UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
OR
For the transition period from____________ to ____________
Commission File Number
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification Number) | |
| (Address of principal executive offices) | (Zip Code) |
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol(s) | Name
of each exchange on which registered | ||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
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| Large accelerated filer ☐ | Accelerated filer ☐ | Smaller reporting
company |
|
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined
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As of February 9, 2026 there were
FLANIGAN’S ENTERPRISES, INC. AND SUBSIDIARIES
LIST XBRL DOCUMENTS
As used in this Quarterly Report on Form 10-Q, the terms “we,” “us,” “our,” the “Company” and “Flanigan’s” mean Flanigan’s Enterprises, Inc. and its subsidiaries (unless the context indicates a different meaning).
i
PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
FLANIGAN’S ENTERPRISES, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share and per share amounts)
| Thirteen Weeks Ended | ||||||||
| December 27, 2025 |
December 28, 2024 | |||||||
| REVENUES: | ||||||||
| Restaurant food sales | $ | $ | ||||||
| Restaurant bar sales | ||||||||
| Package store sales | ||||||||
| Franchise related revenues | ||||||||
| Other revenues | ||||||||
| COSTS AND EXPENSES: | ||||||||
| Cost of merchandise sold: | ||||||||
| Restaurant | ||||||||
| Package goods | ||||||||
| Payroll and related costs | ||||||||
| Operating expenses | ||||||||
| Occupancy costs | ||||||||
| Selling, general and administrative expenses | ||||||||
| Depreciation and amortization | ||||||||
| Income from Operations | ||||||||
| OTHER INCOME (EXPENSE): | ||||||||
| Interest expense | ( |
) | ( |
) | ||||
| Interest and other income | ||||||||
| Rental income | ||||||||
| Rental expense | ( |
) | ( |
) | ||||
| ( |
) | ( |
) | |||||
| Income before provision for income taxes | ||||||||
| Provision for income taxes | ( |
) | ( |
) | ||||
| Net Income | ||||||||
| Less: Net Income attributable to noncontrolling interests | ( |
) | ( |
) | ||||
| Net Income Attributable to Flanigan’s Enterprises Inc. Stockholders | $ | $ | ||||||
| Net Income Per Common Share: | ||||||||
| Basic and Diluted | $ | $ | ||||||
| Weighted Average Shares and Equivalent Shares Outstanding | ||||||||
| Basic and Diluted | ||||||||
See accompanying notes to unaudited condensed consolidated financial statements.
1
FLANIGAN’S ENTERPRISES, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
| Thirteen Weeks Ended | ||||||||
| December 27, | December 28, | |||||||
| 2025 | 2024 | |||||||
| Net Income: | $ | $ | ||||||
| Other comprehensive income: | ||||||||
| Change in fair value of interest rate swap, net of tax | ||||||||
| Total Comprehensive Income | $ | $ | ||||||
See accompanying notes to unaudited condensed consolidated financial statements.
2
FLANIGAN’S ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
DECEMBER 27, 2025 (UNAUDITED) AND SEPTEMBER 27, 2025
(in thousands, except share amounts)
| December 27, 2025 |
September 27, 2025 |
|||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Prepaid income taxes | ||||||||
| Other receivables | ||||||||
| Inventories | ||||||||
| Prepaid expenses | ||||||||
| Other current assets | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Construction in progress | ||||||||
| Right-of-use assets, operating leases | ||||||||
| Investment in limited partnerships | ||||||||
| Other Assets: | ||||||||
| Liquor licenses | ||||||||
| Leasehold interests, net | ||||||||
| Deposits on property and equipment | ||||||||
| Other | ||||||||
| Total other assets | ||||||||
| Total assets | $ | $ | ||||||
See accompanying notes to unaudited condensed consolidated financial statements.
3
FLANIGAN’S ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
DECEMBER 27, 2025 (UNAUDITED) AND SEPTEMBER 27, 2025
(in thousands, except share amounts)
(Continued)
| December 27, 2025 |
September 27, 2025 |
|||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Accrued compensation | ||||||||
| Due to franchisees | ||||||||
| Current portion of long-term debt | ||||||||
| Operating lease liabilities, current | ||||||||
| Other current liabilities | ||||||||
| Deferred revenue | ||||||||
| Total current liabilities | ||||||||
| Long-term debt, net of current portion | ||||||||
| Operating lease liabilities, non-current | ||||||||
| Deferred tax liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and Contingencies Note 9 | ||||||||
| Stockholders’ Equity: | ||||||||
| Flanigan’s Enterprises, Inc.’s Stockholders’ Equity | ||||||||
| Common stock, $ |
||||||||
| Capital in excess of par value | ||||||||
| Retained earnings | ||||||||
| Treasury stock, at cost, |
( |
) | ( |
) | ||||
| Total Flanigan’s Enterprises, Inc.’s Stockholders’ Equity | ||||||||
| Noncontrolling interests | ||||||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
See accompanying notes to unaudited condensed consolidated financial statements.
4
FLANIGAN’S ENTERPRISES, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS
OF STOCKHOLDERS’ EQUITY
FOR THE THIRTEEN WEEKS ENDED DECEMBER 27, 2025 AND DECEMBER 28, 2024
(in thousands, except share amounts)
| Common Stock | Capital in Excess of |
Retained | Treasury Stock | Noncontrolling | ||||||||||||||||||||||||||||||||
| Shares | Amount | Par Value | AOCI | Earnings | Shares | Amount | Interests | Total | ||||||||||||||||||||||||||||
| Balance, September 27, 2025 | $ | $ | $ | $ | $ | ( |
) | $ | $ | |||||||||||||||||||||||||||
| Net income | — | — | — | |||||||||||||||||||||||||||||||||
| Distributions to noncontrolling interests | — | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||||||
| Balance, December 27, 2025 | $ | $ | $ | $ | $ | ( |
) | $ | $ | |||||||||||||||||||||||||||
| Common Stock | Capital in Excess of |
Retained | Treasury Stock | Noncontrolling | ||||||||||||||||||||||||||||||||
| Shares | Amount | Par Value | AOCI | Earnings | Shares | Amount | Interests | Total | ||||||||||||||||||||||||||||
| Balance, September 28, 2024 | $ | $ | $ | ( |
) | $ | $ | ( |
) | $ | $ | |||||||||||||||||||||||||
| Net income | — | — | — | |||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | ||||||||||||||||||||||||||||||||
| Distributions to noncontrolling interests | — | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||||||
| Purchase of noncontrolling interest | — | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||||||
| Balance, December 28, 2024 | $ | $ | $ | $ | $ | ( |
) | $ | $ | |||||||||||||||||||||||||||
See accompanying notes to unaudited condensed consolidated financial statements.
