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 June 30, 2007

                                       OR

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

                 For the transition period from          to

                          Commission File Number 1-6836

                          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 Number)

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

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

--------------------------------------------------------------------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. 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 Securities  Exchange Act
of 1934).

Large accelerated filer |_|   Accelerated filer |_|    Non-accelerated filer |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|

On August 14, 2007, 1,890,733 shares of Common Stock, $0.10 par value per share,
were outstanding.
--------------------------------------------------------------------------------

<page>

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

                               INDEX TO FORM 10-Q

PART I. FINANCIAL INFORMATION.................................................1

     ITEM 1.  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED).........1
         UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME................2
         CONDENSED CONSOLIDATED BALANCE SHEETS................................4
         UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS............6
         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.......8

     ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
              AND RESULTS OF OPERATIONS......................................15
     ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.....25
     ITEM 4.  CONTROLS AND PROCEDURES........................................25

PART II. OTHER INFORMATION...................................................26

     ITEM 1.  LEGAL PROCEEDINGS..............................................26
     ITEM 1A.  RISK FACTORS..................................................26
     ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS....26
     ITEM 6. EXHIBITS........................................................27



As used in this Quarterly  Report on Form 10-Q, the terms "we," "us," "our," the
"Company"  and   "Flanigan's"   mean  Flanigan's   Enterprises,   Inc.  and  its
subsidiaries (unless the context indicates a different meaning).


<page>


                          PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)




                                       1
<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

                                                 June 30,     July 1,    June 30,    July 1,
                                                   2007        2006        2007        2006
                                                 --------    --------    --------    --------

                                                    <c>         <c>        <c>         <c>
REVENUES:
   Restaurant food sales                         $  9,773    $  8,405    $ 28,832    $ 24,440
   Restaurant bar sales                             2,206       1,943       6,642       5,669
   Package store sales                              3,037       3,036      10,050      10,228
   Franchise related revenues                         279         291         887         837
   Owner's fee                                         71          96         151         171
   Other operating income                              41          80         134         231
                                                 --------    --------    --------    --------
                                                   15,407      13,851      46,696      41,576
                                                 --------    --------    --------    --------


COSTS AND EXPENSES:
   Cost of merchandise sold:
       Restaurant and lounges                       4,211       3,495      12,206      10,232
       Package goods                                2,174       2,175       7,237       7,343
  Payroll and related costs                         4,494       4,096      13,098      11,904
  Occupancy costs                                   1,099         800       2,863       2,398
  Selling, general and administrative expenses      3,141       2,635       9,482       7,876
                                                 --------    --------    --------    --------

                                                   15,119      13,201      44,886      39,753
                                                 --------    --------    --------    --------

Income from Operations                                288         650       1,810       1,823
                                                 --------    --------    --------    --------


OTHER INCOME (EXPENSE):
Interest expense                                     (129)        (53)       (387)       (124)
Interest and other income                              40          18         110          56
Insurance recovery, net of casualty loss               --          (8)         --         442
Gain on sale of property and equipment                393          --         393          --
                                                 --------    --------    --------    --------
                                                      304         (43)        116         374
                                                 --------    --------    --------    --------

Income before Provision for Income Taxes
   and Minority Interest in (Earnings) Losses of
    Consolidated Limited Partnerships                 592         607       1,926       2,197

Provision for Income Taxes                           (236)       (258)       (603)       (705)

Minority Interest in (Earnings) Losses of
Consolidated Limited Partnerships                      71        (146)       (240)       (345)
                                                 --------    --------    --------    --------

Net Income                                       $    427    $    203    $  1,083    $  1,147
                                                 ========    ========    ========    ========
</table>

                                       2
<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

                                          June 30,      July 1,     June 30,      July 1,
                                            2007         2006         2007         2006
                                         ----------   ----------   ----------   ----------

                                      <c>          <c>          <c>          <c>

Net Income Per Common Share:
         Basic                           $     0.23   $     0.11   $     0.57   $     0.61
                                         ==========   ==========   ==========   ==========
         Diluted                         $     0.22   $     0.11   $     0.57   $     0.60
                                         ==========   ==========   ==========   ==========

Weighted Average Shares and Equivalent
            Shares Outstanding
              Basic                       1,892,891    1,893,486    1,888,336    1,882,690
                                         ==========   ==========   ==========   ==========
              Diluted                     1,914,986    1,920,472    1,910,119    1,908,085
                                         ==========   ==========   ==========   ==========
</table>


See accompanying notes to unaudited condensed consolidated financial statements.


