partner of a limited  partnership  which owns
and operates a restaurant in Surfside, Florida under the "Flanigan's Seafood Bar
and Grill"  service  mark.  With the  distribution  to limited  partners for the
quarter  ending  December  31,  2005,  which was paid at the start of the second
quarter of fiscal year 2006, this limited  partnership has received an aggregate
sum equal to the initial  investment of all limited partners from the net profit
from the  operation of the  restaurant.  Effective as of the start of the second
quarter of fiscal year 2006, the Company will receive  one-half (1/2) of the net
profit as manager of the restaurant.

                                      -10-
<PAGE>

      West Miami, Florida

      The Company acts as general  partner of a limited  partnership  which owns
and operates a restaurant in West Miami,  Florida under the "Flanigan's  Seafood
Bar and Grill" service mark. With the  distribution to limited  partners for the
quarter  ending  December  31,  2005,  which was paid at the start of the second
quarter of fiscal year 2006, this limited  partnership has received an aggregate
sum equal to the initial  investment of all limited partners from the net profit
from the  operation of the  restaurant.  During the first quarter of fiscal year
2006, the Company received one-half (1/2) of the net profit in excess of the sum
necessary  to  equal  the  initial  investment  of all  limited  partners,  as a
management fee and will continue to receive  one-half (1/2) of the net profit as
a management fee hereafter.

      Davie, Florida

      During  the first quarter of fiscal year 2006, the Company, as agent for a
limited  partnership  to  be  formed,  entered  into  a  contract to purchase an
existing restaurant in Davie, Florida to renovate and operate a restaurant under
the  "Flanigan's  Seafood  Bar  and  Grill"  servicemark.  The purchase price is
approximately  $650,000  and  initial  estimates for renovations and pre-opening
expenses  is  an  additional  $1,500,000.  The  funds necessary for this limited
partnership  will  be raised through a private offering. The Company will act as
general  partner  and  own  up to thirty percent of the limited partnership. The
contract  is  subject  to  customary contingencies, including but not limited to
landlord  approval  of  planned  renovations  and  the  Company applying for and
receiving  the  necessary zoning approvals, variances and/or special use permits
for its contemplated use. The restaurant is expected to open for business during
the first quarter of fiscal year 2007.


(6)   INVESTMENT IN MANAGEMENT AGREEMENT:

      Deerfield Beach, Florida

      During  the  first quarter of fiscal year 2006, the Company entered into a
management  agreement  to  operate  an  existing  restaurant in Deerfield Beach,
Florida  under  its  current  format,  "The  Whale's Rib", and to be entitled to
one-half (1/2) of the net profit from the operation of the same. The term of the
management  agreement is for ten (10) years, with four (4) five (5) year renewal
options.  During  the  first  quarter  of  fiscal  year 2006, the Company paid a
deposit  of  $50,000  towards  the management rights and on January 9, 2006, the
Company paid the remaining $450,000 for the management rights to the restaurant.
The  management  agreement  will be amortized straight line over the life of the
agreement  or  thirty  (30)  years,  including renewal options. The Company also
agreed  to  advance up to $250,000 for capital expenditures and working capital,
which  funds  will  be  reimbursed  from  net  profit  from the operation of the
restaurant  up  to  $125,000  per  year  before any sharing of net profit by the
Company  and the owner. The Company assumed the management of this restaurant on
January  9,  2006.  This location will not be renovated to a "Flanigan's Seafood
Bar and Grill" restaurant, nor will it be owned by a limited partnership.

(7)   INVESTMENTS:

      Investments in equity securities that have readily determinable values are
classified   and   accounted  for  as   available-for-sale.   Available-for-sale
securities are carried at fair value with  unrealized  gains and losses recorded
as a separate  component of accumulated  other  comprehensive  income.  Realized
gains and losses are calculated based on the specific  identification method and
recorded in "other  income" on the income  statement.  At December 31, 2005, the

                                      -11-
<PAGE>

fair value was  $322,000,  which  exceeded a cost of $303,000 and resulted in an
unrealized gain of $19,000.

(8)   INCOME TAXES:

      Financial  Accounting  Standards Board  Statement No. 109,  Accounting for
Income Taxes,  requires  among other things,  recognition of future tax benefits
measured at enacted  rates  attributable  to  deductible  temporary  differences
between  financial  statement and income tax basis of assets and liabilities and
to tax net  operating  loss  carryforwards  and tax  credits to the extent  that
realization of said tax benefits is more likely than not. The deferred tax asset
was $435,000 as of December 31, 2005 and October 1, 2005.

(9)   COMMITMENTS AND CONTINGENCIES:

      Guarantees

      The  Company   guarantees   various   leases  for   franchisees,   limited
partnerships  and locations sold in prior years.  Remaining  rental  commitments
required  under these  leases are  approximately  $2,809,000.  In the event of a
default  under  any of these  agreements,  the  Company  will  have the right to
repossess  the premises  and operate the business to recover  amounts paid under
the guarantee either by liquidating assets or operating the business.