5
FLANIGAN’S ENTERPRISES, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THIRTEEN WEEKS ENDED DECEMBER 27, 2025 AND DECEMBER 28, 2024
(in thousands)
| December 27, 2025 |
December 28, 2024 |
|||||||
| Cash Flows from Operating Activities: | ||||||||
| Net income | $ | $ | ||||||
| Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Amortization of leasehold interests | ||||||||
| Amortization of operating lease right-of-use assets | ||||||||
| Gain on interest rate swap | ( |
) | ||||||
| Loss on abandonment of property and equipment | ||||||||
| Amortization of deferred loan costs | ||||||||
| Income from unconsolidated limited partnership | ( |
) | ( |
) | ||||
| Changes in operating assets and liabilities: | ||||||||
| (Increase) decrease in: | ||||||||
| Other receivables | ( |
) | ( |
) | ||||
| Prepaid income taxes | ||||||||
| Inventories | ( |
) | ( |
) | ||||
| Prepaid expenses | ||||||||
| Other current assets | ( |
) | ||||||
| Other assets | ||||||||
| Increase (decrease) in: | ||||||||
| Accounts payable and accrued expenses | ||||||||
| Other current liabilities | ( |
) | ||||||
| Operating lease liabilities | ( |
) | ( |
) | ||||
| Due to franchisees | ( |
) | ( |
) | ||||
| Deferred revenue | ||||||||
| Net cash and cash equivalents provided by operating activities | ||||||||
| Cash Flows from Investing Activities: | ||||||||
| Purchase of property and equipment | ( |
) | ( |
) | ||||
| Purchase of construction in progress | ( |
) | ||||||
| Deposits on property and equipment | ( |
) | ( |
) | ||||
| Proceeds from sale of property and equipment | ||||||||
| Proceeds from insurance recovery | ||||||||
| Distributions from unconsolidated limited partnership | ||||||||
| Net cash and cash equivalents used in investing activities | ( |
) | ( |
) | ||||
See accompanying notes to unaudited condensed consolidated financial statements.
6
FLANIGAN’S ENTERPRISES, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THIRTEEN WEEKS ENDED DECEMBER 27, 2025 AND DECEMBER 28, 2024
(in thousands)
(Continued)
| December 27, 2025 |
December 28, 2024 |
|||||||
| Cash Flows from Financing Activities: | ||||||||
| Payments on long-term debt | ( |
) | ( |
) | ||||
| Payment of debt issuance costs | ( |
) | ||||||
| Purchase of noncontrolling limited partnership interest | ( |
) | ||||||
| Distributions to limited partnerships’ noncontrolling interests | ( |
) | ( |
) | ||||
| Net cash and cash equivalents used in financing activities | ( |
) | ( |
) | ||||
| Net Increase in Cash and Cash Equivalents | ||||||||
| Cash and Cash Equivalents - Beginning of Period | ||||||||
| Cash and Cash Equivalents - End of Period | $ | $ | ||||||
| Supplemental Disclosure for Cash Flow Information: | ||||||||
| Cash paid during the year for: | ||||||||
| Interest | $ | $ | ||||||
| Income taxes | $ | $ | ||||||
| Supplemental Disclosure of Non-Cash Investing and Financing Activities: | ||||||||
| Increase in fair value of interest rate swap | $ | $ | ||||||
| Purchase deposits capitalized to property and equipment | $ | $ | ||||||
See accompanying notes to unaudited condensed consolidated financial statements.
7
FLANIGAN’S ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THIRTEEN WEEKS ENDED DECEMBER 27, 2025 AND DECEMBER 28, 2024
(1) BASIS OF PRESENTATION:
The accompanying condensed consolidated financial information for the thirteen weeks ended December 27, 2025 and December 28, 2024 is unaudited. Financial information as of September 27, 2025 has been derived from the audited financial statements of Flanigan’s Enterprises, Inc., a Florida corporation, together with its subsidiaries, (the “Company”, “we”, “our”, “ours” and “us” as the context requires), but does not include all disclosures required by accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the financial information for the periods indicated have been included. For further information regarding the Company’s accounting policies, refer to the Consolidated Financial Statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended September 27, 2025. Operating results for interim periods are not necessarily indicative of results to be expected for a full year.
The condensed consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries and the accounts of the ten limited partnerships in which we act as general partner and have controlling interests. All intercompany balances and transactions have been eliminated. Non-controlling interest represents the limited partners’ proportionate share of the net assets and results of operations of the ten limited partnerships.
The consolidated financial statements and related disclosures for condensed interim reporting are prepared in conformity with accounting principles generally accepted in the United States. We are required to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities at the date of the financial statements. These estimates include assessing the estimated useful lives of tangible assets, the recognition of deferred tax assets and liabilities and estimates relating to the calculation of incremental borrowing rates and length of leases associated with right-of-use assets and corresponding liabilities, and estimates relating to loyalty reward programs and gift cards. Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in our condensed consolidated financial statements in the period they are determined to be necessary. Although these estimates are based on our knowledge of current events and actions we may undertake in the future, they may ultimately differ from actual results.
We adjusted our condensed consolidated Statements of Income to correct rental income from Revenues to Other Income and rental expense from Operating, Occupancy and Selling, General and Administrative expenses to Other Expense. We believe this presentation more accurately reflects revenue generated from ancillary activity rather than revenue generated from core operations. Prior period amounts have been adjusted. This correction had no impact on reported results of operations.
(2) EARNINGS PER SHARE:
We follow Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Section 260 - “Earnings per Share”. This section provides for the calculation of basic and diluted earnings per share. The data on Page 1 shows the amounts used in computing earnings per share. As of December 27, 2025 and December 28, 2024, stock options or other potentially dilutive securities were outstanding and accordingly, there is no difference in basic and diluted per share amounts.
(3) RECENTLY ADOPTED AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS:
Recently Adopted
During the 13 weeks ended December 27, 2025 the Company did not adopt any new accounting pronouncements that had a material impact on our financial statements.
Recently Issued
In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which requires enhanced income tax disclosures, primarily related to standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. This ASU will be effective for the Company for our fiscal year 2026 annual reporting period, with the guidance applied either prospectively or retrospectively. Early adoption is permitted. We are currently evaluating the impact that the adoption of this ASU will have on our tax disclosures.
8
In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures” which requires disclosure of disaggregated information about certain income statement expense line items in the notes to the financial statements on an interim and annual basis. In January 2025, the FASB issued ASU 2025-01 clarifying the effective date of ASU 2024-03, which will be effective for the Company for our fiscal year 2028 annual reporting period, including interim periods within that fiscal year, with guidance applied either prospectively or retrospectively. Early adoption is permitted. We are currently evaluating the impact that the adoption of this ASU will have on our interim and consolidated financial statements.
In September 2025, the FASB issued ASU 2025-06, “Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40)” which eliminates all references to project stages and requires capitalization of software costs when: (i) management authorizes and commits to funding the software project, and (ii) it is probable the software project will be completed and used as intended, known as the “probable-to-completion recognition threshold.” Entities must consider whether there is significant uncertainty associated with the development activities of the software in determining if the threshold is met. In addition, the amendments in the update specify that property, plant and equipment disclosure requirements are required for capitalized internal-use software costs, regardless of financial statement presentation and also incorporate the recognition requirements for website-specific development costs. This ASU will be effective for the Company for our fiscal year 2029 annual reporting period, including interim periods within that fiscal year, with the guidance applied either prospectively, retrospectively, or via a modified prospective transition method. Early adoption is permitted. We are currently evaluating the impact that the adoption of this ASU will have on our interim and consolidated financial statements.
In December 2025, the FASB issued ASU 2025-11, “Interim Reporting (Topic 270): Narrow-Scope Improvements”, which clarifies the guidance in Topic 270 to improve the consistency of interim financial reporting. The ASU provides a comprehensive list of required interim disclosures and introduces a disclosure principle requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. This ASU will be effective for the Company for our fiscal year 2029 annual reporting period, including interim periods within that fiscal year, with the guidance applied either prospectively or retrospectively. Early adoption permitted. We are currently evaluating the impact that the adoption of this ASU will have on our interim and consolidated financial statements.