                                       3
<page>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                JUNE 30, 2007 (UNAUDITED) AND SEPTEMBER 30, 2006
                                 (In Thousands)

<table>
<caption>

                                     ASSETS

                                                JUNE 30,   SEPTEMBER 30,
                                                  2007         2006
                                               ----------   ----------

                                                   <c>          <c>

Current Assets:

Cash and cash equivalents                      $    3,330   $    1,698
Notes and mortgages receivables,
    current maturities, net                            14           12
Due from franchisees                                  314          569
Other receivables                                     161          821
Inventories                                         2,202        2,215
Prepaid expenses                                    1,056          813
Deferred tax asset                                    186          187
                                               ----------   ----------
         Total Current Assets                       7,263        6,315
                                               ----------   ----------

Property and Equipment, Net                        19,287       17,967
                                               ----------   ----------

Investment in Limited Partnership                     149          153
                                               ----------   ----------
Other Assets:

Liquor licenses, net                                  347          347
Notes and mortgages receivable, net                    48          103
Deferred tax asset                                    392          397
Leasehold purchases                                 2,142        1,291
Other                                               1,227          825
                                               ----------   ----------
         Total Other Assets                         4,156        2,963
                                               ----------   ----------
         Total Assets                          $   30,855   $   27,398
                                               ==========   ==========

</table>

                                       4
<page>

                  FLANIGAN'S ENTERPRISES, INC, AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                JUNE 30, 2007 (UNAUDITED) AND SEPTEMBER 30, 2006
                                 (In Thousands)

                                   (Continued)

                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                                    JUNE 30,    SEPTEMBER 30,
                                                      2007          2006
                                                   ----------    ----------

Current Liabilities:

   Accounts payable and accrued expenses           $    4,046    $    4,096
   Income taxes payable                                   114           264
   Due to franchisees                                     420           268
   Current portion of long term debt                      211           223
   Deferred revenues                                       47            54
   Deferred rent                                           16            14
                                                   ----------    ----------
        Total Current Liabilities                       4,854         4,919
                                                   ----------    ----------

Long Term Debt, Net of Current Maturities               4,963         4,196
Line of Credit                                            962           762

Deferred Rent, Net of Current Portion                     237           223

Minority Interest in Equity of
 Consolidated Limited Partnerships                      7,939         6,506

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                        6,240         6,203
  Retained earnings                                    11,147        10,064
  Treasury stock, at cost, 2,306,909 shares
      at June 30, 2007 and 2,313,277
      shares at September 30, 2006                     (5,907)       (5,895)
                                                   ----------    ----------
      Total Stockholders' Equity                       11,900        10,792
                                                   ----------    ----------
     Total Liabilities and Stockholders' Equity    $   30,855    $   27,398
                                                   ==========    ==========

See accompanying notes to unaudited condensed consolidated financial statements.

                                       5
<page>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES
            UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
         FOR THE THIRTY-NINE WEEKS ENDED JUNE 30, 2007 AND JULY 1, 2006
                                 (In Thousands)

<table>
<caption>

                                                                 JUNE 30,     JULY 1,
                                                                   2007         2006
                                                                 ---------    ---------

                                                                    <c>          <c>
CASH FLOWS FROM OPERATING ACTIVITIES:

Net income                                                       $   1,083    $   1,147
Adjustments to reconcile net income to net cash
      provided by operating activities:
      Depreciation and amortization                                  1,454        1,229
      Amortization of leasehold purchases                              149          108
      Gain on sale of property and equipment                          (393)          --
      Loss on abandonment of property and equipment                     26           10
      Casualty loss                                                     --           64
      Deferred income tax                                                6          (26)
      Deferred rent                                                     16          (14)
      Minority interest in earnings of
         consolidated limited partnerships                             240          345
      Income from unconsolidated limited partnership                    (5)         (23)
      Recognition of deferred revenue                                   (7)          (6)
      Changes in operating assets and liabilities:
           (Increase) decrease in
              Due from franchisees                                     255          (89)
              Other receivables                                        167          (65)
              Inventories                                               13         (118)
              Prepaid expenses                                        (243)        (192)
              Other assets                                            (414)        (954)
            Increase (decrease) in:
              Accounts payable and accrued expenses                    (50)         397
              Income taxes payable                                    (150)         300
              Due to franchisees                                       152          (45)
                                                                 ---------    ---------

     Net cash provided by operating activities                       2,299        2,068
                                                                 ---------    ---------