      Litigation

      Certain states have liquor liability (dram shop) laws which allow a person
injured by an "obviously  intoxicated  person" to bring a civil suit against the
business  (or  social  host) who had served  intoxicating  liquors to an already
"obviously  intoxicated  person".  Dram shop  claims  normally  involve  traffic
accidents  and the Company  generally  does not learn of dram shop claims  until
after a claim is filed and then the Company  vigorously  defends these claims on
the grounds that its employee did not serve an "obviously  intoxicated  person".
Damages in most dram shop cases are substantial.  At the present time, there are
no dram shop cases pending against the Company.  The Company  maintains  general
liability insurance.  See Item 1, "Insurance" on page 13 of the Company's Annual
Report on Form 10-K for the fiscal year ended  October 1, 2005 for a  discussion
of general liability insurance.

      There is no  material  pending  legal  proceedings,  other  than  ordinary
routine litigation incident to the business,  none of which the Company believes
is material.

      Hurricane Wilma; Property Insurance Renewal

      On October 24, 2005,  Hurricane Wilma struck South Florida,  impacting all
locations  owned and/or  operated by the  Company,  including  franchises.  Most
locations  sustained damages,  but the corporate office was the only location to
suffer  significant  structural  damage.  All locations  lost electric power for
varying  periods of time. By October 29, 2005,  all Company owned and franchised
retail  liquor  stores  were  open  for  business,  notwithstanding  the loss of
electric  power,  and by  November  10,  2005,  all  restaurants  were  open for
business.

      The Company maintains standard and customary property insurance  coverage,
as well as coverage for business  interruption,  which  coverages are subject to
certain exclusions  related to damage caused by windstorm.  The insurance policy
insuring   locations  owned  by  the  Company  and  its   consolidated   limited
partnerships has a $50,000  deductible per occurrence.  As of December 31, 2005,
the Company had  submitted  claims for damages that it concludes  are covered by
the insurance totaling $523,000 and at the start of the second quarter of fiscal
year  2006,  received  an  advance  of  $250,000,  ($300,000  less  the  $50,000
deductible),  from its

                                      -12-
<PAGE>

insurance  carrier  on  account  of  damages to the corporate office alone. This
amount,  ($250,000),  has  been  recorded  in  other  receivables  and insurance
recovery  net  of  casualty  loss  in  the  accompanying  consolidated financial
statements.  Since the end of the first quarter of fiscal year 2006, the Company
has  submitted  additional  claims  totaling  $264,000  for  damages  caused  by
Hurricane  Wilma, (for total claims of $787,000 filed to date), and is preparing
claims  for  business  interruption. Notwithstanding the filing of these claims,
the  Company  has  not received a response from its insurance carrier other than
the  advance  of  $250,000  and as a result the ultimate amount of any insurance
recovery cannot be accurately estimated at this time.

      As indicated above, the Company's  property  insurance  coverage in effect
through  December 30, 2005 had one (1)  deductible of $50,000 for all locations.
For the policy  year  commencing  December  30,  2005,  the  Company's  property
insurance  now  has  a  deductible  of  $25,000  -  $50,000  per  location,  per
occurrence.  In the event a casualty, such as another hurricane,  impacted every
location  whereby  property damage and business  interruption  claims reached or
exceeded every deductible,  then the Company and its limited  partnerships would
face a maximum exposure of $825,000.  The Company intends to build cash reserves
during hurricane season, (June 1 - November 1 each year), to protect the Company
against  losses as a result of a hurricane or other casualty loss, as well as to
maintain a line of credit as additional protection against the same.

(10)  BUSINESS SEGMENTS

      The Company  operates  principally in two segments - retail package stores
and  restaurants.  The  operation of package  stores  consists of retail  liquor
sales.

      Information  concerning the revenues and operating income for the quarters
ended December 31, 2005 and January 1, 2005, and identifiable assets for the two
segments  in which  the  Company  operates,  are shown in the  following  table.
Operating  income is total revenue less cost of  merchandise  sold and operating
expenses relative to each segment.  In computing  operating income,  none of the
following items have been included: interest expense, other non-operating income
and expense and income  taxes.  Identifiable  assets by segment are those assets
that are used in the Company's operations in each segment.  Corporate assets are
principally cash, notes and mortgages receivable,  real property,  improvements,
furniture,  equipment  and  vehicles.  The Company does not have any  operations
outside of the United States and intersegment transactions are not material.

                                                      December 31,    January 1,
                                                          2005           2005
                                                          ----           ----
Operating Revenues:
   Restaurants                                         $    9,127    $    8,177
   Retail package stores                                    3,753         3,336
   Other revenues                                             369           312
                                                       ----------    ----------
      Total operating revenues                         $   13,249    $   11,825
                                                       ==========    ==========

Operating Income Reconciled to Income Before
  Income Taxes and Minority Interests in
  Earnings of Consolidated Limited
  Partnerships:
    Restaurants                                        $    1,118    $      658
    Retail package stores                                     333           195
                                                       ----------    ----------
                                                            1,451           853
    Corporate expenses, net of other
       Revenues                                              (789)         (514)
                                                       ----------    ----------