There are no other recently issued accounting pronouncements that we have not yet adopted that we believe will have a material effect on our financial statements.
(4) PURCHASE OF REAL PROPERTY:
During the third quarter of our fiscal year 2025,
we purchased the vacant real property located at 20971 Old Cutler Road, Cutler Bay, Florida 33189 (the “Cutler Bay Property”)
for a purchase price of $
(5) INCOME TAXES:
We account for our income taxes using FASB ASC
Topic 740, “Income Taxes”, which requires among other things, recognition of future tax benefits measured at enacted
rates attributable to deductible temporary differences between financial statement and income tax basis of assets and liabilities and
to tax net operating loss carryforwards and tax credits to the extent that realization of said tax benefits is more likely than not. The
Company’s income tax expense computed at the statutory federal rate of
On July 4, 2025, the One Big Beautiful Bill Act (Public Law No. 119-21) was signed into law. Among other provisions, the legislation includes certain tax incentives and regulatory changes applicable to businesses in the food service and hospitality industries. The legislation has multiple effective dates, with certain provisions effective in 2025 and others to be implemented through 2027. We continue to review the legislation to determine its potential impact.
9
(6) DEFERRED REVENUE:
Changes in deferred revenue on the unaudited condensed consolidated balance sheets were as follows:
| Loyalty Program | ||||||||||||||||||||||||
| Gift Cards | Holiday Promo |
Lunch Club |
Big Daddy Good Customer |
Other | Total | |||||||||||||||||||
| September 27, 2025 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Revenue deferred | ||||||||||||||||||||||||
| Revenue recognized | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||
| December 27, 2025 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| September 28, 2024 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Revenue deferred | ||||||||||||||||||||||||
| Revenue recognized | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||
| December 28, 2024 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
The Holiday Promo revenue recognized in Q1 2025 pertains to the breakage upon issuance of the promotional cards.
The Holiday Promo revenue recognized in Q1 2026 pertains to the variable transaction price adjusted for the probability of redemption.
(7) INSURANCE PREMIUMS:
During the first quarter of our fiscal year 2026,
for the policy year commencing December 30, 2025, we obtained coverage on the following general liability, auto, property, excess liability,
terrorism and cyber security policies with premiums totaling approximately $
(i) For the policy year beginning
December 30, 2025, our general liability insurance, excluding limited partnerships, is a one (1) year policy with our insurance carriers.
For the policy commencing December 30, 2025, the self-insured retention per occurrence is $
(ii) For the policy year beginning
December 30, 2025, the general liability insurance for our limited partnerships, including franchisees and the managed restaurant is a
one (1) year policy with our insurance carriers. For the policy commencing December 30, 2025, the self-insured retention per occurrence
is $
(iii) For the policy year
beginning December 30, 2025, our automobile insurance is a one (1) year policy. The one (1) year automobile insurance premium is in the
amount of $
(iv) For the policy year
beginning December 30, 2025, our property insurance is a one (1) year policy. The one (1) year property insurance premium is in the amount
of $
(v) For the policy year
beginning December 30, 2025, our excess liability insurance is a one (1) year policy. The one (1) year excess liability insurance premium
is in the amount of $
(vi) For the policy year beginning
December 30, 2025, our terrorism insurance is a one (1) year policy. The one (1) year terrorism insurance premium is in the amount of
$
(vii)
For the policy year beginning December 30, 2025, our cyber security insurance is a one (1) year policy. The one (1) year cyber security
insurance premium is in the amount of $
We paid the $
10
(8) DEBT:
During the first quarter of our fiscal year 2026,
we refinanced with our institutional lender, our mortgage loan encumbering the real property and improvements located at 12750 –
12790 S.W. 88th Street, Miami, Florida where our Flanigan’s Calusa Center and our limited partnership owned Flanigan’s Seafood
Bar and Grill restaurant operate (Store #70), without increasing the principal amount borrowed at this time ($
(9) COMMITMENTS AND CONTINGENCIES:
Master Service Agreement
During the first quarter of our fiscal year 2025, we entered into a new Master Services Agreement with our current major vendor for a period of one (1) year effective January 1, 2025, with Company options for four (4) one (1) year renewal options to extend the term of the same. In this new Master Service Agreement, as in our prior Master Service Agreements, we commit to purchase specific products through our current major vendor but are free to purchase other products through other vendors, provided no less than 80% of our overall product needs are purchased through our current major vendor. During the fourth quarter of our fiscal year 2025, we exercised the first one (1) year renewal option and extended the term of the Master Services Agreement for a period of one (1) year effective January 1, 2026.
ERP Contract
In the third quarter of our fiscal year 2024, we
entered into an agreement with Oracle, an unrelated third-party vendor for the licensing and support of NetSuite, a cloud-based Oracle
ERP solution to replace our general ledger. The agreement is for a period of five years at a fixed rate of approximately $
Leases
To conduct certain of our operations, we lease restaurant and package liquor store space in South Florida from unrelated third parties. Our leases have remaining lease terms of up to 46 years, some of which include options to renew and extend the lease terms for up to an additional 24 years. We presently intend to renew some of the extension options available to us and for purposes of computing the right-of-use assets and lease liabilities required by ASC 842, we have incorporated into all lease terms which may be extended, an additional term of the lesser of (i) the amount of years the lease may be extended; or (ii) 15 years.
Common area maintenance and property taxes are not considered to be lease components. Variable lease costs include amounts based on a percentage of gross sales in excess of specified levels. They are recognized when probable and are not included in determining the present value of our operating lease liability.
The components of lease expense are as follows:
| (in thousands) | ||||||||
| 13 Weeks | 13 Weeks | |||||||
| Ended December 27, 2025 |
Ended December 28, 2024 |
|||||||
| Operating Lease Expense, which is included in occupancy costs | $ | $ | ||||||
| Variable Lease Expense, which is included in occupancy costs | $ | $ | ||||||
11
| (in thousands) | ||||||||
| Classification on the Condensed Consolidated Balance Sheets | December 27, 2025 |
September 27, 2025 |
||||||
| Assets | ||||||||
| Operating lease assets | $ | $ | ||||||
| Liabilities | ||||||||
| Operating lease current liabilities | $ | $ | ||||||
| Operating lease non-current liabilities | $ | $ | ||||||
| Weighted Average Remaining Lease Term: | ||||||||
| Operating leases | ||||||||
| Weighted Average Discount: | ||||||||
| Operating leases | ||||||||
The following table outlines the minimum future lease payments for the next five years and thereafter:
| (in thousands) | ||||
| For fiscal year | Operating | |||
| 2026 (40 weeks remaining) | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Total lease payments (undiscounted cash flows) | ||||
| Less imputed interest | ( |
) | ||
| Total operating lease liabilities | $ | |||
Litigation
Our sale of alcoholic beverages subjects us to “dram shop” statutes, which allow an injured person to recover damages from an establishment that served alcoholic beverages to an intoxicated person. If we receive a judgment substantially in excess of our insurance coverage or if we fail to maintain our insurance coverage, our business, financial condition, operating results or cash flows could be materially and adversely affected. We currently have no “dram shop” claims.
From time to time, we are a party to various other claims, legal actions and complaints arising in the ordinary course of our business, including claims resulting from “slip and fall” accidents, claims under federal and state laws governing access to public accommodations, employment-related claims and claims from guests alleging illness, injury or other food quality, health or operational concerns. It is our opinion, after consulting with legal counsel, that all such matters are without merit or involve such amounts that an unfavorable disposition, some of which is covered by insurance, would not have a material adverse effect on our financial position or results of operations.