Cash Flows from Investing Activities:
         Collection on notes and mortgages receivable                    8           12
         Purchase of property and equipment                         (2,417)      (2,356)
         Purchase of leaseholds                                       (955)          --
         Purchase of assets from franchise restaurant                 (100)          --
         Proceeds from sale of fixed assets                            862           --
         Proceeds from sale of marketable securities                   381           --
         Distributions from unconsolidated limited partnership           9           --
         Proceeds from insurance settlement                            112           --
                                                                 ---------    ---------
      Net cash used in investing activities                         (2,100)      (2,344)
                                                                 ---------    ---------

</table>

                                       6
<page>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES
            UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
         FOR THE THIRTY-NINE WEEKS ENDED JUNE 30, 2007 AND JULY 1, 2006
                                 (In Thousands)

                                   (Continued)
<table>
<caption>
                                                                         JUNE 30,     JULY 1,
                                                                           2007        2006
                                                                          -------     -------

                                                                           <c>         <c>
Cash flows from Financing Activities:
     Payment of long term debt                                               (157)       (184)
     Payment of line of credit                                             (1,000)         --
     Proceeds from long term debt                                             172          --
     Proceeds from line of credit                                           1,200         762
     Dividends paid                                                            --        (658)
     Purchase of treasury stock                                               (36)        (95)
     Purchase of minority limited partnership interest                         --          (8)
     Distributions to limited partnership
         minority partners                                                   (777)       (809)
     Proceeds from limited partnership interests                            1,970*      2,005**
     Proceeds from exercise of stock options                                   61         117
                                                                          -------     -------
Net cash provided by financing activities                                   1,433       1,130
                                                                          -------     -------

Net Increase in Cash and Cash Equivalents                                   1,632         854

    Beginning of Period                                                     1,698       2,674
                                                                          -------     -------

    End of Period                                                         $ 3,330     $ 3,528
                                                                          =======     =======
Supplemental Disclosure for Cash Flow Information:
     Cash paid during period for:
         Interest                                                         $   387     $   124
                                                                          =======     =======
         Income taxes                                                     $   747     $   431
                                                                          =======     =======

Supplemental Disclosure of Non-Cash Investing and Financing Activities:
     Purchase of vehicle in exchange for debt                             $    --     $    70
     Purchase of real property in exchange for debt                           700          --
                                                                          =======     =======
</table>

*   exclusive of the Company's  investment in the limited partnership owning the
    restaurant in Pembroke Pines, FL of $380,000.
**  exclusive of the Company's  investment in the limited partnership owning the
    restaurant in Pinecrest, FL of $1,295,000.

See accompanying notes to unaudited condensed consolidated financial statements

                                       7
<page>

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

                                  JUNE 30, 2007

(1) BASIS OF PRESENTATION:

The accompanying  financial  information for the periods ended June 30, 2007 and
July 1, 2006 are unaudited.  Financial  information as of September 30, 2006 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  September 30, 2006.  Operating  results for interim  periods are not
necessarily indicative of results to be expected for a full year.

These  financial  statements  include  estimates  relating to performance  based
officers'  bonuses.  The estimates are reviewed  periodically and the effects of
any revisions  are reflected in the financial  statements in the period they are
determined to be necessary.  Although these  estimates are based on management's
knowledge  of current  events and  actions it may take in the  future,  they may
ultimately differ from actual results.

(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  year  2006  financial  statements  have  been
reclassified to conform to the fiscal year 2007 presentation.

(4)  RECENT ACCOUNTING PRONOUNCEMENTS:

In February  2007,  the FASB issued SFAS 159,  "Fair Value Option for  Financial
Assets  and  Liabilities"  which  permits  an entity to choose to  measure  many
financial  instruments  and  certain  other items at fair  value.  The  standard
contains an amendment to SFAS 115 pertaining to  available-for-sale  and trading
securities.  The objective of the standard is to improve financial  reporting by
providing  entities  with the  opportunity  to mitigate  volatility  in reported
earnings caused by measuring related assets and liabilities  differently without
having to apply complex hedge accounting provisions.  The provisions of SFAS 159
are effective for financial  statements  issued for fiscal years beginning after
November 15, 2007.  The Company does not expect the adoption of Statement 159 at
the beginning of fiscal year 2009 to have a material impact.

In  September  2006,  the  SEC  issued  Staff   Accounting   Bulletin  No.  108,
"Considering   the  Effects  of  Prior  Year   Misstatements   when  Quantifying
Misstatements in Current Year Financial  Statements" (SAB 108). SAB 108 requires
companies to evaluate the  materiality of identified  unadjusted  errors on each
financial

                                       8
<page>

statement and related  disclosures  using both the rollover and the iron curtain
approach. SAB 108 applies to annual financial statements for fiscal years ending
after November 15, 2006. The adoption of SAB 108 at the beginning of fiscal year
2007 did not have a material  impact on the  financial  condition  or results of
operation of the Company.