                                      -13-
<PAGE>

    Operating income                                          662           339
    Other income (expense)                                     34           (06)
                                                       ----------    ----------
Income Before Income Taxes and Minority
  Interests in Earnings of Consolidated
  Limited Partnerships                                 $      696    $      333
                                                       ==========    ==========


Depreciation and Amortization:
   Restaurants                                         $      293    $      281
   Retail package stores                                       55            31
                                                       ----------    ----------
                                                              348           312
   Corporate                                                   82            66
                                                       ----------    ----------
Total Depreciation and Amortization                    $      430    $      378
                                                       ==========    ==========

Capital Expenditures:
   Restaurants                                         $      173    $      251
   Retail package stores                                       22             9
                                                       ----------    ----------
                                                              195           260
   Corporate                                                  331            63
                                                       ----------    ----------
Total Capital Expenditures                             $      526    $      323
                                                       ==========    ==========

                                                       December 31,   October 1,
Identifiable Assets:                                      2005           2005
                                                          ----           ----

   Restaurants                                         $   10,042    $   10,277
   Retail package store                                     3,674         3,527
                                                       ----------    ----------
                                                           13,716        13,804
   Corporate                                                8,006         7,295
                                                       ----------    ----------
Consolidated Totals                                    $   21,722    $   21,099
                                                       ==========    ==========



Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS:

      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  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 the Annual  Report on Form 10-K for the  Company's  fiscal year
ended  October 1, 2005 and in this  Quarterly  Report on Form 10-Q.  The Company
undertakes  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.

      The Company owns and /or operates full service restaurants, package liquor
stores and an adult entertainment  oriented club (collectively the "units").  At
December 31,  2005,  the Company  operated 19 units and had equity  interests in

                                      -14-
<PAGE>

seven units which have been franchised by the Company.  The table below sets out
the changes, if any, in the type and number of units being operated.

                               Dec. 31       Oct.1         Jan. 1    Note
                                2005          2005          2005     Number
         Types of Units
  ---------------------------------------------------------------------------
  Company Owned:
     Combination package
     and restaurant                4            4            4
     Restaurant only               2            2            2
     Package store only            5            5            5        (1)

  Company Managed
    Restaurants Only:
     Limited partnerships          6            6            5        (2)(3)(4)
     Franchise                     1            1            1
     Unrelated Third Party        --           --           --        (5)

  Company Owned Club:              1            1            1

   Total Company
   Owned/Operated Units           19           19           18

  Franchised units                 7            7            7        (6)


Noes:

      (1) The corporate offices consist of a two (2) story building,  with space
initially set aside on the ground floor for a package liquor store.  The Company
filed suit against the adjacent shopping center to determine the Company's right
to  non-exclusive  parking in the  shopping  center.  During  fiscal  year 2005,
summary  judgment was granted in favor of the adjacent  shopping  center denying
the Company non-exclusive parking rights in the shopping center. The Company has
continued pursuing its claim against the seller, its individual partners and its
attorney for damages for failing to disclose documents pertaining to the release
of the  non-exclusive  parking  rights.  During the first quarter of fiscal year
2006, summary judgment was granted in favor of the sellers' attorney, but denied
as to the seller and its  individual  partners.  The case is scheduled for trial
during the third quarter of fiscal year 2006. The Company no longer plans to use
the ground floor for a package  liquor store.  This package  liquor store is not
included in the table of units.

      (2) During the third quarter of fiscal year 2003, the Company,  as general
partner of the limited  partnership,  entered into a Sale of Business  Agreement
for  the  purchase  of  an  existing  business  in  Pinecrest,   Florida,  which
transaction closed during the first quarter of fiscal year 2004. The Company, as
general  partner  of the  limited  partnership,  is  proceeding  with  necessary
structural  repairs,  while  preserving  its right to pursue a claim against the
landlord  for  its  contribution  to  the  additional   structural  repairs  and
reimbursement  of rent  paid  while  the  processing  of its  building  plans is
delayed. The structural repairs should be completed during the second quarter of
fiscal year 2006,  rather than the first quarter of fiscal year 2006.  While the
limited  partnership  has  received  permits for its interior  build-out  and is
proceeding with the same,  additional  structural  repairs have been required as
the interior build-out is being done. It is anticipated that once the structural
repairs are completed, the remaining permits required by the limited partnership
will be issued and the  renovations to the business  premises  completed.  It is
anticipated  that the renovated  restaurant will be open for business during the
third quarter of fiscal year 2006 and is not included in the table of units.

                                      -15-
<PAGE>

      (3) During the fourth  quarter of fiscal year 2004, a limited  partnership
was formed with the Company as general partner.  The limited partnership entered
into a lease  agreement to own and operate a restaurant in  Wellington,  Florida
under the  "Flanigan's  Seafood Bar and Grill"  service  mark.  During the first
quarter of fiscal year 2005,  the limited  partnership  raised  funds  through a
private  offering  to  renovate  the  business   premises  for  operation  as  a
"Flanigan's  Seafood  Bar and Grill"  restaurant.  The  Company  acts as general
partner  and  owns a  twenty  six  percent  limited  partnership  interest.  The
restaurant opened for business on May 27, 2005.