(10) BUSINESS SEGMENTS:
We operate in
reportable segments – package stores and restaurants. The operation of package stores consists of retail liquor sales and related
items.
12
Thirteen Weeks Ended December 27, 2025
(in thousands)
| Restaurant | Package | Corporate | Eliminations | Total | ||||||||||||||||
| REVENUES: | ||||||||||||||||||||
| Restaurant food sales | $ | $ | $ | $ | $ | |||||||||||||||
| Intersegment revenues | ( |
) | ||||||||||||||||||
| Restaurant bar sales | ||||||||||||||||||||
| Package goods sales | ||||||||||||||||||||
| TOTAL REVENUE: | ( |
) | ||||||||||||||||||
| COST OF MERCHANDISE SOLD: | ||||||||||||||||||||
| Cost of merchandise sold: | ||||||||||||||||||||
| Intersegment cost of merchandise sold | ( |
) | ||||||||||||||||||
| TOTAL COST OF MERCHANDISE SOLD: | ( |
) | ||||||||||||||||||
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| ADDITIONAL REVENUES: | ||||||||||||||||||||
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| TOTAL ADDITIONAL REVENUES: | ( |
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| TOTAL ADDITIONAL EXPENSES: | ( |
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| Income (Loss) from Operations | ( |
) | ( |
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| OTHER INCOME (EXPENSE): | ||||||||||||||||||||
| Interest expense | ( |
) | ( |
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| Interest and other income | ||||||||||||||||||||
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| Rental expense | ( |
) | ( |
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| Income (loss) before provision for income taxes: | ( |
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| Provision for income taxes | ( |
) | ( |
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| Net Income (Loss) | ( |
) | ( |
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| Less: Net Income attributable to noncontrolling interests | ( |
) | ( |
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| Net Income (Loss) Attributable to Flanigan’s Enterprises, Inc. | $ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||
13
Thirteen Weeks Ended December 28, 2024
(in thousands)
| Restaurant | Package | Corporate | Eliminations | Total | ||||||||||||||||
| REVENUES: | ||||||||||||||||||||
| Restaurant food sales | $ | $ | $ | $ | $ | |||||||||||||||
| Intersegment revenues | ( |
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| Package goods sales | ||||||||||||||||||||
| TOTAL REVENUE: | ( |
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| COST OF MERCHANDISE SOLD: | ||||||||||||||||||||
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| ADDITIONAL REVENUES: | ||||||||||||||||||||
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| Intersegment franchise-related revenues | ( |
) | ||||||||||||||||||
| Intersegment partnership income | ( |
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| TOTAL ADDITIONAL REVENUES: | ( |
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| ADDITIONAL EXPENSES: | ||||||||||||||||||||
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| TOTAL ADDITIONAL EXPENSES: | ( |
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| Income (Loss) from Operations | ( |
) | ( |
) | ||||||||||||||||
| OTHER INCOME (EXPENSE): | ||||||||||||||||||||
| Interest expense | ( |
) | ( |
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| Intersegment interest expense | ( |
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| Interest and other income | ||||||||||||||||||||
| Intersegment interest and other income | ( |
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| Rental income | ||||||||||||||||||||
| Intersegment rental income | ( |
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| Rental expense | ( |
) | ( |
) | ||||||||||||||||
| ( |
) | ( |
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| Income (loss) before provision for income taxes: | ( |
) | ( |
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| Provision for income taxes | ( |
) | ( |
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| Net Income (Loss) | ( |
) | ( |
) | ||||||||||||||||
| Less: Net Income attributable to noncontrolling interests | ( |
) | ( |
) | ||||||||||||||||
| Net Income (Loss) Attributable to Flanigan’s Enterprises, Inc. | $ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||
14
| (in thousands) | ||||||||
| Thirteen Weeks Ended | ||||||||
| December 27, | December 28, | |||||||
| 2025 | 2024 | |||||||
| Capital Expenditures: | ||||||||
| Restaurants | $ | $ | ||||||
| Package stores | ||||||||
| Corporate | ||||||||
| Consolidated Totals | $ | $ | ||||||
| (in thousands) | ||||||||
| December | September 27 | |||||||
| 27, 2025 | 2025 | |||||||
| Identifiable Assets: | ||||||||
| Restaurants | $ | $ | ||||||
| Package stores | ||||||||
| Corporate | ||||||||
| Consolidated Totals | $ | $ | ||||||
(11) SUBSEQUENT EVENTS:
Subsequent to the end of the first quarter of
our fiscal year 2026, we amended the lease for our limited partnership-owned restaurant in Surfside, Florida (Store #60). Effective January
1, 2026, we extended the term of our lease to ten (10) years or through December 31, 2035, which lease would otherwise have expired on
December 31, 2026, with no renewal options. The amended lease is at a fixed base rent with annual increases based upon the consumer price
increase, with both a minimum and maximum cap. The increase to our lease liability and right-of-use asset is approximately $
Subsequent events have been evaluated through the date the unaudited condensed financial statements were issued and except as described above no events required adjustments or disclosure.
15
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CAUTIONARY NOTE REGARDING LOOKING FORWARD STATEMENTS
Reported financial results may not be indicative of the financial results of future periods. All non-historical information contained in the following discussion constitutes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Words such as “anticipates, appears, expects, trends, intends, hopes, plans, believes, seeks, estimates, may, will,” and variations of these words or similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and involve a number of risks and uncertainties, including but not limited to 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 27, 2025. We undertake no obligation to publicly release the results of any revisions to these forward-looking statements that may reflect events or circumstances after the date of this report.
OVERVIEW
As of December 27, 2025, Flanigan’s Enterprises, Inc., a Florida corporation, together with its subsidiaries (“we”, “our”, “ours” and “us” as the context requires), (i) operates 32 units, consisting of restaurants, package liquor stores, combination restaurant/package liquor stores and a sports bar that we either own or have operational control over and partial ownership in; and (ii) franchises an additional five units, consisting of two restaurants (one of which we operate) and three combination restaurant/package liquor stores. The table below provides information concerning the type (i.e. restaurant, sports bar, package liquor store or combination restaurant/package liquor store) and ownership of the units (i.e. whether (i) we own 100% of the unit; (ii) the unit is owned by a limited partnership of which we are the sole general partner and/or have invested in; or (iii) the unit is franchised by us), as of December 27, 2025 and as compared to September 27, 2025. With the exception of “The Whale’s Rib,” a restaurant we operate but do not own, and “Brendan’s Sports Pub” a restaurant/bar we own, all of the restaurants operate under our service marks “Flanigan’s Seafood Bar and Grill” or “Flanigan’s” and all of the package liquor stores operate under our service marks “Big Daddy’s Liquors” or “Big Daddy’s Wine & Liquors”.
| December 27, 2025 |
September 27, 2025 |
|||||||
| TYPES OF UNITS | ||||||||
| Company Owned: | ||||||||
| Combination package liquor store and restaurant | 2 | 2 | ||||||
| Restaurant only, including sports bar | 9 | 9 | ||||||
| Package liquor store only | 9 | 9 | ||||||
| Company Managed Restaurants Only: | ||||||||
| Limited partnerships | 10 | 10 | ||||||
| Franchise | 1 | 1 | ||||||
| Unrelated Third Party | 1 | 1 | ||||||
| Total Company Owned/Operated Units | 32 | 32 | ||||||
| Franchised Units | 5 | 5 | (1) | |||||
Notes:
| (1) | We operate a restaurant for one (1) franchisee. This unit is included in the table both as a franchised restaurant, as well as a restaurant operated by us. |
Franchise Financial Arrangement: In exchange for 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.
