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 July 1, 2006

                                       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 August 15, 2006,  1,889,365
shares of Common Stock, $0.10 par value, were outstanding.


                                       1
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES
                  ---------------------------------------------

                               INDEX TO FORM 10-Q
                               ------------------

                                  July 1, 2006
                                  ------------

                          PART I. FINANCIAL INFORMATION
                                  ---------------------

Item 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Consolidated  Statements  of Income -- For the  Thirteen  and Thirty  Nine Weeks
ended July 1, 2006 and July 2, 2005 (Unaudited)

Consolidated  Balance  Sheets -- As of July 1, 2006  (Unaudited)  and October 1,
2005.

Consolidated  Statements  of Cash Flows -For the Thirty Nine Weeks ended July 1,
2006 and July 2, 2005.

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 AND SIGNATURES
                             --------------------------------

Item 1. Legal Proceedings

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

Item 3. Defaults 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 8K

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)

<TABLE>
<CAPTION>
                                                     Thirteen Weeks        Thirty Nine Weeks
                                                         Ended                   Ended

                                                   July 1      July 2      July 1      July 2
                                                    2006        2005        2006        2005
                                                    ----        ----        ----        ----
<S>                                               <C>         <C>         <C>         <C>
REVENUES:
   Restaurant food sales                          $  8,405    $  7,550    $ 24,440    $ 21,499
   Restaurant bar sales                              1,943       1,641       5,669       4,928
   Package good sales                                3,036       2,718      10,228       9,127
   Franchise related revenues                          291         242         837         754
   Owner's fee                                          96         123         171         198
   Other operating income                               80          68         231         110
                                                  --------    --------    --------    --------
                                                    13,851      12,342      41,576      36,616
                                                  --------    --------    --------    --------

COSTS AND EXPENSES:
   Cost of merchandise sold:
     Restaurant and lounges                          3,495       3,207      10,232       9,303
     Package goods                                   2,175       1,945       7,343       6,549
   Payroll and related costs                         4,096       3,394      11,904       9,853
   Occupancy costs                                     769         716       2,306       2,081
   Selling, general and administrative expenses      2,662       2,364       7,958       7,177
                                                  --------    --------    --------    --------
                                                    13,197      11,626      39,743      34,963
                                                  --------    --------    --------    --------

Income from operations                                 654         716       1,833       1,653
                                                  --------    --------    --------    --------

OTHER INCOME (EXPENSE):
Interest expense                                       (53)        (28)       (124)        (86)
Interest and other income (expense)                     18         (20)         56          67
Loss on abandonment of property and equipment           (4)         --         (10)         --
Insurance recovery, net of casualty loss                (8)         --         442          --
                                                  --------    --------    --------    --------
                                                       (47)        (48)        364         (19)
                                                  --------    --------    --------    --------

Income before Provision for Income Taxes               607         668       2,197       1,634
   and Minority Interest in Earnings of
   Consolidated Limited Partnerships

Provision for Income Taxes                            (258)       (167)       (705)       (356)

Minority Interest in Earnings of
Consolidated Limited Partnerships                     (146)         (2)       (345)       (212)
                                                  --------    --------    --------    --------

Net Income                                        $    203    $    499    $  1,147    $  1,066
                                                  ========    ========    ========    ========
</TABLE>


                                       3
<PAGE>

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

                                   (Continued)

<TABLE>
<CAPTION>
                                             Thirteen Weeks           Thirty Nine Weeks
                                                  Ended                     Ended

                                           July 1       July 2,      July 1       July 2,
                                            2006         2005         2006         2005
                                            ----         ----         ----         ----
<S>                                      <C>          <C>          <C>          <C>
Net Income Per Common Share:
      Basic                              $     0.11   $     0.26   $     0.61   $     0.56
                                         ==========   ==========   ==========   ==========
      Diluted                            $     0.11   $     0.26   $     0.60   $     0.55
                                         ==========   ==========   ==========   ==========

Weighted Average Shares and Equivalent
      Shares Outstanding
        Basic                             1,893,486    1,884,547    1,882,690    1,901,615
                                         ==========   ==========   ==========   ==========
        Diluted                           1,920,472    1,911,980    1,908,085    1,925,299
                                         ==========   ==========   ==========   ==========
</TABLE>

See accompanying notes to unaudited condensed consolidated financial statements.


                                       4
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS

                  JULY 1, 2006 (UNAUDITED) AND OCTOBER 1, 2005
                                 (In Thousands)

                                     ASSETS

                                                          JULY 1       OCTOBER 1
                                                           2006          2005
                                                           ----          ----

Current Assets:

Cash and cash equivalents                                $  3,528      $  2,674
Marketable securities                                         297           353
Notes and mortgages receivables,
  current maturities, net                                      13            16
Due from franchisees                                          208           119
Other receivables                                             254           189
Inventories                                                 2,108         1,990
Prepaid expenses                                              913           721
Deferred tax asset                                             29            29
                                                         --------      --------
      Total Current Assets                                  7,350         6,091
                                                         --------      --------

Property and Equipment, Net                                14,229        13,127
                                                         --------      --------

Investment in Limited Partnership                             145           122
                                                         --------      --------
Other Assets:

Liquor licenses, net                                          347           347
Notes and mortgages receivable, net                           107           116
Deferred tax asset                                            461           435
Other                                                       1,728           861
                                                         --------      --------
      Total Other Assets                                    2,643         1,759
                                                         --------      --------
      Total Assets                                       $ 24,367      $ 21,099
                                                         ========      ========


                                       5
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC, AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS

                  JULY 1, 2006 (UNAUDITED) AND OCTOBER 1, 2005

                      LIABILITIES AND STOCKHOLDERS' EQUITY
                                 (In Thousands)

                                                          JULY 1,     OCTOBER 1,
                                                           2006          2005
                                                           ----          ----

Current Liabilities:

  Accounts payable and accrued expenses                  $  3,908      $  3,211
  Due to franchisees                                          448           493
  Current portion of long term debt                           157           174
  Deferred revenues                                            56            62
  Deferred rent                                                14            14
                                                         --------      --------
      Total Current Liabilities                             4,583         3,954
                                                         --------      --------

Long Term Debt, Net of Current Maturities                   1,286         1,383
Line of Credit                                                762            --
Deferred Rent, Net of Current Portion                         227           241
Minority Interest in Equity of
 Consolidated Limited Partnerships                          6,781         5,248