      (4) During the first  quarter of fiscal year 2006,  the Company,  as agent
for a limited  partnership to be formed,  entered into a contract to purchase an
existing  restaurant  location  in Davie,  Florida,  to  renovate  and operate a
restaurant  under  the  "Flanigan's  Seafood  Bar and  Grill"  servicemark.  The
restaurant  is expected to open for business  during the first quarter of fiscal
year 2007,  provided the landlord's approval of building plans and all necessary
zoning  approvals,  variances  and/or  special use permits  are  received.  This
restaurant is not included in the table of units.

      (5) During the first  quarter of fiscal 2006,  the Company  entered into a
management  agreement  to operate an existing  restaurant  in  Deerfield  Beach,
Florida under its current  format,  "The Whale's Rib".  The Company  assumed the
management  of this  restaurant  on January 9, 2006 and this  restaurant  is not
included in the table of units.

      (6) The Company manages the restaurant for one (1) franchisee with respect
to one (1) of the seven (7)  franchised  units.  The  franchised  restaurant  is
included in the table of units as a  restaurant  operated by the Company and the
franchise is also included as a unit  franchised by the Company and in which the
Company has an interest.

Results of Operations

                                                      Thirteen Weeks Ended
                                                Dec. 31,            Jan. 1,
                                                  2005               2005
                                            Amount    Percent   Amount   Percent
                                            ------    -------   ------   -------
                                            (In Thousands)       (In Thousands)

Restaurant food sales                      $ 7,394     57.41   $ 6,598     57.31
Restaurant bar sales                         1,733     13.45     1,579     13.71
Package goods sales                          3,753     29.14     3,336     28.98
                                           -------   -------   -------   -------

Total sales                                $12,880    100.00   $11,513    100.00

Franchise related revenues                     261                 250
Owners fee                                      38                  38
Other operating income                          70                  24
                                           -------             -------

Total Revenue                              $13,249             $11,825
                                           =======             =======

                                      -16-
<PAGE>

Comparison of Thirteen Weeks Ended December 31, 2005 and January 1, 2005
- ------------------------------------------------------------------------

      As the table above illustrates, total revenues in the thirteen weeks ended
December 31, 2005  increased by 12.04% as compared to the total revenues for the
thirteen  weeks  ended  January  1,  2005  primarily  due to the  restaurant  in
Wellington,  Florida  being open for the fiscal  quarter.  The increase in total
revenues  also  occurred  notwithstanding  an  estimated  loss  of  $550,000  in
restaurant  food and  beverage  revenue  as a result of  Hurricane  Wilma  which
impacted  South  Florida on October 24,  2005.  Total  revenues  are expected to
increase due to the restaurant in Wellington,  Florida being open for the entire
fiscal year; the management by the Company of the restaurant in Deerfield Beach,
Florida as of January 9, 2006 and the  anticipated  opening of the restaurant in
Pinecrest, Florida during the third quarter of fiscal year 2006.

      Restaurant  food sales  represented  57.41% of total sales in the thirteen
weeks of fiscal year 2006 as  compared to 57.31% of total sales in the  thirteen
weeks of fiscal  year 2005.  The weekly  average of same store  restaurant  food
sales were $423,433 and $411,792 for the thirteen  weeks ended December 31, 2005
and  January  1,  2005,  respectively,  an  increase  of 2.8%  The  increase  in
restaurant food sales is due to the restaurant in Wellington, Florida being open
for the quarter,  menu price increases and the continued  increase in the weekly
average  of  same  store   restaurant   food  sales.   This  increase   occurred
notwithstanding  an  estimated  loss of $450,000 in  restaurant  food sales as a
result of Hurricane Wilma. Restaurant food sales should continue to increase due
to the restaurant in Wellington,  Florida being open for the entire fiscal year;
the anticipated opening of the restaurant in Pinecrest, Florida during the third
quarter of fiscal year 2006; and the continued increase in the weekly average of
same store restaurant food sales.

      Restaurant  bar sales  represented  13.45% of total sales in the  thirteen
weeks of fiscal year 2006 as  compared to 13.71% of total sales in the  thirteen
weeks of fiscal year 2005. The weekly average of same store restaurant bar sales
were  $96,736 and $96,226 for the  thirteen  weeks ended  December  31, 2005 and
January 1, 2005, respectively,  an increase of 0.53%. The increase in restaurant
bar sales is due to the  restaurant  in  Wellington,  Florida being open for the
quarter  and the  promotions  introduced  during  fiscal  year 2005 to  increase
restaurant bar sales,  without jeopardizing the Company's perception as a family
restaurant.  This increase also occurred  notwithstanding  an estimated  loss of
$100,000 in restaurant beverage sales as a result of Hurricane Wilma. Restaurant
bar sales  should  continue to increase  due to the  restaurant  in  Wellington,
Florida being open for the entire fiscal year;  the  anticipated  opening of the
restaurant in Pinecrest,  Florida  during the third quarter of fiscal year 2006;
and the continued  increase in the weekly  average of same store  restaurant bar
sales.