16
Limited Partnership Financial Arrangement: We manage and control the operations of all restaurants owned by limited partnerships, except the Fort Lauderdale, Florida restaurant which is owned by a related franchisee. Accordingly, the results of operations of all limited partnership owned restaurants, except the Fort Lauderdale, Florida restaurant are consolidated into our operations for accounting purposes. The results of operations of the Fort Lauderdale, Florida restaurant are accounted for by us utilizing the equity method of accounting. In general, until the investors’ cash investment in a limited partnership (including any cash invested by us and our affiliates) is returned in full, the limited partnership distributes to the investors annually out of available cash from the operation of the restaurant up to 25% of the cash invested in the limited partnership, with no management fee paid to us. Any available cash in excess of the 25% of the cash invested in the limited partnership distributed to the investors annually, is paid one-half (½) to us as a management fee, with the balance distributed to the investors as a return of capital. Once the investors in the limited partnership have received, in full, amounts equal to their cash invested, an annual management fee is payable to us equal to one-half (½) of cash available to the limited partnership, with the other one half (½) of available cash distributed to the investors (including us and our affiliates), as a profit distribution. As of December 27, 2025, all limited partnerships, with the exception of the limited partnership which owns the restaurant in Sunrise, Florida (Store #85), which opened for business in March 2022 and the limited partnership which owns the restaurant in Miramar, Florida (Store #25), which opened for business in April 2023, have returned all cash invested and we receive an annual management fee equal to one-half (½) of the cash available for distribution by the limited partnership. In addition to receipt of distributable amounts from the limited partnerships, we receive a fee equal to 3% of gross sales for use of the service mark “Flanigan’s Seafood Bar and Grill” or “Flanigan’s”.
RESULTS OF OPERATIONS
| Thirteen Weeks Ended | ||||||||||||||||
| December 27, 2025 | December 28, 2024 | |||||||||||||||
| Amount | Amount | |||||||||||||||
| (in thousands) | Percent | (in thousands) | Percent | |||||||||||||
| Restaurant food sales | $ | 30,932 | 59.41 | $ | 29,126 | 58.81 | ||||||||||
| Restaurant bar sales | 7,855 | 15.08 | 7,962 | 16.08 | ||||||||||||
| Package store sales | 13,285 | 25.51 | 12,435 | 25.11 | ||||||||||||
| Total Sales | $ | 52,072 | 100.00 | $ | 49,523 | 100.00 | ||||||||||
| Franchise related revenues | 438 | 431 | ||||||||||||||
| Other revenues | 58 | 41 | ||||||||||||||
| Total Revenue | $ | 52,568 | $ | 49,995 | ||||||||||||
Comparison of Thirteen Weeks Ended December 27, 2025 and December 28, 2024.
Revenues. Total revenue for the thirteen weeks ended December 27, 2025 increased $2,573,000 or 5.15% to $52,568,000 from $49,995,000 for the thirteen weeks ended December 28, 2024 due primarily to increased package liquor store and restaurant sales and increased menu prices. Effective February 23, 2025, we increased our menu prices for our bar offerings to target an increase to our bar revenues of approximately 0.84% annually. Effective December 4, 2024, we increased our menu prices for our bar offerings to target an increase to our bar revenues of approximately 4.90% annually and effective November 17, 2024 we increased our menu prices for our food offerings to target an increase to our food revenues of approximately 4.14% annually (collectively the “Recent Price Increases”).
Restaurant Food Sales. Restaurant revenue generated from the sale of food, including non-alcoholic beverages, at restaurants totaled $30,932,000 for the thirteen weeks ended December 27, 2025 as compared to $29,126,000 for the thirteen weeks ended December 28, 2024. The increase in restaurant food sales during the thirteen weeks ended December 27, 2025 as compared to restaurant food sales during the thirteen weeks ended December 28, 2024 is attributable to the Recent Price Increases and increased restaurant traffic. Comparable weekly restaurant food sales for restaurants open for all of the thirteen weeks ended December 27, 2025 and December 28, 2024 respectively, which consists of eleven restaurants owned by us and ten restaurants owned by affiliated limited partnerships was $2,356,000 and $2,221,000 for the thirteen weeks ended December 27, 2025 and December 28, 2024, respectively, an increase of 6.08%. Comparable weekly restaurant food sales for Company-owned restaurants was $1,070,000 and $995,000 for the thirteen weeks ended December 27, 2025 and December 28, 2024, respectively, an increase of 7.54%. Comparable weekly restaurant food sales for affiliated limited partnership owned restaurants only was $1,286,000 and $1,226,000 for the thirteen weeks ended December 27, 2025 and December 28, 2024, respectively, an increase of 4.89%. We expect that restaurant food sales, including non-alcoholic beverages, for the balance of our fiscal year 2026 will increase due to the increased restaurant traffic.
17
Restaurant Bar Sales. Restaurant revenue generated from the sale of alcoholic beverages at restaurants totaled $7,855,000 for the thirteen weeks ended December 27, 2025 as compared to $7,962,000 for the thirteen weeks ended December 28, 2024. The decrease in restaurant bar sales during the thirteen weeks ended December 27, 2025 is primarily due to the softening of alcohol consumption at our restaurants. Comparable weekly restaurant bar sales for restaurants open for all of the thirteen weeks ended December 27, 2025 and December 28, 2024 respectively, which consists of eleven restaurants owned by us and ten restaurants owned by affiliated limited partnerships was $604,000 and $612,000 for the thirteen weeks ended December 27, 2025 and December 28, 2024, respectively, a decrease of 1.31%. Comparable weekly restaurant bar sales for Company-owned restaurants only was $267,000 and $273,000 for the thirteen weeks ended December 27, 2025 and December 28, 2024, respectively, a decrease of 2.20%. Comparable weekly restaurant bar sales for affiliated limited partnership owned restaurants only was $337,000 and $340,000 for the thirteen weeks ended December 27, 2025 and December 28, 2024, a decrease of 0.88%.
Package Store Sales. Revenue generated from sales of liquor and related items at package liquor stores totaled $13,285,000 for the thirteen weeks ended December 27, 2025 as compared to $12,435,000 for the thirteen weeks ended December 28, 2024, an increase of $850,000. This increase was primarily due to increased package liquor store traffic, including e-commerce sales. The weekly average of same store package liquor store sales, which includes eleven (11) Company-owned package liquor stores was $1,022,000 and $957,000 for the thirteen weeks ended December 27, 2025 and December 28, 2024, respectively, an increase of 6.79%. We expect that package liquor store sales for the balance of our fiscal year 2026 will increase due to increased package liquor store traffic, including from e-commerce.
Costs and Expenses. Costs and expenses (consisting of cost of merchandise sold, payroll and related costs, operating expenses, occupancy costs, selling, general and administrative expenses and depreciation and amortization), for the thirteen weeks ended December 27, 2025 increased $1,656,000 or 3.36% to $50,899,000 from $49,243,000 for the thirteen weeks ended December 28, 2024. The increase was primarily due to increased payroll and operating expenses partially offset by actions taken by management to reduce and/or control costs. We anticipate that our costs and expenses will continue to increase through the balance of our fiscal year 2026. Costs and expenses decreased as a percentage of total revenue to approximately 96.83% for the thirteen weeks ended December 27, 2025 from 98.50% for the thirteen weeks ended December 28, 2024.