Commitments, Contingencies and Subsequent Events

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                            6,204         6,148
  Retained earnings                                         9,961         9,472
  Accumulated other comprehensive income (loss)                (6)           50
  Treasury stock, at cost, 2,308,277 shares
      at July 1, 2006 and 2,323,047
      shares at October 1, 2005                            (5,851)       (5,817)
                                                         --------      --------
      Total Stockholders' Equity                           10,728        10,273
                                                         --------      --------
    Total Liabilities and Stockholders' Equity           $ 24,367      $ 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 THIRTY NINE WEEKS ENDED JULY 1, 2006 AND JULY 2, 2005
                                 (In Thousands)

                                                             JULY 1     JULY 2
                                                              2006       2005
                                                            --------   --------

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income                                                  $  1,147   $  1,066
Adjustments to reconcile net income to net cash
   provided by operating activities:
   Depreciation and amortization                               1,321      1,030
   Loss on abandonment of property and equipment                  10         --
   Casualty loss                                                  64         --
   Deferred income tax                                           (26)        --
   Deferred rent                                                 (14)        --
   Minority interest in earnings of
      consolidated limited partnerships                          345        212
   (Income) Loss from unconsolidated limited partnership         (23)        --
   Recognition of deferred revenue                                (6)       (13)

   Changes in operating assets and liabilities:
      (Increase) decrease in
          Due from franchisees                                   (89)        --
          Other receivables                                      (65)      (238)
          Inventories                                           (118)      (523)
          Prepaid expenses                                      (192)        48
          Other assets                                          (938)        (3)
   Increase (decrease) in:
          Accounts payable and accrued expenses                  697        240
          Due to franchisees                                     (45)       111
                                                            --------   --------
          Net cash provided by operating activities            2,068      1,930
                                                            --------   --------

Cash Flows from Investing Activities:

      Collection on notes and mortgages receivable                12         19
      Purchase of property and equipment                      (2,356)    (1,367)
      Distributions from unconsolidated limitedpartnership        --         24
                                                            --------   --------
          Net cash used in investing activities               (2,344)    (1,324)


                                       7
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

            UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

          FOR THE THIRTY NINE WEEKS ENDED JULY 1, 2006 AND JULY 2, 2005
                                 (In Thousands)

<TABLE>
<CAPTION>
                                                                            JULY 1        JULY 2
                                                                             2006          2005
                                                                          ----------    ----------
<S>                                                                       <C>           <C>
Cash flows from Financing Activities:
   Payment of long term debt                                                    (184)         (262)
   Proceeds from long term debt                                                   --            11
   Proceeds from line of credit                                                  762            --
   Dividends paid                                                               (658)         (609)
   Purchase of treasury stock                                                    (95)         (334)
   Purchase of minority limited partnership interest                              (8)           --
   Distributions to limited partnership
       minority partners                                                        (809)         (774)
   Proceeds from limited partnership interests                                 2,005*        1,365**
   Proceeds from exercise of stock options                                       117             1
                                                                          ----------    ----------
Net cash provided by (used in) financing activities                            1,130          (602)
                                                                          ----------    ----------

Net Increase in Cash and Cash Equivalents,                                       854             4
   Beginning of Period                                                         2,674         2,936
                                                                          ----------    ----------
   End of Period                                                          $    3,528    $    2,940
                                                                          ==========    ==========

Supplemental Disclosure for Cash Flow Information:
   Cash paid during period for:
      Interest                                                            $      124    $       84
                                                                          ==========    ==========
      Income taxes                                                        $      431    $      222
                                                                          ==========    ==========

Supplemental Disclosure of Non-Cash Investing and Financing Activities:
   Purchase of vehicles in exchange for debt                              $       70    $      302
                                                                          ==========    ==========
</TABLE>

* exclusive of the Company's investment in the limited partnership owning the
restaurant in Pinecrest, FL of $1,295,000.

** exclusive of the Company's investment in the limited partnership owning the
restaurant in Wellington, FL of $485,000.

See accompanying notes to unaudited condensed consolidated financial statements


                                       8
<PAGE>
                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES
         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                  JULY 1, 2006

(1) BASIS OF PRESENTATION:

The accompanying  financial  information for the periods ended July 1, 2006, and
July 2, 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:

Statements  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  potentially
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:

In November  2005,  the FASB issued  final FASB Staff  Position  ("FSP") FAS No.
123R-3,  "Transition  Election  Related  to  Accounting  for the Tax  Effects of
Share-Based   Payment  Awards."  The  FSP  provides  an  alternative  method  of
calculating  excess tax  benefits  from the method  defined in SFAS No. 123R for
share-based payments. A one-time election to adopt the transition method in this
FSP is  available  to those  entities  adopting  SFAS No. 123R using  either the
modified  retrospective or modified  prospective method. Up to one year from the
initial  adoption of SFAS No. 123R or  effective  date of the FSP is provided to
make this one-time  election.  However,  until an entity makes its election,  it
must follow the  guidance in SFAS No. 123R.  The FSP is  effective  upon initial
adoption  of SFAS No.  123R and became  effective  for the Company in the second
quarter  of  2006.  We  are  currently  evaluating  the  allowable  methods  for
calculating excess tax benefits and have not yet determined whether we will make
a one-time  election to adopt the transition  method  described in this FSP, nor
the expected impact on our financial position or results of operation.

On February 3,  2006, the FASB issued FSP No. FAS  123(R)-4  "Classification  of
Options and Similar  Instruments Issued as Employee  Compensation That Allow for
Cash Settlement upon the Occurrence of a Contingent Event." This FSP amends SFAS
No. 123(R),  addressing cash settlement features that can be exercised only upon
the  occurrence of a contingent  event that is outside the  employee's  control.
These  instruments  are not required to be  classified  as a liability  until it
becomes  probable  that the event will occur.  We adopted this FSP in the second
quarter of 2006.  The  implementation  did not have an effect on the  results of
operations or financial position.

On  April 13,  2006,  the FASB  issued FSP  No. FIN  46(R)-6,  "Determining  the
Variability to Be Considered in Applying FASB  Interpretation  No. 46(R)," which
requires the use of a "by design"  approach for determining  whether an interest
is variable when applying FASB Interpretation No. 46, "Consolidation of Variable
Interest  Entities." This approach  includes  evaluating  whether an interest is
variable  based on a  thorough  understanding  of the  design  of the  potential
variable  interest  entity  ("VIE"),  including the nature of the risks that the
potential  VIE was designed to create and pass along to interest  holders in the
entity.  The guidance in this FSP is effective for reporting  periods  beginning
after  June 15,  2006.  We will adopt the guidance  presented in this FSP in the
third quarter of 2006 on a prospective  basis.  We do not expect the adoption of
this FSP to have a material  impact on our results of  operations  or  financial
position.