      Package  goods sales  represented  29.14% of total  sales in the  thirteen
weeks of fiscal year 2006,  as compared to 28.98% of total sales in the thirteen
weeks of fiscal year 2005. The weekly average of same store package goods sales,
which now  includes  all nine (9)  Company  owned  package  goods  stores,  were
$288,661 and $256,584 for the thirteen weeks ended December 31, 2005 and January
1, 2005, respectively,  an increase of 12.50%. The increase was primarily due to
increased volume. Hurricane Wilma had no adverse affect upon package goods sales
because all  Company-owned  package good stores were open for business,  without
electric  power,  by October 26, 2005 or within two (2) days of Hurricane  Wilma
and notwithstanding curfews limiting hours of operation.  Package good sales are

                                      -17-
<PAGE>

expected to continue  increasing  through the balance of fiscal year 2006 due to
the continued increase in the weekly average of same store package sales.

      The gross profit margin for  restaurant  food and bar sales was 65.81% and
64.23% for the  thirteen  weeks  ended  December  31,  2005 and January 1, 2005,
respectively.  The 1.58%  increase in gross profit for  restaurant and bar sales
for the first quarter of fiscal 2006 was primarily due to menu price increases.

      The gross profit margin for package goods stores was 27.55% and 28.09% for
the thirteen  weeks ended  December 31, 2005 and January 1, 2005,  respectively.
The gross profit margin for package goods stores is expected to remain  constant
through the balance of fiscal year 2006.

Operating Costs and Expenses

      Operating  costs and expenses were  $12,587,000  and  $11,486,000  for the
thirteen  weeks ended  December 31, 2005 and January 1, 2005,  respectively,  an
increase of 9.56%.  The increase is due to the  operation of the  restaurant  in
Wellington,  Florida for the fiscal  quarter,  as well as a general  increase in
overall operating costs and expenses.  Operating costs and expenses are expected
to  continue  increasing  through  the  balance  of  fiscal  year  2006 with the
anticipated  opening of the  restaurant in Pinecrest,  Florida  during the third
quarter of fiscal year 2006 and a general  increase in overall  operating  costs
and expenses.

      Payroll and related  costs were  $3,534,000  and  $3,123,000  the thirteen
weeks ended December 31, 2005 and January 1, 2005, respectively,  an increase of
13.16%.  The  increase is  attributed  to the  operation  of the  restaurant  in
Wellington,  Florida for the fiscal  quarter,  the impact of the Florida minimum
wage which was  effective  during the third  quarter of fiscal year 2005 and the
accrual of  officers'  bonus in fiscal  2006.  During the balance of fiscal year
2006 payroll and related  costs are expected to increase due to the  anticipated
opening of the  restaurant  in  Pinecrest,  Florida  during the third quarter of
fiscal 2006 and the  increase in the  Florida  minimum  wage by a cost of living
increase effective January 1, 2006.

      Occupancy costs which include rent, common area  maintenance,  repairs and
taxes were $754,000 and $696,000 for the thirteen  weeks ended December 31, 2005
and  January 1, 2005,  respectively,  an  increase  of 8.33%.  The  increase  is
accounted for by the payment of rent for the restaurant in  Wellington,  Florida
for the first quarter of fiscal 2006.

      Selling,   general  and   administrative   expenses  were  $2,466,000  and
$2,343,000  for the thirteen  weeks ended December 31, 2005 and January 1, 2005,
respectively,  an  increase  of 4.74%.  The  increase  in  selling,  general and
administrative  expense is accounted for by the  operation of the  restaurant in
Wellington,  Florida  for the  fiscal  quarter;  expenses  associated  with  the
restaurant in Pinecrest, Florida; and an overall increase in expenses.

Other Income and Expense

      Other  income  and  expenses  were  income of $34,000  for fiscal  2006 as
compared to an expense of $6,000 for fiscal year 2005. Other income and expenses
includes insurance  recovery,  net of casualty loss, which includes the deletion
of the net book value of property and equipment as a result of Hurricane  Wilma,
($42,000),  repair of  damage  ($102,000)  and food  waste  ($61,000)  caused by
Hurricane  Wilma,  offset by an advance of  $250,000,  ($300,000  less a $50,000
deductible),  from the Company's insurance carrier against anticipated insurance
recoveries.

                                      -18-
<PAGE>

New Limited Partnership Restaurants

      As the Company opens new limited partnership restaurants on a more regular
basis the Company's  income from  operations  will be adversely  affected by the
higher costs  associated with the opening of the same. The higher costs include,
but are not limited to  pre-opening  rent. For the first quarter of fiscal 2006,
as well as the first  quarter  of fiscal  2005,  the  pre-opening  rent paid and
expensed for the new limited  partnership  restaurant in Pinecrest,  Florida was
approximately $51,000, which is the full rent provided in the lease.

      During the balance of fiscal year 2006,  income  from  operations  will be
adversely  affected by the  pre-opening  costs still to be incurred  for the new
limited partnership restaurant in Pinecrest, Florida.

Trends

      During the next twelve months management  expects  continued  increases in
restaurant  sales,  due primarily to the opening of the restaurant in Pinecrest,
Florida and continued  increases in same store  restaurant  sales.  Package good
sales are also  expected to increase  due  primarily  to increases in same store
package goods sales. At the same time,  management expects higher food costs and
overall  expenses to increase.  The Company has already  raised some of its menu
prices  to  offset  higher  food  costs  and  will  continue  to do so  wherever
competitively  possible.  During the next twelve months,  management projects an
increase in overall profit before income tax.