Gross Profit. Gross profit is calculated by subtracting the cost of merchandise sold from sales.
Restaurant Food Sales and Bar Sales. Gross profit for food and bar sales for the thirteen weeks ended December 27, 2025 increased to $25,836,000 from $24,059,000 for the thirteen weeks ended December 28, 2024. Our gross profit margin for restaurant food and bar sales (calculated as gross profit reflected as a percentage of restaurant food and bar sales), increased to 66.61% for the thirteen weeks ended December 27, 2025 as compared to 64.87% for the thirteen weeks ended December 28, 2024 due primarily to the Recent Price Increases and certain lower food costs.
Package Store Sales. Gross profit for package store sales for the thirteen weeks ended December 27, 2025 increased to $3,320,000 from $2,954,000 for the thirteen weeks ended December 28, 2024. Our gross profit margin (calculated as gross profit reflected as a percentage of package liquor store sales), for package store sales was 24.99% for the thirteen weeks ended December 27, 2025 and 23.76% for the thirteen weeks ended December 28, 2024. We anticipate that the gross profit margin for package liquor store merchandise will increase slightly for the balance of our fiscal 2026.
Payroll and Related Costs. Payroll and related costs for the thirteen weeks ended December 27, 2025 increased $625,000 or 3.97% to $16,371,000 from $15,746,000 for the thirteen weeks ended December 28, 2024. Payroll and related costs for the thirteen weeks ended December 27, 2025 were higher due primarily to the increase to the Florida minimum wage. Payroll and related costs as a percentage of total revenue was 31.14 % for the thirteen weeks ended December 27, 2025 and 31.50% of total revenue for the thirteen weeks ended December 28, 2024.
Operating Expenses. Operating expenses (including but not limited to utilities, insurance, cleaning, credit card fees, supplies, security, and other costs closely related to operating restaurant and package stores) for the thirteen weeks ended December 27, 2025 increased $481,000 or 7.40% to $6,985,000 from $6,504,000 for the thirteen weeks ended December 28, 2024 due primarily to inflation and increases in expenses across all categories.
18
Occupancy Costs. Occupancy costs (consisting of percentage rent, common area maintenance, repairs, real property taxes, amortization of leasehold interests and rent expense associated with operating lease liabilities under ASC 842) for the thirteen weeks ended December 27, 2025 increased $156,000 or 8.39% to $2,015,000 from $1,859,000 for the thirteen weeks ended December 28, 2024.
Selling, General and Administrative Expenses. Selling, general and administrative expenses (consisting of general corporate expenses, including but not limited to advertising, professional costs, clerical and administrative overhead) for the thirteen weeks ended December 27, 2025 decreased $62,000 or 4.19% to $1,416,000 from $1,478,000 for the thirteen weeks ended December 28, 2024 due primarily to lower consulting fees. Selling, general and administrative expenses decreased as a percentage of total revenue for the thirteen weeks ended December 27, 2025 to 2.69% as compared to 2.96% for the thirteen weeks ended December 28, 2024.
Depreciation and Amortization. Depreciation and amortization expense for the thirteen weeks ended December 27, 2025 increased $50,000 or 4.36% to $1,196,000 from $1,146,000 for the thirteen weeks ended December 28, 2024. Depreciation and amortization decreased as a percentage of total revenue for the thirteen weeks ended December 27, 2025 to 2.28% as compared to 2.29% for the thirteen weeks ended December 28, 2024.
Interest Expense, Net. Interest expense, net, for the thirteen weeks ended December 27, 2025 increased $3,000 to $253,000 from $250,000 for the thirteen weeks ended December 28, 2024.
Rental Income / Rental Expense. Rental income was $277,000 and rental expense was $134,000 for the thirteen weeks ended December 27, 2025, while rental income was $267,000 and rental expense was $161,000 for the thirteen weeks ended December 28, 2024. Previously, rental income was presented in Revenues and rental expense was presented in Occupancy costs, Operating expenses and Selling, general and administrative expenses, however, both rental income and rental expense are now presented in Other Income.
Income Taxes. Income tax expense for the thirteen weeks ended December 27, 2025 was $128,000 compared to $35,000 for the thirteen weeks ended December 28, 2024. This is primarily due to the tax expense that is anticipated based on the projected pre-tax income and permanent differences.
Net Income. Net income for the thirteen weeks ended December 27, 2025 increased $867,000 or 137.18% to $1,499,000 from $632,000 for the thirteen weeks ended December 28, 2024 due primarily to the Recent Price Increases, partially offset by overall increased expenses. As a percentage of revenue, net income for the thirteen weeks ended December 27, 2025 is 2.85% as compared to 1.26% for the thirteen weeks ended December 28, 2024.
Net Income Attributable to Flanigan’s Enterprises, Inc. Stockholders. Net income attributable to Flanigan’s Enterprises, Inc.’s stockholders for the thirteen weeks ended December 27, 2025 increased $750,000 or 1,363.64% to $805,000 from $55,000 for the thirteen weeks ended December 28, 2024 due primarily to the Recent Price Increases, partially offset by overall increased expenses. As a percentage of revenue, net income attributable to stockholders for the thirteen weeks ended December 27, 2025 is 1.53% as compared to 0.11% for the thirteen weeks ended December 28, 2024.
Menu Price Increases and Trends
During the second quarter of our fiscal year, 2025, we increased our menu prices for our bar offerings (effective February 23, 2025) to target an increase to our bar revenues of approximately 0.84% annually to offset higher food and liquor costs and higher overall expenses. During the first quarter of our fiscal year 2025, we increased our menu prices for our bar offerings (effective December 4, 2024) to target an increase to our bar revenues of approximately 4.90% annually and we increased our menu prices for our food offerings (effective November 17, 2024) to target an increase to our food revenues of approximately 4.14% annually to offset higher food and liquor costs and higher overall expenses. Prior to these increases we previously raised menu prices in the fourth quarter of our fiscal year 2024.
Liquidity and Capital Resources
We fund our operations through cash from operations and borrowings from third parties. As of December 27, 2025, we had cash and cash equivalents of approximately $22,967,000, an increase of $2,873,000 from our cash balance of $20,094,000 as of September 27, 2025. This increase is primarily due to the timing of cash receipts related to our holiday promotion.
In the fourth quarter of our fiscal year 2025, we paid $2.2 million for the purchase of undeveloped land in Cutler Bay, Florida for a future restaurant site. This acquisition reflects our ongoing investment in strategic expansion. While no construction has commenced as of the reporting date, site planning has begun and management anticipates capital expenditures related to site development and build-out in future fiscal quarters.
19
Inflation is affecting all aspects of our operations, including but not limited to food, beverage, fuel and labor costs. Supply chain issues also contribute to inflation. Inflation is having a material impact on our operating results.
We believe that our current cash availability from our cash on hand and positive cash flow from operations will be sufficient to fund our operations and planned capital expenditures for at least the next twelve months.