In  July  2006,  the  Financial   Accounting   Standards   Board  (FASB)  issued
Interpretation   No.  48,   Accounting  for  Uncertainty  in  Income  Taxes,  an
interpretation  of SFAS  Statement  No. 109. This  Interpretation  clarifies the
accounting  for  uncertainty  in  income  taxes  recognized  in an  enterprise's
financial  statements in accordance with SFAS Statement No. 109,  Accounting for
Income  Taxes.  This  Interpretation  prescribes  a  recognition  threshold  and
measurement attribute for the financial statement recognition and measurement of
a  tax  position  taken  or  expected  to  be  taken  in  a  tax  return.   This
Interpretation   also  provides  guidance  on  de-recognition,   classification,
interest  and  penalties,   accounting  in  interim  periods,   disclosure,  and
transition.  This  Interpretation  is effective for fiscal years beginning after
December 15, 2006. We currently are assessing the impact of  Interpretation  No.
48 on our results of operations and financial position.

SFAS No. 156, Accounting for Servicing of Financial Assets, an amendment of SFAS
No. 140

In March 2006,  the Financial  Accounting  Standards  Board issued  Statement of
Financial  Accounting  Standards No. 156, "Accounting for Servicing of Financial
Assets an amendment of FASB Statement 140" (Statement 156). Statement 156 amends
Statement  140 with  respect  to  separately  recognized  servicing  assets  and
liabilities.  Statement 156 requires an entity to recognize a servicing asset or
liability each time it undertakes an obligation to service a financial  asset by
entering  into a  servicing  contract  and  requires  all  servicing  assets and
liabilities to be initially  measured at fair value, if  practicable.  Statement
156  also  permits  entities  to  subsequently   measure  servicing  assets  and
liabilities using an amortization method or fair value measurement method. Under
the  amortization  method,  servicing  assets and  liabilities  are amortized in
proportion to and over the estimated  period of servicing.  Under the fair value
measurement  method,  servicing  assets  are  measured  at  fair  value  at each
reporting  date and  changes  in fair value are  reported  in net income for the
period the change  occurs.  Adoption  of  Statement  156 is  required  as of the
beginning of fiscal years  beginning  subsequent to September 15, 2006.  Earlier
adoption is permitted as of the beginning of an entity's  fiscal year,  provided
the entity has not yet issued financial statements,  including interim financial
statements.  The Company does not expect the  adoption of  Statement  156 at the
beginning of 2007 to have a material impact.

                                       9
<PAGE>

(5) INVESTMENT IN JOINT VENTURES:

Pinecrest, Florida

During  the  third  quarter  of  fiscal  year  2006,  the  limited   partnership
substantially completed the structural repairs and its interior build-out of the
business  premises.  Subsequent  to the end of the third  quarter of fiscal year
2006,  the  structural  repairs and interior  build-out  were  completed and the
renovated restaurant opened for business on August 14, 2006.

During the third quarter of fiscal year 2006, the limited partnership  completed
its private  offering and raised the sum of  $3,300,000 to reimburse the Company
for advances  made in excess of its  investment in the limited  partnership,  to
complete the renovations to the business premises for operation of a "Flanigan's
Seafood Bar and Grill"  restaurant and provide working capital for the same. The
Company  continues  to act as general  partner and is also the owner of a thirty
nine  percent  limited  partnership  interest,  as are  other  related  parties,
including  but not limited to officers  and  directors  of the Company and their
families.  With  the  completion  of  the  private  offering,  the  Company  was
reimbursed  the sum of  $1,506,000,  representing  funds advanced to the limited
partnership in excess of its investment in the limited partnership.

Davie, Florida

During  the third  quarter  of fiscal  year 2006,  the  Company,  as agent for a
limited partnership to be formed,  received landlord approval of its preliminary
building plans,  including the addition of an outdoor seating area and submitted
the same for site plan approval to the Town of Davie,  Florida.  The application
for site plan  approval is on the agenda of the Planning and Zoning Board of the
Town of Davie,  Florida for August, 2006. The restaurant is expected to open for
business during the second quarter of fiscal year 2007.

Pembroke Pines, Florida

During  the third  quarter  of fiscal  year 2006,  the  Company,  as agent for a
limited partnership to be formed,  received landlord approval of its preliminary
building plans,  including the addition of an outdoor seating area and submitted
the same for site plan  approval to the City of  Pembroke  Pines,  Florida.  The
application  for site plan  approval is on the agenda of the Planning and Zoning
Board of the City of Pembroke Pines,  Florida for August, 2006. During the third
quarter of fiscal year 2006, the Company also  re-negotiated  several provisions
of the lease for the business  premises.  The restaurant is expected to open for
business during the second quarter of fiscal year 2007.

(6) 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 July 1, 2006,


                                       10
<PAGE>

the cost of  $303,000  exceeded  the fair value of $297,000  and  resulted in an
unrealized loss of $6,000.

(7) LINE OF CREDIT:

During  the  third  quarter  of fiscal  year  2006,  the  Company  paid  monthly
installments  of interest only on its line of credit,  with no draws or payments
of principal.  As of July 1, 2006, the line of credit had a principal balance of
$762,000.

(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
$490,000 as of July 1, 2006 and $464,000 as of October 1, 2005.

(9) STOCK OPTION PLANS

The Company has several stock option plans under which  qualified  stock options
may be granted to officers and other employees of the Company.  The option price
for  qualified  stock options must be issued at 110% of the fair market value of
the  Company's  Common  Stock on the date the options are  granted.  In general,
options  granted under the Company's  stock option plans expire after a five (5)
year  period  and  generally  vest no later  than one (1) year  from the date of
grant. As of July 1, 2006, there were approximately  45,000 shares available for
grant under the Company's stock option plans.

No stock  options were granted  during the thirty nine weeks ended July 1, 2006,
nor were stock options granted during the thirty nine weeks ended July 2, 2005.

Stock option  exercises during the thirty nine weeks ended July 1, 2006 and July
2, 2005  resulted  in cash  inflows  to the  Company  of  $117,000  and  $1,000,
respectively.  The corresponding  intrinsic value as of the exercise date of the
24,120 and 250 stock options  exercised  during the thirty nine weeks ended July
1, 2006 and July 2, 2005 were $124,475 and $760, respectively.

Stock  option  activity  during the thirty  nine weeks ended July 1, 2006 was as
follows:

                                                              Weighted
                                                Total         Average
                                               Options     Exercise Price
                                               -------     --------------

Outstanding at October 1, 2005                 100,810        $   5.75
                                              --------
Granted                                              0              --
Exercised                                      (24,120)       $   4.83
Expired                                          8,440        $   4.16
                                              --------        --------
Outstanding at July 1, 2006                     68,250        $   6.27
                                              ========        ========
Options exercisable at July 1, 2006             68,250        $   6.27
                                              ========        ========


                                       11
<PAGE>

The  weighted-average  remaining  contractual terms of stock options outstanding
and stock  options  exercisable  at July 1, 2006 was 2.45 years.  The  aggregate
intrinsic value of options  outstanding and stock options exercisable at July 1,
2006 was approximately $319,000.