In September  2006,  the FASB issued SFAS 157, "Fair Value  Measurements"  which
provides  guidance for using fair value to measure assets and  liabilities.  The
standard  applies  whenever  other  standards  require  (or  permit)  assets  or
liabilities  to be  measured  at fair  value but does not expand the use of fair
value in any new  circumstances.  The standard clarifies that for items that are
not actively  traded,  such as certain kinds of  derivatives,  fair value should
reflect  the price in a  transaction  with a market  participant,  including  an
adjustment for risk, not just the company's  mark-to-model  value. SFAS 157 also
requires expanded  disclosure of the effect on earnings for items measured using
unobservable  data.  The  provisions  of SFAS 157 are  effective  for  financial
statements issued for fiscal years beginning after November 15, 2007 and interim
periods  within those fiscal years.  The Company does not expect the adoption of
Statement 157 at the beginning of fiscal year 2009 to have a material impact.

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.  The Company is  currently  evaluating  the impact that the
adoption  of  Interpretation  No. 48 may have upon the  financial  condition  or
results of operation of the Company.

(5)  INVESTMENT IN LIMITED PARTNERSHIPS:

Davie, Florida

On January 2, 2007, a limited  partnership  in which (i) the Company is the sole
general  partner;  and  (ii)  the  Company  and a wholly  owned  subsidiary  are
currently the sole limited  partners,  acquired  personal  property assets and a
leasehold interest in an existing restaurant operation located in Davie, Florida
for $650,000. The Company advanced the purchase price to the limited partnership
and through June 30, 2007,  has advanced an additional  $274,000 for expenses of
the limited  partnership.  The amounts  advanced to the limited  partnership are
used to credit the Company's  obligation to pay for its equity investment in the
limited  partnership  at the same price as other  investors who acquire  limited
partnership interests in the limited partnership. Any excess amounts advanced by
the Company are reimbursed without interest.

Since the limited  partnership  acquired these  restaurant  assets,  it has been
preparing plans to renovate and upgrade the business premises for operation as a
"Flanigan's  Seafood Bar and Grill" restaurant.  Management projects the cost to
carry  out  these  plans  will be  approximately  $2,951,000,  exclusive  of the
$924,000 already advanced by the Company.  The percentage of limited partnership
interest the Company maintains in the limited  partnership will primarily depend
upon the demand for the limited partnership  interests.  The limited partnership
anticipates  that the Davie,  Florida  location  will be open for  business as a
"Flanigan's  Seafood  Bar and Grill"  restaurant  during  the second  quarter of
fiscal year 2008.

Pembroke Pines, Florida

During the third  quarter of fiscal year 2007,  building  permits were issued to
the limited  partnership  which owns the restaurant in Pembroke Pines,  Florida,
enabling  renovations and upgrades to the business  premises

                                       9
<page>

to  proceed.  During  the  third  quarter  of  fiscal  year  2007,  the  limited
partnership also completed a private offering of limited partnership  interests,
raising  gross  proceeds of  $2,350,000.  In addition to being the sole  general
partner  of this  limited  partnership,  the  Company  maintains  a 16%  limited
partnership interest in this limited  partnership.  The limited partnership will
use the gross proceeds to complete the  renovations and upgrades at the Pembroke
Pines,  Florida  location and  anticipates  that this  location will be open for
business as a "Flanigan's  Seafood Bar and Grill"  restaurant  during the fourth
quarter of fiscal year 2007.

(6)   INVESTMENT IN REAL PROPERTY:

Hallandale, Florida

During the third  quarter of fiscal year 2007,  the Company  purchased  the real
property  located  adjacent  to the  parking  lot of the  Company's  combination
restaurant  and  package  liquor  store  located  at 4  North  Federal  Highway,
Hallandale,  Florida,  (Store #31) for  $600,000.  A  residence,  consisting  of
approximately  1,200 square feet, is located upon the property and was leased to
an  unrelated  third party who,  subsequent  to the end of the third  quarter of
fiscal  year 2007,  vacated  the  residence.  The  purchase  price for this real
property was partially  financed with a private  purchase  money mortgage in the
principal  amount of $450,000 from an unrelated third party. The mortgage amount
bears  interest at the rate of ten (10%)  percent per annum,  is amortized  over
thirty (30) years with equal monthly payments of principal and interest, each in
the amount of  $3,949.07,  with the entire  principal  balance  and all  accrued
interest due in ten (10) years.