Cash Flows
The following table is a summary of our cash flows for the thirteen weeks ended December 27, 2025 and December 28, 2024.
| Thirteen Weeks Ended | ||||||||
| December 27, 2025 |
December 28, 2024 |
|||||||
| (in thousands) | ||||||||
| Net cash provided by operating activities | $ | 4,945 | $ | 7,701 | ||||
| Net cash used in investing activities | (887 | ) | (703 | ) | ||||
| Net cash used in financing activities | (1,185 | ) | (1,078 | ) | ||||
| Net Increase in Cash and Cash Equivalents | 2,873 | 5,920 | ||||||
| Cash and Cash Equivalents, Beginning | 20,094 | 21,402 | ||||||
| Cash and Cash Equivalents, Ending | $ | 22,967 | $ | 27,322 | ||||
We did not declare or pay a cash dividend on our capital stock in the first quarter of our fiscal year 2026 or the first quarter of our fiscal year 2025. Any future determination to pay cash dividends will be at our Board’s discretion and will depend upon our financial condition, operating results, capital requirements and such other factors as our Board deems relevant.
Capital Expenditures
In addition to using cash for our operating expenses, we use cash generated from operations and borrowings to fund the development and construction of new restaurants and to fund capitalized property improvements for our existing restaurants. During the thirteen weeks ended December 27, 2025, we acquired property and equipment of $595,000, (of which $32,000 was purchase deposits transferred to property and equipment), including $86,000 for renovations to three Company-owned locations. During the thirteen weeks ended December 28, 2024, we acquired property and equipment of $745,000, (of which $9,000 was purchase deposits transferred to property and equipment), including $87,000 for renovations to one (1) Company-owned package location.
We anticipate the cost of refurbishment in our fiscal year 2026 will be approximately $750,000, although capital expenditures for our refurbishing program for fiscal year 2026 may be significantly higher.
Long-Term Debt
As of December 27, 2025, we had long-term debt (including the current portion) of $20,260,000, as compared to $20,618,000 as of September 27, 2025.
During the first quarter of our fiscal year 2026, we refinanced with our institutional lender, our mortgage loan encumbering the real property and improvements located at 12750 – 12790 S.W. 88th Street, Miami, Florida where our Flanigan’s Calusa Center and our limited partnership owned Flanigan’s Seafood Bar and Grill restaurant operate (Store #70), without increasing the principal amount borrowed at this time ($5,676,856). The refinanced mortgage loan earns interest at a fluctuating rate per year equal to the sum of (i) the greater of the Term SOFR Daily Floating Rate or the Index Floor (which for purposes hereof is 0.00%) and (ii) 2.25%, with the first payment of principal and interest due January 31, 2026 and monthly thereafter on the last day of each month until November 30, 2030 when the entire principal payment and all accrued interest is due in full. We received no excess funds from the refinancing of this mortgage loan.
As of December 27, 2025, we are in compliance with all of the covenants contained in our loan agreements.
20
Purchase Commitments
In order to fix the cost and ensure adequate supply of baby back ribs for our restaurants for calendar year 2026, we entered into a purchase agreement with our existing rib supplier, whereby we agreed to purchase approximately $9.2 million of “2.5 & Down Baby Back Ribs” (weight range in which baby back ribs are sold) during calendar year 2026, at a prescribed cost, which we believe is competitive. For calendar year 2025, we entered into a purchase agreement with a new rib supplier, whereby we agreed to purchase approximately $7.8 million of “2.5 & Down Baby Back Ribs” during calendar year 2025, at a prescribed cost, which we believed was competitive. The increase in our cost of baby back ribs for calendar year 2026 compared to calendar year 2025 is due to an increase in market price and quantity ordered.
While we anticipate purchasing all of our rib supply from our current rib vendor, we believe there are several other alternative vendors available, if needed.
Master Service Agreement
During the first quarter of our fiscal year 2025, we entered into a new Master Services Agreement with our current major vendor for a period of one (1) year effective January 1, 2025, with Company options for four (4) one (1) year renewal options to extend the term of the same. In this new Master Service Agreement, as in our prior Master Service Agreements, we commit to purchase specific products through our current major vendor but are free to purchase other products through other vendors, provided no less than 80% of our overall product needs are purchased through our current major vendor. During the fourth quarter of our fiscal year 2025, we exercised the first one (1) year renewal option and extended the term of the Master Services Agreement for a period of one (1) year effective January 1, 2026.
Working Capital
The table below summarizes the current assets, current liabilities, and working capital for our fiscal quarter ended December 27, 2025, and our fiscal year ended September 27, 2025.
| Item | December 27, 2025 |
September 27, 2025 |
||||||
| (in thousands) | ||||||||
| Current Assets | $ | 33,045 | $ | 30,593 | ||||
| Current Liabilities | 20,064 | 18,118 | ||||||
| Working Capital | $ | 12,981 | $ | 12,475 | ||||
While there can be no assurance due to, among other things, unanticipated expenses or unanticipated decline in revenues, or both, we believe that our cash on hand and positive cash flow from operations will adequately fund operations, debt reductions and planned capital expenditures throughout our fiscal year 2026.
Off-Balance Sheet Arrangements
The Company does not have off-balance sheet arrangements.
Critical Accounting Policies and Estimates
We describe our significant accounting policies in Note 1. “Summary of Significant Accounting Policies” of our consolidated financial statements included in Item 8. “Financial Statements and Supplementary Data” of our Annual Report on Form 10-K for the fiscal year ended September 27, 2025.
Critical accounting estimates are those that we believe are both significant and require us to make difficult, subjective or complex judgments, often because we need to estimate the effect of inherently uncertain matters. We base our estimates and judgments on historical experiences and other assumptions that we believe are reasonable under the circumstances and we evaluate these estimates on an ongoing basis. Actual results may differ from these estimates and we might obtain different estimates if we use different assumptions or factors.
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Leases
We currently lease a portion of our restaurant and package locations under various lease agreements. Determining the probable term for each lease requires judgment by management and can impact the classification and accounting for a lease as financing or operating, as well as the period for straight-lined rent expense and the depreciation period for leasehold improvements. Generally, the lease term is a minimum of the noncancelable period of the lease or the lease term inclusive of reasonably certain renewal periods up to a term of 15 years. If the estimate of our reasonably certain lease term was changed, our depreciation and rent expense could differ materially. To determine the present value of lease payments not yet paid, we estimate incremental borrowing rates (IBR) corresponding to the reasonably certain lease term. The IBR is an estimate based on several factors, including financial market conditions, comparable company and credit analysis as well as management judgment. If the IBR was changed, our operating lease right-of-use assets and lease liabilities could differ materially.
Estimated Useful Lives of Property and Equipment
The estimates of useful lives for property and equipment are significant estimates. Expenditures for the leasehold improvements and equipment when a restaurant is first constructed are material. In addition, periodic refurbishing takes place and those expenditures can be material. We estimate the useful life of those assets by considering, among other things, expected use, life of the lease on the building, and warranty period, if applicable. The assets are then depreciated using a straight-line method over those estimated lives. These estimated lives are reviewed periodically and adjusted if necessary. Any necessary adjustment to depreciation expense is made in the income statement of the period in which the adjustment is determined to be necessary.
Valuation of Long-Lived Assets
We continually evaluate whether events and circumstances have occurred that may warrant revision of the estimated life of our intangible and other long-lived assets and/or whether the remaining balance of our intangible and other long-lived assets should be evaluated for possible impairment. If and when such factors, events or circumstances indicate that intangible and/or other long-lived assets should be evaluated for possible impairment, we will determine the fair value of the asset by making an estimate of expected future cash flows over the remaining lives of the respective assets and compare that fair value with the carrying value of the assets in measuring their recoverability. In determining the expected future cash flows, the assets will be grouped at the lowest level for which there are cash flows, at the individual store level.