In December 2004,  the FASB issued SFAS No. 123R,  "Share-Based  Payment".  This
statement  is  a  revision  of  SFAS  No.  123,   "Accounting   for  Stock-Based
Compensation",  supersedes  Accounting  Principles Board ("APB") Opinion No. 25,
"Accounting for Stock Issued to Employees" and amends SFAS No. 95, "Statement of
Cash Flows." The statement eliminates the alternative to use the intrinsic value
method of accounting that was provided in SFAS No. 123, which generally resulted
in no  compensation  expense  recorded in  financial  statements  related to the
issuance of equity  awards to employees.  The  statement  also requires that the
cost resulting from all  share-based  payment  transactions be recognized in the
financial statements.  It establishes fair value as the measurement objective in
accounting  for  share-based  payment  arrangements  and generally  requires all
companies  to apply a  fair-value-based  measurement  method in  accounting  for
share-based  payment  transactions with employees.  The Company adopted SFAS No.
123R  effective  January  1,  2006,  using a  modified  version  of  prospective
application in accordance  with the  statement.  This  application  requires the
Company to record  compensation  expense for all awards granted to employees and
directors  after the adoption  date and for the unvested  portion of awards that
are  outstanding  at the date of  adoption.  The Company  had no unvested  stock
options as of October 1, 2005 and  granted no stock  options in the thirty  nine
weeks  ended  July 1,  2006,  so there  is no  impact  of SFAS  No.  123R on the
Company's condensed  consolidated financial statements for the thirty nine weeks
ending July 1, 2006. In  accordance  with the modified  prospective  transaction
method, the Company's  consolidated  financial statements for prior periods have
not been restated to reflect and do not include the impact of SFAS No. 123R.

(10) COMMITMENTS, CONTINGENCIES AND SUBSEQUENT EVENTS:

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  $2,488,000.  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.


                                       12
<PAGE>

Litigation

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 of the building,  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.
During the third quarter of fiscal year 2006,  the summary  judgment  granted in
favor of the  sellers'  attorney  was  reversed  by the  court.  The  Company is
appealing the granting of the summary judgment in favor of the adjacent shopping
center,  which  appeal is  necessary  to  proceed  against  the  seller  and its
individual  partners  even though the Company no longer  plans to use the ground
floor for a package liquor store.

During  the third  quarter of fiscal  year  2006,  the  Company  entered  into a
Mediation Settlement  Agreement,  agreeing to a purchase price of $3,862,500 for
the real  property and the  assignment  of a ground lease for a small portion of
the property of the combination restaurant and package liquor store located at 4
North Federal Highway,  Hallandale,  Florida, (Store #31). Subsequent to the end
of the third quarter of fiscal year 2006, the Company closed on the purchase.

Certain states have "liquor  liability"  laws which allow a person injured by an
"intoxicated person" to bring a civil suit against the business (or social host)
who served intoxicating  liquors to an already "obviously  intoxicated  person",
known as "dram shop" claims. 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.

Except as provided above, 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; Windstorm Claims

As of July 1, 2006,  the Company had  submitted  claims  totaling  $923,600  for
damages caused when  Hurricane  Wilma impacted South Florida on October 24, 2005
and received  advances in the aggregate  amount of $700,000,  ($750,000 less the
$50,000  deductible),  from its  insurance  company on account of damages to its
properties.  During the third  quarter of fiscal  year 2006,  the  Company  also
submitted claims for business  interruption  totaling  $168,700 for three of its
Company  owned  locations  and  one  of  its  limited   partnership   locations.
Notwithstanding the filing of these claims, the Company has still not received a
response from its


                                       13
<PAGE>

insurance  carrier other than the advances and as a result,  the ultimate amount
of the insurance recovery cannot be accurately estimated at this time.

Subsequent Events

Subsequent  to the end of the  third  quarter  of fiscal  year 2006 the  Company
closed on the  purchase of the  limited  liability  company  which owns the real
property and ground lease for a small  portion of the property of the  Company's
combination  restaurant and package store located in Hallandale,  Florida (Store
#31) for a purchase  price of  $3,862,500  pursuant  to a  Mediation  Settlement
Agreement. The Company received a $3,280,000 mortgage from its lender to finance
this transaction.  As collateral for the mortgage, the limited liability company
granted  the  lender a first  mortgage  on its  real  property  and a  leasehold
mortgage on the ground lease while the Company  granted a first  mortgage on its
parking lot adjacent to the  above-described  business  location.  The Company's
grant of a first  mortgage on its parking lot included the  satisfaction  of the
purchase money mortgage on the same, which had an approximate  principal balance
of  $264,000.  The  mortgage  bears  interest at the rate of seven and  one-half
(7.5%) percent per annum, is amortized over twenty (20) years with equal monthly
payments of  principal  and  interest,  each in the amount of $26,400,  with the
entire principal balance and all accrued interest due in seven (7) years.

(11) 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 thirteen and
thirty nine weeks ended July 1, 2006 and July 2, 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.

<TABLE>
<CAPTION>
                                                    Thirteen Weeks   Thirteen Weeks
                                                        Ending           Ending
                                                        July 1,          July 2,
                                                         2006             2005
                                                         ----             ----
<S>                                                     <C>             <C>
Operating Revenues:
   Restaurants                                          $ 10,348        $  9,191
   Retail package stores                                   3,036           2,718
   Other revenues                                            467             433
                                                        --------        --------
      Total operating revenues                          $ 13,851        $ 12,342
                                                        ========        ========

Operating Income Reconciled to Income Before
Income Taxes and Minority Interests in
Earnings of Consolidated Limited Partnerships
   Restaurants                                          $    868        $    754
   Retail package stores                                     160             144
                                                        --------        --------
                                                           1,028             898
   Corporate expenses, net of other
      Revenues                                              (374)           (182)
                                                        --------        --------
   Operating income                                          654             716
   Other income (expense)                                    (47)            (48)
                                                        --------        --------
Income Before Income Taxes and Minority Interests
in Earnings of Consolidated Limited Partnerships        $    607        $    668
                                                        ========        ========

Depreciation and Amortization:
   Restaurants                                          $    304        $    248
   Retail package stores                                      57              30
                                                        --------        --------
                                                             361             278
   Corporate                                                  96              50
                                                        --------        --------
Total Depreciation and Amortization                     $    457        $    328
                                                        ========        ========

Capital Expenditures:
   Restaurants                                          $    974        $    812
   Retail package stores                                      35              33
                                                        --------        --------
                                                           1,009             845
   Corporate                                                 231             (57)*
                                                        --------        --------
Total Capital Expenditures                              $  1,240        $    788
                                                        ========        ========
</TABLE>

*includes ($68,000) transfers of furniture and fixtures from Corporate warehouse
to retail package stores and/or restaurants.