Liquidity and Capital Resources

Cash Flows

      The following table is a summary of the Company's cash flows for the first
thirteen weeks of fiscal years 2006 and 2005.

                                                         Thirteen Weeks Ended
                                                        Dec. 31,       Jan. 1,
                                                          2005          2005
                                                          ----          ----
                                                           (In Thousands)
Net cash provided by
  operating activities                                 $      606    $      541

Net cash provided by (used in)
  investing activities                                       (522)         (306)

Net cash provided by (used in)
  financing activities                                       (292)        1,169
                                                       ----------    ----------

Net Increase (Decrease) in Cash and
  Cash Equivalents                                           (208)        1,404
Cash and Cash Equivalents, Beginning                        2,674         2,936
                                                       ----------    ----------

Cash and Cash Equivalents, Ending                      $    2,466    $    4,340
                                                       ==========    ==========

      On January 13, 2006, the Company  declared a cash dividend of 35 cents per
share  payable on  February  15, 2006 to  shareholders  of record on January 31,
2006.  Since the dividend was only  declared  subsequent to the end of the first
quarter of fiscal year 2006, the amount is not reflected above.

                                      -19-
<PAGE>

      On December 9, 2004, the Company  declared a cash dividend of 32 cents per
share payable on January 28, 2005 to the  shareholders  of record on January 14,
2005.  Since the dividend was declared  during the first  quarter of fiscal year
2005, the amount is reflected above.

Capital Expenditures

      The Company had additions to property and equipment of $526,000 during the
thirteen weeks ended December 31, 2005, including $101,000 as a direct result of
Hurricane Wilma, as compared to $323,000 for the thirteen weeks ended January 1,
2005 and $2,095,000 for the fiscal year ended October 1, 2005. During the fiscal
year ended October 1, 2005, the Company also purchased  three (3) vehicles,  for
an aggregate purchase price of $302,000, which vehicles were 100% financed.

      All  of  the  Company's  units  require  periodic refurbishing in order to
remain  competitive.  The  budget for fiscal year 2006 is $700,000, exclusive of
any  expenditures  attributed  to Hurricane Wilma. The Company expects the funds
for  these  improvements  to  be  provided  from  operations. In addition, it is
anticipated that one (1) limited partnership, (Pinecrest, Florida), will require
approximately  $2,000,000  in  additional  funds  for  capital  expenditures  to
complete  its  renovations  and prepare for opening as a "Flanigan's Seafood Bar
and  Grill"  restaurant,  which funds will be raised through a private offering.
The private offering will also raise funds to reimburse the Company for advances
made in excess of its planned investment in this limited partnership.

Long Term Debt

      As of December 31, 2005, the Company had long term debt of $1,515,000,  as
compared to  $1,445,000 as of January 1, 2005,  and  $1,557,000 as of October 1,
2005.

      Subsequent  to  the  end  of the first quarter of fiscal 2006, the Company
closed  on  a  $2,000,000  line  of  credit.  The  line of credit has a variable
interest  rate,  which  is  at  prime  and is payable in monthly installments of
interest  only  on  the  outstanding  principal  balance,  with  a  two (2) year
maturity.  The line of credit will provide cash flow while the Company waits for
reimbursement  from its insurance carrier of all or a part of the costs incurred
to  repair  damages  and  business  interruption  caused  by Hurricane Wilma and
further  advances  to  be  made  by  the  Company  to  the  limited partnership,
(Pinecrest,  Florida),  for  the  completion  of  its  renovations  prior to its
anticipated  private  offering.  The line of credit does not prohibit dividends,
provided the Company is not in default of the same.

Working Capital

      The table below summarizes the current assets,  current  liabilities,  and
working capital for the fiscal quarters ended December 31, 2005, January 1, 2005
and the fiscal year ended October 1, 2005.

                          Dec. 31,       Jan. 1,      Oct. 1,
     Item                   2005          2005         2005
                          --------      --------     --------
                                     (In Thousands)

Current Assets             $6,464        $7,800       $6,091
Current Liabilities         4,399         4,900        3,954
Working Capital             2,065         2,900        2,137

      Working  capital for the fiscal quarter ending December 31, 2005 decreased
by 28.8% from the working  capital for the fiscal quarter ending January 1, 2005

                                      -20-
<PAGE>

and by 3.4% from the working capital for the fiscal year ending October 1, 2005.
Working  capital for the fiscal quarter ending December 31, 2005 would have been
greater, but the Company suffered a loss of restaurant food and beverage revenue
as a result of Hurricane  Wilma and the cost of repairs to damages caused by the
same, while the Company waits for  reimbursement of all or a part of such losses
from its  insurance  carrier.  The  decrease  in working  capital for the fiscal
quarter  ending  December 31, 2005 when  compared to the fiscal  quarter  ending
January 1, 2005 was also due to the  completion  of the private  offering by the
limited  partnership  owning the  restaurant in  Wellington,  Florida during the
first quarter of fiscal year 2005 and minimal  advances in excess of the monthly
rent paid by the Company as on-going  expenses for the  restaurant in Pinecrest,
Florida during the first quarter of fiscal year 2005.