Income Taxes
We account for our income taxes using FASB ASC Topic 740, “Income Taxes”, which requires among other things, recognition of future tax benefits measured at enacted rates attributable to deductible temporary differences between financial statement and income tax basis of assets and liabilities and tax credits to the extent that realization of said tax benefits is more likely than not. For discussion regarding our carryforwards refer to Note 10 in the consolidated financial statements for our fiscal year 2025.
Inflation
The primary inflationary factors affecting our operations are food, beverage and labor costs. A large number of restaurant personnel are paid at rates based upon applicable minimum wage and increases in minimum wage directly affect labor costs. Inflation is having a material impact on our operating results, especially rising food, fuel and labor costs. We have endeavored to offset the adverse effects of cost increases by increasing our menu prices.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
We do not ordinarily hold market risk sensitive instruments for trading purposes and as of December 27, 2025 held no equity securities.
Economic Risk
The current government administration has imposed changes in trade policy, including an increase in the use of tariffs which has resulted in retaliatory tariffs by other countries, shifts in immigration policies and international relations and changes to the overall regulation and enforcement by government agencies. We cannot predict the timing or impact, if any, of such actions.
Legislative and Regulatory Risk
On July 4, 2025, the One Big Beautiful Bill Act (Public Law No. 119-21) was signed into law. Among other provisions, the legislation includes certain tax incentives and regulatory changes applicable to businesses in the food service and hospitality industries. The legislation has multiple effective dates, with certain provisions implemented through 2027. We continue to review the legislation to determine its potential impact.
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Interest Rate Risk
As part of our ongoing operations, we are exposed to interest rate fluctuations on our borrowings. We use interest rate swap agreements to manage these risks. These instruments are not used for speculative purposes but are used to modify variable rate obligations into fixed rate obligations.
At December 27, 2025, we had one variable rate instrument outstanding that is impacted by changes in interest rates. In September 2022, we refinanced the mortgage loan encumbering the property where our combination package liquor store and restaurant located at 4 N. Federal Highway, Hallandale Beach, Florida, (Store #31) operates, which mortgage loan is held by an unaffiliated third-party lender (the “$8.90M Loan”). The interest rate of our variable rate debt instrument was equal to the lender’s BSBY Screen Rate plus one and one-half percent (1.50%) per annum. Effective November 15, 2024, the publication of BSBY was terminated and as of such date, the variable rate of interest under our debt instrument is equal to the lender’s 1 Month CME Term Secured Overnight Financing Rate (“SOFR”), plus 10 basis points, as an equivalent alternative approved by the lender. As of December 27, 2025 the variable interest rate was 6.08%.
As a means of managing our interest rate risk on this debt instrument, we entered into an interest rate swap agreement with an unrelated third-party lender in September 2022 to convert this variable rate debt obligation to a fixed rate. The $8.90M Term Loan Swap required us to pay interest for a fifteen (15) year period at a fixed rate of 4.90% on an initial amortizing notional principal amount of $8,900,000, while receiving interest for the same period at BSBY Screen Rate – 1 Month, plus 1.50%, on the same amortizing notional principal amount. We had previously determined that this interest rate swap agreement was an effective hedging agreement and we recorded changes in fair value to accumulated other comprehensive income each quarter from the fourth quarter of our fiscal year 2023 through the first quarter of our fiscal year 2025.
On November 22, 2024, we terminated the $8.90M Term Loan Swap and simultaneously entered into a new interest rate swap agreement for $8,015,601, the balance due on the $8.90M Loan, which requires us to pay interest for twelve (12) years, ten (10) months, which is the balance of the original fifteen (15) year period at a fixed rate of 4.90% on an initial amortizing notional principal amount of $8,015,601, while receiving interest for the same period at the lender’s 1 Month CME Term Secured Overnight Financing Rate (“SOFR”), plus 10 basis points, at the same amortizing notional principal amount. During the second quarter of our fiscal year 2025, we recognized the $290,000 of non-cash gains, net of tax, related to the above interest rate swap agreement as interest and other income. We determined that the new interest rate swap agreement is an economic hedge and beginning in the second quarter of our fiscal year 2025, we recognize the changes in fair value on our interest rate swap in interest and other income on our condensed consolidated statements of income.
During the thirteen weeks ended December 27, 2025, we had an aggregate principal amount of approximately $844,000 of 90-day government guaranteed certificates of deposit at fixed annual interest rates between 3.80% and 3.85%. Otherwise, at December 27, 2025, our cash resources offset our bank charges and any excess cash resources earn interest at variable rates. Accordingly, our return on these funds may be affected by fluctuations in interest rates.
There is no assurance that interest rates will increase or decrease over our next fiscal year or that an increase in interest rates will not have a material adverse effect on our operations.
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ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed with the U.S. Securities and Exchange Commission (the “SEC”) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
As of December 27, 2025, an evaluation was performed under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) to the Securities Exchange Act of 1934). Based on that evaluation, management, including our Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were effective as of December 27, 2025.
Remediation of Material Weakness in Internal Control Over Financial Reporting
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our interim or annual financial statements will not be prevented or detected on a timely basis.
During the course of our independent registered public accounting firm performing its quarterly review procedures in connection with our unaudited condensed consolidated financial statements for the first and second quarters of our fiscal year 2025, we became aware of certain errors made by management in recording revenues and deferred revenue liabilities pertaining to the package loyalty program and the restaurant promotional gift cards, which constituted a material weakness in our internal controls. This material weakness did not result in any material misstatements in our financial statements or disclosures, and there were no changes to previously released financial results.
As a result of this finding, during the first quarter of our fiscal year 2025, we began the process of addressing this material weakness by bolstering our internal controls over the recognition and review of deferred revenue. During the first quarter of our fiscal year 2026, these enhanced controls were implemented and evaluated by management and determined to be operating effectively as of the end of the first quarter of our fiscal year 2026. As such, we have concluded that our previously disclosed material weakness has been remediated.
Changes in Internal Control Over Financial Reporting
Apart from the changes above, during the fiscal quarter ended December 27, 2025, we have not made any additional changes to our internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
See “Litigation” in Note 9 of this Report and Item 1 and Item 3 to Part 1 of the Annual Report on Form 10-K for the fiscal year ended September 27, 2025 for a discussion of other legal proceedings resolved in prior years.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Purchase of Company Common Stock
During the thirteen weeks ended December 27, 2025 and December 28, 2024, we did not purchase any shares of our common stock. As of December 27, 2025, we still have authority to purchase 65,414 shares of our common stock under the discretionary plan approved by the Board of Directors at its meeting on May 17, 2007.
ITEM 5. OTHER INFORMATION.
During the thirteen weeks ended December 27, 2025,
none of the Company’s directors or officers (as defined in Rule 16a-1(f) under the Exchange Act)
ITEM 6. EXHIBITS
The following exhibits are filed with this Report:
| * | Filed herewith |
| ** | This certification is deemed not filed for purpose of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933 as amended or the Exchange Act. |
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SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| FLANIGAN’S ENTERPRISES, INC. | |
| Date: February 10, 2026 | /s/ James G. Flanigan |
| JAMES G. FLANIGAN, Chief Executive Officer | |
| /s/ Allison Govoni | |
| Allison Govoni, Chief Financial Officer | |
| (Principal Financial and Accounting Officer) |
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