                                       14
<PAGE>

<TABLE>
<CAPTION>
                                                       Thirty Nine Weeks   Thirty Nine Weeks
                                                            Ending              Ending
                                                            July 1,             July 2,
                                                             2006                2005
                                                             ----                ----
<S>                                                         <C>                <C>
Operating Revenues:
   Restaurants                                              $ 30,109           $ 26,427
   Retail package stores                                      10,228              9,127
   Other revenues                                              1,239              1,062
                                                            --------           --------
      Total operating revenues                              $ 41,576           $ 36,616
                                                            ========           ========

Operating Income Reconciled to Income Before
Income Taxes and Minority Interests in
Earnings of Consolidated Limited Partnerships
   Restaurants                                              $  2,699           $  2,108
   Retail package stores                                         701                594
                                                            --------           --------
                                                               3,400              2,702
   Corporate expenses, net of other
      Revenues                                                (1,567)            (1,049)
                                                            --------           --------
   Operating income                                            1,833              1,653
   Other income (expense)                                        364                (19)
                                                            --------           --------
Income Before Income Taxes and Minority Interests
in Earnings of Consolidated Limited Partnerships            $  2,197           $  1,634
                                                            ========           ========

Depreciation and Amortization:
   Restaurants                                              $    900           $    796
   Retail package stores                                         169                 93
                                                            --------           --------
                                                               1,069                889
   Corporate                                                     252                140
                                                            --------           --------
Total Depreciation and Amortization                         $  1,321           $  1,030
                                                            ========           ========

Capital Expenditures:
   Restaurants                                              $  1,626           $  1,604
   Retail package stores                                         110                 94
                                                            --------           --------
                                                               1,736              1,698
   Corporate                                                     690                (29)*
                                                            --------           --------
Total Capital Expenditures                                  $  2,426           $  1,669
                                                            ========           ========
</TABLE>

*  includes  ($72,000)  transfers  of  furniture  and  fixtures  from  Corporate
warehouse to retail package stores and/or restaurants.


                                       15
<PAGE>

                                                          July 1,     October 1,
                                                           2006          2005
                                                           ----          ----
Identifiable Assets:
   Restaurants                                           $ 11,324      $ 10,277
   Retail package store                                     3,564         3,527
                                                         --------      --------
                                                           14,888        13,804
   Corporate                                                9,479         7,295
                                                         --------      --------
Consolidated Totals                                      $ 24,367      $ 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 entertainment  oriented club (collectively the "units"). At July 1, 2006,
the Company operated 20 units and had equity interests in 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.

<TABLE>
<CAPTION>
                                July 1       Oct. 1        July 2      Note
                                 2006         2005          2005       Number
                                ------       ------        ------      ------
Types of Units
----------------------------------------------------------------------------------
<S>                                <C>          <C>          <C>
Company owned:
  Combination package
  and restaurant                   4            4            4
  Restaurant only                  2            2            2
  Package store only               5            5            5

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

Company Owned Club:                1            1            1

Total Company
Owned/Operated Units              20           19           19

Franchised Units                   7            7            7         (6)
</TABLE>


                                       16
<PAGE>

Notes:

(1)  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.  During the
third  quarter  of fiscal  year 2006,  the  Company,  as general  partner of the
limited  partnership,  substantially  completed the necessary structural repairs
and its interior  build-out,  which were completed  subsequent to the end of the
third quarter of fiscal year 2006. The renovated  restaurant opened for business
on August 14, 2006 and is not included in the table of units.

(2) 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.

(3) 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 second 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.

(4) During the third  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 Pembroke Pines, 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 second 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 second  quarter of fiscal  year 2006,  the  Company  assumed  the
management  of an existing  restaurant  in Deerfield  Beach,  Florida  under its
current  format,  "The Whale's Rib",  pursuant to a management  agreement.  This
restaurant is included in the table of units.


                                       17
<PAGE>

(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 as a franchise.

      Results of Operations
      ---------------------

<TABLE>
<CAPTION>
                                                      Thirteen Weeks Ended
                                                July 1,                    July 2,
                                                 2006                       2005
                                          Amount      Percent        Amount      Percent
                                          -------------------        -------------------
                                            (In Thousands)             (In Thousands)
<S>                                      <C>           <C>          <C>           <C>
Restaurant food sales                    $  8,405       62.80       $  7,550       63.40
Restaurant bar sales                        1,943       14.52          1,641       13.78
Package goods sales                         3,036       22.68          2,718       22.82
                                         --------    --------       --------    --------

Total sales                              $ 13,384      100.00       $ 11,909      100.00

Franchise related revenues                    291                        242
Owner's fee                                    96                        123
Other operating income                         80                         68
                                         --------                   --------

Total Revenue                            $ 13,851                   $ 12,342
                                         ========                   ========

<CAPTION>
                                                    Thirty Nine Weeks Ended
                                                July 1,                    July 2,
                                                 2006                       2005
                                          Amount      Percent        Amount      Percent
                                          -------------------        -------------------
                                            (In Thousands)             (In Thousands)
<S>                                      <C>           <C>          <C>           <C>
Restaurant food sales                    $ 24,440       60.59       $ 21,499       60.47
Restaurant bar sales                        5,669       14.05          4,928       13.86
Package goods sales                        10,228       25.36          9,127       25.67
                                         --------    --------       --------    --------

Total sales                              $ 40,337      100.00       $ 35,554      100.00

Franchise related revenues                    837                        754
Owner's fee                                   171                        198
Other operating income                        231                        110
                                         --------                   --------
Total Revenue                            $ 41,576                   $ 36,616
                                         ========                   ========
</TABLE>


                                       18
<PAGE>

Comparison of Thirteen Weeks Ended July 1, 2006 and July 2, 2005.
-----------------------------------------------------------------

As the table above illustrates,  total revenues in the thirteen weeks ended July
1, 2006  increased by 12.23% as compared to the total  revenues for the thirteen
weeks ended July 2, 2005 primarily due to the restaurant in Wellington,  Florida
being open for the  entire  fiscal  quarter.  Total  revenues  are  expected  to
increase due to the restaurant in Wellington,  Florida being open for the entire
fiscal year and the opening of the  restaurant in  Pinecrest,  Florida on August
14, 2006.