North Miami, Florida

During the third quarter of fiscal year 2007, the Company sold the real property
located at 732 - 734 N.E.  125th  Street,  North  Miami,  Florida and its rights
under the liquor license for that location for $780,000.  The Company  purchased
this real  property  during the first quarter of fiscal year 2007 for a purchase
price of $250,000 and realized a gain of $393,000 from the sale.

(7)  LINE OF CREDIT:

Under a secured line of credit with a third party financial  institution,  which
matures on December  26, 2008,  the Company is able to borrow up to  $2,600,000.
During the third  quarter of fiscal  year 2007,  the Company did not borrow from
the line of credit, paid monthly installments of interest and in addition,  made
a $1,000,000  principal  payment.  As of June 30, 2007,  the amount  outstanding
under  the  line of  credit  was  $962,000,  with a  remaining  availability  of
$1,638,000.

(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.

(9)  STOCK OPTION PLANS:

The Company has two stock option plans under which  qualified  stock options may
be granted to officers and other  employees  of the Company.  Under these plans,
the exercise price for the qualified  stock options must be at least 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 June 30,  2007,  options to  acquire  50,300
shares were outstanding at an average  exercise price of $6.31 per share.  Under
the plans,  options to aquire an aggregate of 45,000  shares are  available  for
grant.

                                       10
<page>

No stock options were granted during the thirty-nine  weeks ended June 30, 2007,
nor were stock options granted during the thirty-nine weeks ended July 1, 2006.

Stock option exercises during the thirty-nine weeks ended June 30, 2007 and July
1, 2006  resulted  in cash  inflows  to the  Company of  $61,000  and  $117,000,
respectively.  The corresponding  intrinsic value as of the exercise date of the
9,510 and 24,120 stock options exercised during the thirty-nine weeks ended June
30, 2007 and July 1, 2006 were $45,000 and $124,000, respectively.

Stock option activity  during the  thirty-nine  weeks ended June 30, 2007 was as
follows:

                                                             Weighted Average
                                              Total Options   Exercise Price
                                              -------------   --------------
     Outstanding at September 30, 2006            67,850           $6.27

              Granted                               --              --
              Exercised                          (9,510)           $6.23
              Expired                            (8,040)           $6.11
                                                 -------           -----

     Outstanding at June 30, 2007                 50,300           $6.31
                                                 =======           =====

     Options exercisable at June 30, 2007         50,300           $6.31
                                                 =======           =====

The  weighted-average  remaining  contractual terms of stock options outstanding
and stock options exercisable at June 30, 2007 was approximately 1.47 years. The
aggregate  intrinsic value of options  outstanding and stock options exercisable
at June 30, 2007 was approximately $251,000.

(10)  COMMITMENTS AND CONTINGENCIES:

Guarantees

The Company guarantees various leases for franchisees, limited partnerships that
own restaurants and locations sold in prior years.  Remaining rental commitments
required  under these  leases are  approximately  $1,231,000.  In the event of a
default  under  any of these  agreements,  the  Company  will  have the right to

                                       11
<page>

repossess  the premises  and operate the business to recover  amounts paid under
the guarantee either by liquidating assets or operating the business.

Litigation

The Company owns the building where its corporate offices are located.  On April
16, 2001,  the Company  filed suit  against the owner of the  adjacent  shopping
center to determine the Company's right to non-exclusive parking in the shopping
center.  During the second  quarter of fiscal  year 2007,  the  appellate  court
affirmed  the granting of a summary  judgment in favor of the  shopping  center.
During  the third  quarter  of fiscal  year  2007,  the  appellate  court,  upon
re-hearing,  again  affirmed the granting of a summary  judgment in favor of the
shopping  center.  The seller from whom the Company  purchased  the building was
named as a defendant in the lawsuit and is currently  asserting a claim  against
the Company for  reimbursement  of its attorneys'  fees and costs resulting from
the litigation.

During  the first  quarter of fiscal  year 2007,  the  Company  and the  limited
partnership  which owns the restaurant in Pinecrest,  Florida filed suit against
the limited partnership's  landlord. The Company is the sole general partner and
a 39% limited  partner in this  limited  partnership.  The Company is seeking to
recover the cost of structural  repairs to the business premises paid for by the
Company,  which it contends were the landlord's  responsibility under the lease.
The lawsuit,  in addition to attempting  to recover the amounts  expended by the
Company for  structural  repairs is also  attempting to recover the rent paid by
limited partnership while the repairs were occurring.  The claim also includes a
request by the limited  partnership  for the court to  determine  if the limited
partnership has the exclusive right to the use of the pylon sign in front of the
business  premises.  The  landlord  filed its  answer to the  complaint  denying
liability  for  structural  repairs  to  the  business  premises,   denying  any
obligation  to  reimburse  the  limited  partnership  for any  rent  paid  while
structural repairs occurred and denying the limited  partnership's  right to use
the pylon sign. The lawsuit is in the discovery stage.