      Subsequent to the end of the first quarter of fiscal year 2006, management
projects  that  working  capital  will  be  adversely affected by payment of the
balance  due  for the management rights to "The Whale's Rib", investments and/or
further  advances  to  be  made  by  the  Company  to the limited partnership in
Pinecrest,  Florida   and for the new location in Davie, Florida, payment of the
annual  dividend,  further  repair  of damages caused by Hurricane Wilma and the
closing  of  its  option  to  purchase the real property and ground lease of one
location  currently  leased  by the Company. In order to meet its immediate cash
flow  needs, subsequent to the end of the first quarter of fiscal year 2006, the
Company  received a $2,000,000 line of credit. Management believes that over the
balance  of  fiscal  year  2006,  working capital will increase by any insurance
recoveries  received,  as well as reimbursement of funds advanced by the Company
for  the  renovations  of  the restaurant in Pinecrest, Florida in excess of its
investment  once  the limited partnership completes its private offering. (As of
December  31,  2005,  the  Company  has  advanced  $1,381,000  to  this  limited
partnership and will invest no less than $700,000 in the same.)


Item 3. Quantitative and Qualitative Disclosures about Market Risk

      The Company does not ordinarily hold market risk sensitive instruments for
trading purposes but as of December 31, 2005 holds one equity security at a cost
of $303,000 to receive dividend  payments and for the Company to satisfy debt in
the future. There is no assurance that market price will increase or decrease in
the next year. Even if the price of the equity  security  decreased by 10% below
its  cost,  results  of  operations  would be  reduced  by  $30,000,  an  amount
management considers immaterial.

Interest Rate Risk

      At December 31, 2005, the Company has two debt  arrangements  which have a
variable  interest  rate.  For one of these  instruments,  a mortgage  note, the
Company has entered into an interest  rate swap  agreement to hedge the interest
rate risk.  The mortgage note has an outstanding  principal  balance at December
31, 2005 of $807,000. For the other instrument,  an unsecured promissory note in
the original  principal  amount of $100,000,  the variable  interest  rate is at
prime, so even if interest rates increased by 10%,  results of operations  would
be reduced by less than $10,000, an amount management also considers immaterial.

      At December  31, 2005,  the  Company's  cash  resources  earn  interest at
variable rates. Accordingly,  the Company's return on these funds is affected by
fluctuations  in interest  rates.  Any  decrease  in interest  rates will have a
negative effect on the Company's earnings.

      Subsequent  to the end of the first  quarter  of  fiscal  year  2006,  the
Company  received a $2,000,000 line of credit,  which  instrument has a variable
interest  rate,  which is at  prime.  Increases  in  interest  rates  may have a
material  affect upon  results of  operations,  depending  upon the  outstanding
principal balance on the line of credit from time to time.

                                      -21-
<PAGE>

      There is no assurance  that interest  rates will increase or decrease over
the next fiscal year.


Item 4.  Controls and Procedures

      (a)   Evaluation of Disclosure Controls and Procedures

      Within  the  ninety  (90) day  period  prior  to the end of the  reporting
period,  our President and Chief Financial  Officer,  with the  participation of
management  and the  assistance of an  independent  third party expert  retained
during  fiscal  2005,  evaluated  the  effectiveness  of  Company's  "disclosure
controls  and  procedures"  (as defined in the  Securities  Exchange Act of 1934
("Exchange Act") Rule 13a-15(e) or 15d-15(e)) as of December 31, 2005. It is the
opinion of our Chief  Executive  Officer and Chief  Financial  Officer that such
disclosure controls and procedures operate such that important information flows
to  appropriate  collection  and  disclosure  points in a timely  manner and are
effective in ensuring that material  information is accumulated and communicated
to management and made known to the Chief Executive  Officer and Chief Financial
Officer  particularly  during the period in which this report was  prepared,  as
appropriate, to allow timely decisions regarding timely disclosure. In designing
and evaluating the disclosure  controls and  procedures,  management  recognizes
that any system of controls  and  procedures,  no matter how well  designed  and
operated,  is subject to limitations,  including the exercise of our judgment in
evaluating the same. As a result,  there can be no assurance that our disclosure
controls and procedures will prevent all errors.

      (b)   Change in Internal Control over Financial Reporting

      During the first  quarter of fiscal year 2006,  the Company  continued  to
assess the effectiveness of our "internal controls over financial  reporting" on
an account by account basis as a part of our on-going  accounting  and financial
reporting  review process.  The assessments  were made by management,  under the
supervision of our Chief Financial  Officer.  We made no changes in our internal
control over financial  reporting  during the fiscal quarter ending December 31,
2005 that materially  affected,  or are reasonably likely to materially  affect,
the Company's internal control over financial  reporting.  Notwithstanding,  the
effectiveness  of our system of internal  control  over  financial  reporting is
subject to limitations, including the exercise of our judgment in evaluating the
same.  As a result,  there can be no assurance  that our  internal  control over
financial reporting will prevent all errors.