Restaurant  food sales  represented  62.80% of total sales in the thirteen weeks
ended July 1, 2006 as compared to 63.40% of total  sales in the  thirteen  weeks
ended July 2, 2005.  The weekly  average of same store  restaurant  food  sales,
which now includes five (5) limited partnership  restaurants,  were $593,634 and
$551,133  for  the  thirteen  weeks  ended  July  1,  2006  and  July  2,  2005,
respectively, an increase of 7.71%. The increase in restaurant food sales is due
to the  restaurant  in  Wellington,  Florida  being open for the  entire  fiscal
quarter  and  the  continued  increase  in the  weekly  average  of  same  store
restaurant food sales.  Restaurant food sales should continue to increase due to
the restaurant in Wellington, Florida being open for the entire fiscal year; the
opening of the  restaurant  in  Pinecrest,  Florida on August 14, 2006;  and the
continued increase in the weekly average of same store restaurant food sales.

Restaurant  bar sales  represented  14.52% of total sales in the thirteen  weeks
ended July 1, 2006 as compared to 13.78% of total  sales in the  thirteen  weeks
ended July 2, 2005. The weekly  average of same store  restaurant bar sales were
$135,985  and  $119,810  for the  thirteen  weeks ended July 1, 2006 and July 2,
2005, respectively,  an increase of 13.50%. The increase in restaurant bar sales
is due to the restaurant in Wellington, Florida being open for the entire fiscal
quarter  ended  July 1,  2006 and the  promotions  introduced  during  the third
quarter  of  fiscal  year  2005  to  increase  restaurant  bar  sales,   without
jeopardizing  the Company's  perception as a family  restaurant.  Restaurant bar
sales should  continue to increase due to the restaurant in Wellington,  Florida
being  open for the  entire  fiscal  year;  the  opening  of the  restaurant  in
Pinecrest,  Florida on August 14, 2006; and the continued increase in the weekly
average of same store restaurant bar sales.

Package  goods sales  represented  22.68% of total sales in the  thirteen  weeks
ended July 1, 2006,  as compared to 22.82% of total sales in the thirteen  weeks
ended July 2, 2005.  The weekly  average of same store  package goods sales were
$233,545  and  $209,091  for the  thirteen  weeks ended July 1, 2006 and July 2,
2005,  respectively,  an increase of 11.70%.  The increase was  primarily due to
increased volume. Package good sales are 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 66.23% and 65.11%
for the thirteen  weeks ended July 1, 2006 and July 2, 2005,  respectively.  The
1.12%  increase  in gross  profit  for  restaurant  and bar  sales for the third
quarter of fiscal 2006 was primarily due to menu price increases.


                                       19
<PAGE>

The gross profit  margin for package  goods stores was 28.36% and 28.44% for the
thirteen  weeks  ended  July 1, 2006 and July 2, 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  $13,197,000 and $11,626,000 for the thirteen
weeks ended July 1, 2006 and July 2, 2005, respectively,  an increase of 13.51%.
The increase is due to the operation of the  restaurant in  Wellington,  Florida
for the  entire  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 opening of
the restaurant in Pinecrest,  Florida on August 14, 2006 and a general  increase
in overall operating costs and expenses.

Payroll and related costs were  $4,096,000 and $3,394,000 for the thirteen weeks
ended July 1, 2006 and July 2, 2005,  respectively,  an increase of 20.68%.  The
increase is attributed to the operation of the restaurant in Wellington, Florida
for the  entire  fiscal  quarter  ended July 1, 2006,  pre-opening  payroll  and
related  costs for the  restaurant  in  Pinecrest,  Florida,  the  impact of the
Florida minimum wage which was effective during the third quarter of fiscal year
2005 and further impacted by its first annual cost of living increase  effective
January 1, 2006 and the accrual of officers'  bonus in fiscal year 2006.  During
the balance of fiscal  year 2006,  payroll  and  related  costs are  expected to
increase due to the opening of the  restaurant in  Pinecrest,  Florida on August
14, 2006.

Occupancy costs which include rent, common area  maintenance,  repairs and taxes
were $769,000 and $716,000 for the thirteen weeks ended July 1, 2006 and July 2,
2005,  respectively,  an increase of 7.40%.  The  increase is  accounted  for by
increased  real  property  taxes and the payment of rent for the  restaurant  in
Wellington, Florida for the entire fiscal quarter ended July 1, 2006.

Selling,  general and administrative expenses were $2,662,000 and $2,364,000 for
the  thirteen  weeks  ended  July 1,  2006 and July 2,  2005,  respectively,  an
increase of 12.61%. The increase in selling, general and administrative expenses
is accounted for by the operation of the restaurant in  Wellington,  Florida for
the entire 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 an expense of ($47,000)  for the thirteen  weeks
ended July 1, 2006 as compared to an expense of ($48,000) for the thirteen weeks
ended July 2, 2005. Other income and expenses includes insurance  recovery,  net
of casualty loss, ($8,000), which includes the deletion of the net book value of
property and equipment as a result of Hurricane Wilma,  ($7,000),  and repair of
damage ($1,000) caused by Hurricane Wilma, with no offset by an advance from the
Company's insurance carrier against anticipated  insurance recoveries during the
thirteen weeks ended July 1, 2006.


                                       20
<PAGE>

Comparison of Thirty Nine Weeks Ended July 1, 2006 and July 2, 2005.
--------------------------------------------------------------------

As the table above  illustrates,  total  revenues in the thirty nine weeks ended
July 1, 2006  increased  by 13.55% as  compared  to the total  revenues  for the
thirty  nine  weeks  ended  July 2,  2005  primarily  due to the  restaurant  in
Wellington,  Florida being open for the thirty nine weeks ended July 1, 2006 and
menu price  increases  made during the third  quarter of fiscal  year 2005.  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 and the opening of the  restaurant in  Pinecrest,  Florida on August
14, 2006.

Restaurant food sales represented 60.59% of total sales in the thirty nine weeks
ended July 1, 2006 as compared to 60.47% of total sales in the thirty nine weeks
ended July 2, 2005.  The weekly  average of same store  restaurant  food  sales,
which now includes five (5) limited partnership  restaurants,  were $573,199 and
$542,044  for the  thirty  nine  weeks  ended  July 1,  2006 and  July 2,  2005,
respectively, an increase of 5.75%. The increase in restaurant food sales is due
to the restaurant in  Wellington,  Florida being open for the entire thirty nine
weeks, 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 opening of the
restaurant in Pinecrest,  Florida on August 14, 2006; and the continued increase
in the weekly average of same store restaurant food sales.