Certain  states  have  liquor  liability  (dram  shop) laws which allow a person
injured by an "obviously  intoxicated  person" to bring a civil suit against the
business  (or  social  host) who had served  intoxicating  liquors to an already
"obviously  intoxicated  person".  Dram shop  claims  normally  involve  traffic
accidents  and the Company  generally  does not learn of dram shop claims  until
after a claim is filed and then the Company  vigorously  defends these claims on
the  grounds,  among  others,  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, "General  Liability
Insurance" on page 14 of the Company's Annual Report on Form 10-K for the fiscal
year ended September 30, 2006 for a discussion of general liability insurance.

(11)  BUSINESS SEGMENTS:

The Company operates principally in two reportable segments - Package stores and
Restaurants. The operation of package stores consists of retail liquor sales and
related items.

Information  concerning  the revenues and operating  income for the thirteen and
thirty-nine weeks ended June 30, 2007 and July 1, 2006, and identifiable  assets
for the two  reportable  segments 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 operate outside of the
United States and transactions between restaurants and package liquor stores are
not material.

                                       12
<page>
<table>
<caption>

                                                      Thirteen Weeks Ending  Thirteen Weeks Ending
                                                           June 30, 2007         July 1, 2006
                                                           -------------         ------------

                                                               <c>                   <c>
Operating Revenues:
   Restaurants                                             $     11,979          $     10,348
   Package stores                                                 3,037                 3,036
   Other revenues                                                   391                   467
                                                           ------------          ------------
      Total operating revenues                             $     15,407          $     13,851
                                                           ============          ============

Operating Income Reconciled to Income Before Income
Taxes and Minority Interests in Earnings of Consolidated
Limited Partnerships
    Restaurants                                            $        246          $        864
    Package stores                                                  116                   160
                                                           ------------          ------------
                                                                    362                 1,024
    Corporate expenses, net of other
       Revenues                                                     (74)                 (374)
                                                           ------------          ------------
    Operating income                                                288                   650
    Other income (expense)                                          304                   (43)
                                                           ------------          ------------
Income Before  Income Taxes and Minority  Interests in
Earnings of Consolidated Limited Partnerships              $        592          $        607
                                                           ============          ============

Depreciation and Amortization:
   Restaurants                                             $        321          $        273
   Package stores                                                    57                    57
                                                           ------------          ------------
                                                                    378                   330
   Corporate                                                         88                    96
                                                           ------------          ------------
Total Depreciation and Amortization                        $        466          $        426
                                                           ============          ============

Capital Expenditures:
   Restaurants                                             $        398          $        974
   Package stores                                                    61                    35
                                                           ------------          ------------
                                                                    459                 1,009
   Corporate                                                        671                   231
                                                           ------------          ------------
Total Capital Expenditures                                 $      1,130          $      1,240
                                                           ============          ============

</table>

                                       13
<page>
<table>
<caption>

                                                             Thirty-nine Weeks    Thirty-nine Weeks
                                                                  Ending              Ending
                                                               June 30, 2007        July 1, 2006
                                                               -------------        ------------

                                                                   <c>                 <c>
Operating Revenues:
   Restaurants                                                  $     35,474        $     30,109
   Package stores                                                     10,050              10,228
   Other revenues                                                      1,172               1,239
                                                                ------------        ------------
      Total operating revenues                                  $     46,696        $     41,576
                                                                ============        ============

Operating Income Reconciled to Income Before Income Taxes and
Minority Interests in Earnings of Consolidated
Limited Partnerships
    Restaurants                                                 $      2,490        $      2,699
    Package stores                                                       498                 701
                                                                ------------        ------------
                                                                       2,988               3,400
    Corporate expenses, net of other
       Revenues                                                       (1,178)             (1,577)
                                                                ------------        ------------
    Operating income                                                   1,810               1,823
    Other income (expense)                                               116                 374
                                                                ------------        ------------
Income Before Income Taxes and Minority Interests in
Earnings of Consolidated Limited Partnerships                   $      1,926        $      2,197
                                                                ============        ============

Depreciation and Amortization:
   Restaurants                                                  $      1,005        $        808
   Package stores                                                        180                 169
                                                                ------------        ------------
                                                                       1,185                 977
   Corporate                                                             269                 252
                                                                ------------        ------------
Total Depreciation and Amortization                             $      1,454        $      1,229
                                                                ============        ============