                           PART II - OTHER INFORMATION

Item 1 - Legal Proceedings:  See "Litigation" on page 12 of this report and Item
1 and Item 3 to Part 1 of the  Annual  Report on Form 10-K for the  fiscal  year
ended  October 1, 2005 for a discussion of other legal  proceedings  resolved in
prior years.

Item 2- Unregistered Sales of Equity Securities and Use of Proceeds:     None

Item 3- Defaults Upon Senior Securities:        None

Item 4- Submission of Matters to a Vote of Security Holders:    None

Item 5- Other Information:      None


                                      -22-
<PAGE>


Item 6- Exhibits and Reports on Form 8-K:

         (a) Exhibits:     Exhibits 31.1, 31.2, 32.1 and 32.2 (Certifications)
         (b) Form 8-K:     None

                                   SIGNATURES

      Pursuant to the  requirements  of the Securities and Exchange Act of 1934,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned  thereto duly  authorized.  The information  furnished  reflects all
adjustments to the statement of the results for the interim period.

                                     FLANIGAN'S ENTERPRISES, INC.

                                     /s/ James G. Flanigan
                                     ----------------------------------
                                     JAMES G. FLANIGAN,
                                     Chief Executive Officer and
                                        President

Date: February 15, 2006
      -----------------

                                     /s/ Jeffrey D. Kastner
                                     ----------------------------------
                                     JEFFREY D. KASTNER
Date: February 15, 2006              Chief Financial Officer and Secretary
      -----------------


                                      -23-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>2
<FILENAME>ex31-1.txt
<DESCRIPTION>EX-31.1
<TEXT>


31.1  CERTIFICATION  PURSUANT TO 18 U.S.C.  SECTION 1350 AS ADOPTED  PURSUANT TO
      SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002


I, James G. Flanigan, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Flanigan's Enterprises,
Inc. for the period ended December 31, 2005;

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

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

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

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

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

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

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

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

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


                                          /s/    James G. Flanigan
                                          -------------------------------------
                                          Name:  James G. Flanigan
                                          Chief Executive Officer and President
                                          Date:  February 15, 2006


                                      -24-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>3
<FILENAME>ex31-2.txt
<DESCRIPTION>EX-31.2
<TEXT>

31.2  CERTIFICATION  PURSUANT TO 18 U. S. C. SECTION 1350 AS ADOPTED PURSUANT TO
      SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002


I,  Jeffrey D. Kastner, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Flanigan's Enterprises,
Inc. for the period ended December 31, 2005.

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

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

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

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

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

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

5. The registrant's other certifying officers and I have disclosed, based on our
most recent  evaluation of internal control over financial,  to the registrant's
auditors and the audit committee or registrant's  board of directors (or persons
performing the equivalent function):

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

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

                                        /s/   Jeffrey D. Kastner
                                        -------------------------------------
                                        Name:  Jeffrey D. Kastner
                                        Chief Financial Officer and Secretary
                                        Date:  February 15, 2006


                                      -25-
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>4
<FILENAME>ex32-1.txt
<DESCRIPTION>EX-32.1
<TEXT>

32.1  CERTIFICATION  PURSUANT TO 18 U. S. C. SECTION 1350 AS ADOPTED PURSUANT TO
      SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


      In connection with the Quarterly Report of Flanigan's  Enterprises,  Inc.,
(the  "Company")  on Form 10-Q for the period ended  December 31, 2005, as filed
with the Securities and Exchange  Commission of the date hereof (the  "Quarterly
Report"),  I, James G. Flanigan,  Chief  Executive  Officer and President of the
Company,  certify,  pursuant to 18 U.S.C. SS.1350, as adopted pursuant to ss.906
of the Sarbanes-Oxley Act of 2002, that:

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

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

                              /s/ James G. Flanigan
                              -------------------------------------
                              Name:  James G. Flanigan
                              Chief Executive Officer and President
                              Date:  February 15, 2006

                                      -26-





</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.2
<SEQUENCE>5
<FILENAME>ex32-2.txt
<DESCRIPTION>EX-32.2
<TEXT>

32.2  CERTIFICATION PURSUANT TO 18 U. S. C. SECTION 1350, AS ADOPTED PURSUANT TO
      SECTION 906 OF THE SARBANES- OXLEY ACT OF 2002

      In connection with the Quarterly Report of Flanigan's  Enterprises,  Inc.,
(the  "Company")  on Form 10-Q for the period ended  December 31, 2005, as filed
with the Securities and Exchange  Commission of the date hereof (the  "Quarterly
Report"),  I,  Jeffrey D.  Kastner,  Chief  Financial  Officer  of the  Company,
certify,  pursuant to 18 U.S.C.  SS.1350,  as adopted  pursuant to ss.906 of the
Sarbanes-Oxley Act of 2002, that:

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

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

                             /s/ Jeffrey D. Kastner
                             -------------------------------------
                             Name:  Jeffrey D. Kastner
                             Chief Financial Officer and Secretary
                             Date:  February 15, 2006



                                      -27-
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