Restaurant bar sales represented  14.05% of total sales in the thirty nine weeks
ended July 1, 2006 as compared to 13.86% of total sales in the thirty nine weeks
ended July 2, 2005. The weekly  average of same store  restaurant bar sales were
$131,674  and  $124,219 for the thirty nine weeks ended July 1, 2006 and July 2,
2005,  respectively,  an increase of 6.00%. The increase in restaurant bar sales
is due to the restaurant in Wellington, Florida being open for the entire thirty
nine weeks 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 bar 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  opening  of the  restaurant  in
Pinecrest,  Florida on August 14, 2006; and the continued increase in the weekly
average of same store restaurant bar sales.

Package goods sales  represented  25.36% of total sales in the thirty nine weeks
ended July 1, 2006,  as  compared  to 25.67% of total  sales in the thirty  nine
weeks ended July 2, 2005.  The weekly average of same store package goods sales,
which now includes all nine (9) Company owned package stores,  were $262,256 and
$234,036  for the  thirty  nine  weeks  ended  July 1,  2006 and  July 2,  2005,
respectively, an increase of 12.06%. The increase was primarily due to increased
volume.  Hurricane  Wilma had no adverse affect upon package goods sales because
all


                                       21
<PAGE>

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
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 66.02% and 64.80%
for the thirty nine weeks ended July 1, 2006 and July 2, 2005, respectively. The
1.22%  increase  in gross  profit  margin for  restaurant  and bar sales for the
thirty nine weeks ended July 1, 2006 was primarily due to menu price increases.

The gross profit  margin for package  goods stores was 28.21% and 28.25% for the
thirty nine weeks ended July 1, 2006 and July 2, 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  $39,743,000  and  $34,963,000 for the thirty
nine weeks  ended July 1, 2006 and July 2, 2005,  respectively,  an  increase of
13.67%.  The increase is due to the operation of the  restaurant in  Wellington,
Florida  for the  entire  thirty  nine weeks  ended  July 1, 2006,  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 opening of the restaurant in Pinecrest, Florida on August 14, 2006
and a general increase in overall operating costs and expenses.

Payroll and related costs were  $11,904,000  and  $9,853,000 for the thirty nine
weeks ended July 1, 2006 and July 2, 2005, respectively,  an increase of 20.82%.
The increase is  attributed to the  operation of the  restaurant in  Wellington,
Florida for the entire thirty nine weeks ended July 1, 2006, pre-opening payroll
and related costs for the  restaurant in Pinecrest,  Florida,  the impact of the
Florida minimum wage which was effective during the third quarter of fiscal year
2005  and the  further  impact  of its  first  annual  cost of  living  increase
effective  January 1, 2006 and the  accrual of  officers'  bonus in fiscal  year
2006.  During the  balance of fiscal year 2006  payroll  and  related  costs are
expected to increase due to the opening of the restaurant in Pinecrest,  Florida
on August 14, 2006.

Occupancy costs which include rent, common area  maintenance,  repairs and taxes
were  $2,306,000 and $2,081,000 for the thirty nine weeks ended July 1, 2006 and
July 2, 2005, respectively, an increase of 10.81%. The increase is accounted for
by increased  real property  taxes and the payment of rent for the restaurant in
Wellington, Florida for the entire thirty nine weeks of fiscal year 2006.

Selling,  general and administrative expenses were $7,958,000 and $7,177,000 for
the thirty  nine weeks  ended  July 1, 2006 and July 2, 2005,  respectively,  an
increase of 10.88%. The increase in selling,  general and administrative expense
is accounted for by the operation of the restaurant in  Wellington,  Florida for
the entire thirty nine weeks ended July 1, 2006;  expenses  associated  with the
restaurant in Pinecrest, Florida; and an overall increase in expenses.


                                       22
<PAGE>

Other Income and Expense

Other income and expenses was income of $364,000 for the thirty nine weeks ended
July 1, 2006,  as compared to an expense of ($19,000)  for the thirty nine weeks
ended July 2, 2005. Other income and expenses includes insurance  recovery,  net
of casualty loss, $442,000, which includes the deletion of the net book value of
property  and  equipment as a result of Hurricane  Wilma,  ($65,000),  repair of
damage ($132,000) and food waste ($61,000) caused by Hurricane Wilma,  offset by
advances of $700,000,  ($750,000 less a $50,000 deductible),  from the Company's
insurance carrier against anticipated insurance recoveries.

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 third quarter of fiscal year 2006, as
well as the third  quarter of fiscal year 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. Pre-opening
payroll was approximately  $26,000 for the third quarter of fiscal year 2006, as
compared to  approximately  $5,000 for the third quarter of fiscal 2005. For the
thirty  nine  weeks of fiscal  year 2006,  as well as the  thirty  nine weeks of
fiscal year 2005,  the  pre-opening  rent paid and  expensed for the new limited
partnership restaurant in Pinecrest,  Florida was approximately $153,000,  which
is  also  the  full  rent  provided  in  the  lease.   Pre-opening  payroll  was
approximately $26,000 for the thirty nine weeks of fiscal year 2006, as compared
to $23,000 for the thirty nine weeks of fiscal year 2005.

During the  thirteen  and thirty  nine weeks ended July 2, 2005,  the  Company's
income from operations was also adversely  affected on a short-term basis by the
pre-opening costs incurred for the limited partnership restaurant in Wellington,
Florida  which  opened on May 27,  2005.  For the thirteen and thirty nine weeks
ended  July 2,  2005,  pre-opening  rent  paid and  expensed  was  approximately
$18,000. For the thirteen and thirty nine weeks ended July 2, 2005,  pre-opening
payroll was $61,000 and  $90,000  respectively,  excluding  lodging and per diem
allowances  incurred  for new  restaurant  openers due to the  proximity of this
restaurant.

During the balance of fiscal year 2006, income from operations will be adversely
affected by the  pre-opening  costs  incurred  for the new  limited  partnership
restaurant in  Pinecrest,  Florida  prior to the opening of the  restaurant  for
business on August 14, 2006, including but not limited to additional pre-opening
rent,  in the amount of $25,500,  subsequent  to the end of the third quarter of
fiscal year 2006 through the date the restaurant opened for business.

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  also  expects  higher food
costs,  payroll  costs and an overall  increase  in  expenses.  The  Company has
already  raised some of its menu prices to offset  higher food costs and payroll
costs and will continue to do so wherever competitively possible.

Liquidity and Capital Resources

Cash Flows

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


                                       23
<PAGE>

                                                        Thirty Nine Weeks Ended
                                                         July 1         July 2
                                                          2006           2005
                                                        --------       --------
                                                            (In Thousands)

      Net cash provided by
         operating activities                           $  2,068       $  1,930
      Net cash used in
          investing activities                            (2,344)        (1,324)
      Net cash provided by (used in)
          financing activities                             1,130           (602)
                                                        --------       --------

       Net Increase  in Cash and Cash Equivalents            854              4

       Cash and Cash Equivalents,  Beginning               2,674          2,936
                                                        --------       --------

       Cash and Cash Equivalents, Ending                $  3,528       $  2,940
                                                        ========       ========

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.