Capital Expenditures:
   Restaurants                                                  $      1,806*       $      1,626
   Package stores                                                        261                 110
                                                                ------------        ------------
                                                                       2,067               1,736
   Corporate                                                           1,106                 690
                                                                ------------        ------------
Total Capital Expenditures                                      $      3,173*       $      2,426
                                                                ============        ============
*includes $56,000 in assets from purchase of
  franchised restaurant.
</table>

                                             June 30,     September 30,
                                               2007           2006
                                           ------------   ------------
Identifiable Assets:
   Restaurants                             $     17,074   $     15,635
   Package store                                  3,655          3,602
                                           ------------   ------------
                                                 20,729         19,237
   Corporate                                     10,126          8,161
                                           ------------   ------------
Consolidated Totals                        $     30,855   $     27,398
                                           ============   ============

                                       14
<page>

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 September 30, 2006 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.

OVERVIEW

At June 30, 2007, the Company (i) operated 22 units,  consisting of restaurants,
package liquor  stores,  combination  restaurants/package  liquor stores and one
adult   entertainment  club;  and  (ii)  franchised  an  additional  six  units,
consisting  of two  restaurants  and four  combination  restaurants  and package
liquor stores.  The table below provides  information  concerning the type (i.e.
restaurant, package liquor store or combination restaurant/package liquor store)
and ownership of the units, (i.e. whether (i) the Company owns 100% of the unit;
(ii) the unit is owned by a  limited  partnership  of which the  Company  is the
general  partner  and/or has invested in; or (iii) the unit is franchised by the
Company) as of June 30, 2007 and as compared to  September  30, 2006 and July 1,
2006.  Restaurants  operate under the service mark  "Flanigan's  Seafood Bar and
Grill" and package  liquor  stores  operate  under the service mark "Big Daddy's
Liquors".

<table>
<caption>

Types of Units                                          June 30, 2007       Sept 30, 2006     July 1, 2006
--------------                                          -------------       -------------     ------------

                                                           <c>                 <c>               <c>        <c>
Company Owned:
     Combination package and restaurant                       4                   4                 4
     Restaurant only                                          3                   2                 2          (1)
     Package store only                                       5                   5                 5

Company Operated Restaurants Only:
     Limited Partnerships                                     7                   7                 6          (2)
     Franchise                                                1                   1                 1
     Unrelated Third Party                                    1                   1                 1

Company Owned Club:                                           1                   1                 1

Total Company Owned/Operated Units                            22                 21                20
Franchised Units                                              6                   7                 7          (3)

</table>

                                       15
<page>

Notes:
(1)  Includes a  restaurant  located in Lake  Worth,  Florida  which the Company
acquired  from a  franchisee  during the second  quarter of fiscal year 2007 and
which commenced operating as a Company owned restaurant on March 4, 2007.

(2)  Includes a restaurant  located in  Pinecrest,  Florida  which is owned by a
limited  partnership  in which the Company is the sole general  partner and owns
39% of the limited  partnership  interest and commenced  operating on August 14,
2006.

(3) The  Company  operates a  restaurant  for one (1)  franchisee.  This unit is
included in the table both as a franchised  restaurant,  as well as a restaurant
operated by the Company.

<table>
<caption>

RESULTS OF OPERATIONS

                             -----------------Thirteen Weeks Ended------------------
                                    June 30, 2007                 July 1, 2006
                                    -------------                 ------------
                                Amount                       Amount
                                ------                       ------
                            (In thousands)    Percent    (In thousands)    Percent
                             ------------   -----------   ------------   -----------

                          <c>                  <c>     <c>                  <c>
Restaurant food sales        $      9,773         65.08   $      8,405         62.80
Restaurant bar sales                2,206         14.69          1,943         14.52
Package store sales                 3,037         20.23          3,036         22.68
                             ------------   -----------   ------------   -----------

     Total Sales             $     15,016        100.00   $     13,384        100.00

Franchise related revenues            279                          291
Owner's fee                            71                           96
Other operating income                 41                           80
                             ------------                 ------------

     Total Revenue           $     15,407                 $     13,851
                             ============                 ============
<caption>
                             ---------------Thirteen-Nine Weeks Ended---------------
                                    June 30, 2007                 July 1, 2006
                                    -------------                 ------------
                                Amount                       Amount
                                ------                       ------
                            (In thousands)    Percent    (In thousands)    Percent
                             ------------   -----------   ------------   -----------