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.

Capital Expenditures

The Company had cash  additions to property and equipment of  $2,356,000  during
the thirty nine weeks ended July 1, 2006,  including $531,000 as a direct result
of Hurricane  Wilma,  as compared to $1,367,000  for the thirty nine weeks ended
July 2, 2005.  The  additions to fixed assets during the thirty nine weeks ended
July 1, 2006 included most of the  renovations  to the business  premises of the
restaurant in Pinecrest,  Florida, while the addition to fixed assets during the
thirty nine weeks ended July 2, 2005  included the  renovations  to the business
premises of the restaurant in Wellington, Florida.

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.  During the third quarter of
fiscal  year  2006,  the  limited  partnership  which  owns  the  restaurant  in
Pinecrest,   Florida  completed  its  private  offering,   raising  the  sum  of
$3,300,000.  The funds from the  private  offering  were used to  reimburse  the
Company for advances made to the limited partnership in excess of its investment
in the same, ($1,506,000),  to complete the renovations to the business premises
for operation of a  "Flanigan's  Seafood Bar and Grill"  restaurant  and provide
working capital for the same.


                                       24
<PAGE>

Long Term Debt

As of July 1, 2006, the Company had long term debt of $2,205,000, as compared to
$1,365,000 as of July 2, 2005, and $1,557,000 as of October 1, 2005.

The Company's  long term debt includes its line of credit,  which line of credit
had a principal  balance of $762,000 as of July 1, 2006. As of July 1, 2006, the
Company is in compliance  with the affirmative  covenants  contained in the loan
documents.

Subsequent  to the end of the third  quarter of fiscal  year 2006,  the  Company
closed on a $3,280,000  mortgage  which  financed the Company's  purchase of the
limited  liability  company  which owns the real property and ground lease for a
small  portion of the  property  of the  Company's  combination  restaurant  and
package liquor store located at 4 North Federal  Highway,  Hallandale,  Florida,
(Store #31).  As  collateral  for the mortgage,  the limited  liability  company
granted  the  lender a first  mortgage  on its  real  property  and a  leasehold
mortgage on the ground lease,  while the Company granted a first mortgage on its
parking lot adjacent to the  above-described  business  location.  The Company's
grant of a first mortgage on its parking lot,  included the  satisfaction of the
purchase money mortgage on the same, which had an approximate  principal balance
of $264,000.  The mortgage  bears  interest at the rate of seven and one-half (7
1/2%) percent per annum,  is amortized over twenty (20) years with equal monthly
payments of  principal  and  interest,  each in the amount of $26,400,  with the
entire principal balance and all accrued interest due in seven (7) years.

Property Insurance Coverage; Deductibles

For the policy  year  commencing  December  30,  2005,  the  Company's  property
insurance 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 its cash  balances  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.

Purchase of Company Common Stock

Pursuant to a discretionary plan approved by the Board of Directors,  during the
thirteen  weeks ended July 1, 2006,  the Company  purchased  5,000 shares of its
common stock for an aggregate purchase price of $52,000.  During the thirty nine
weeks ended July 1, 2006, the Company purchased 9,350 shares of its common stock
for an aggregate purchase price of $95,000.

Working Capital

The table below summarizes the current assets, current liabilities,  and working
capital for the fiscal  quarters ended July 1, 2006, July 2, 2005 and the fiscal
year ended October 1, 2005.


                                       25
<PAGE>

                                               July 1,      July 2,      Oct. 1,
       Item                                     2006         2005         2005
                                               -------      -------      -------
                                                        (In Thousands)

Current Assets                                 $ 7,350      $ 6,609      $ 6,091
Current Liabilities                              4,583        4,138        3,954
                                               -------      -------      -------
Working Capital                                  2,767        2,471        2,137

Working  capital for the fiscal  quarter ending July 1, 2006 increased by 11.98%
from the  working  capital  for the fiscal  quarter  ending  July 2, 2005 and by
29.48%  from the working  capital  for the fiscal  year ending  October 1, 2005.
Working capital for the quarter ended July 1, 2006 was still negatively impacted
by advances for the new location in Davie, Florida, in the amount of $11,000 for
architect  fees,  and for the new location in Pembroke  Pines,  Florida,  in the
amount of $31,000,  including  but not limited to the deposit  under the Sale of
Business Agreement,  ($25,000 of which $15,000 became  non-refundable during the
quarter  ended July 1, 2006) and  architects  fees  ($6,000).  The  increase  in
working  capital for the fiscal quarter ending July 1, 2006 when compared to the
fiscal quarter ending July 2, 2005 was also due to the completion of the private
offering by the limited partnership owning the restaurant in Pinecrest,  Florida
during the third quarter of fiscal year 2006, which private offering  reimbursed
the  Company  for  advances  made to the  limited  partnership  in excess of its
investment in the same, ($1,506,000).

Subsequent to the end of the third quarter of fiscal year 2006,  working capital
was  adversely  affected  by  the  Company's  payment  of  the  cash  to  close,
(approximately $925,000), on its purchase of the limited liability company which
owns the real  property  and  ground  lease of the  Company's  location  at 4 N.
Federal Highway, Hallandale, Broward County, Florida.

Through the remainder of fiscal year 2006 and into fiscal year 2007,  management
projects that working capital will be adversely  affected by investments  and/or
further  advances  to be made by the  Company  for the new  locations  in Davie,
Florida and Pembroke Pines,  Florida.  Management believes that over the balance
of  fiscal  year  2006,  working  capital  will  increase  by the  amount of any
insurance recoveries received

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 July 1, 2006 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 July 1, 2006,  the  Company  has two debt  arrangements  which have  variable
interest rates. 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 July 1,  2006 of
$794,000.  The second  instrument,  the secured  $2,000,000 line of credit has a
variable interest rate, which is at prime. The line of credit has an outstanding
principal  balance at July 1, 2006 of $762,000.  Increases in interest rates may
have a material affect upon results of


                                       26
<PAGE>

operations,  depending  upon the  outstanding  principal  balance on the line of
credit from time to time.

At July 1, 2006, 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.

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

Our Chief Executive Officer and Chief Financial Officer,  with the participation
of management, evaluated the effectiveness of the 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 July 1, 2006. 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 third  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 July 1, 2006
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 13 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.


                                       27
<PAGE>

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

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:  August 15, 2006
       ---------------

                                         /s/ Jeffrey D. Kastner
                                         ----------------------
                                         JEFFREY D. KASTNER
                                         Chief Financial Officer and Secretary

Date:  August 15, 2006
       ---------------


                                       28