                                 <c>           <c>            <c>           <c>
Restaurant food sales        $     28,832         63.33   $     24,440         60.59
Restaurant bar sales                6,642         14.59          5,669         14.05
Package store sales                10,050         22.08         10,228         25.36
                             ------------   -----------   ------------   -----------

     Total Sales             $     45,524        100.00   $     13,384        100.00

Franchise related revenues            887                          837
Owner's fee                           151                          171
Other operating income                134                          231
                             ------------                 ------------

     Total Revenue           $     46,696                 $     41,576
                             ============                 ============
</table>

Franchise Financial Arrangement:  In exchange for the Company providing services
-------------------------------
to its franchisees,  including  management and related services and the right to
use the  service  marks  "Flanigan's  Seafood  Bar and Grill"  and "Big  Daddy's
Liquors",  franchisees are required to (i) pay to the Company a royalty of 3% of
gross sales; and (ii) make advertising  expenditures equal to between 1.5% to 3%
of gross sales.

Limited Partnership Financial Arrangement:  The Company manages and controls the
-----------------------------------------
operations of all  restaurants  owned by limited  partnerships,  except the Fort
Lauderdale,   Florida  restaurant  which  is  owned  by  a  related  franchisee.
Accordingly,  the  results  of  operations  of  all  limited  partnership  owned
restaurants,  except the Fort  Lauderdale,  Florida  restaurant are consolidated
with the Company for accounting purposes.  The results of operations of the Fort
Lauderdale,  Florida  restaurant are accounted for by the Company  utilizing the
equity method.  In general,  until the investors'  cash  investment in a limited
partnership  (including any cash invested by the Company and its  affiliates) is
returned in full, the limited partnership  distributes to the investors annually
out of available cash from the operation of the restaurant up to 25% of the cash
invested in the limited  partnership with no management fee paid to the Company.
Any  available  cash in excess of the 25% of the cash  invested  in the  limited
partnership, is paid one-half (1/2) to the Company as a management fee, with the
balance  distributed  to the  investors.  Once  the  investors  in  the  limited
partnership  have received,  in full,  amounts equal to their cash invested,  an
annual  management fee is payable to the Company equal to one-half (1/2) of cash
available to the limited partnership, with the other one half (1/2) of available
cash distributed to the investors (including the Company and its affiliates). As
of June 30,  2007,  limited  partnerships  owning  three  (3)  restaurants  have
returned all cash  invested and the Company  receives an annual  management  fee
equal to one-half  (1/2) of the cash available for  distribution  by the limited
partnership.  In  addition  to its  receipt of  distributable  amounts  from the
limited partnerships,  the Company receives a fee equal to 3% of gross sales for
use of the service mark "Flanigan's Seafood Bar and Grill".

                                       16
<page>

Comparison of Thirteen Weeks Ended June 30, 2007 and July 1, 2006.
------------------------------------------------------------------

Revenues.  Total  revenue for the thirteen  weeks ended June 30, 2007  increased
$1,556,000 or 11.23% to  $15,407,000  from  $13,851,000  for the thirteen  weeks
ended July 1,  2006.  This  increase  resulted  from  sales from two  restaurant
locations  (the  Pinecrest,   Florida  limited   partnership   owned  restaurant
($1,174,000) and the Company owned Lake Worth,  Florida restaurant  ($421,000)),
offset  by the  declines  in same  store  restaurant  food  and bar  sales.  The
Pinecrest,  Florida  restaurant  opened for  business on August 14, 2006 and the
Lake Worth, Florida restaurant opened for business as a Company owned restaurant
on March 4, 2007. Prior to March 4, 2007, the Lake Worth, Florida restaurant was
franchised by the Company. To a lesser extent, increased revenue is attributable
to increased menu prices.

         Restaurant Food Sales.  Revenue (Sales of food) generated from the sale
         ---------------------
of food  totaled  $9,773,000  for the  thirteen  weeks  ended  June 30,  2007 as
compared to $8,405,000  for the thirteen  weeks ended July 1, 2006. The increase
in restaurant  food sales is due to sales from the  Pinecrest,  Florida and Lake
Worth restaurants. The weekly average of same store restaurant food sales, which
includes six (6) limited partnership restaurants,  was $631,081 and $646,564 for
the  thirteen  weeks  ended  June 30,  2007 and July 1,  2006,  respectively,  a
decrease  of 2.39%.  The Company  anticipates  that  restaurant  food sales will
continue to increase  through  fiscal year 2007 due to, among other things,  the
expected  opening of the new  restaurant  location  in Pembroke  Pines,  Florida
during the fourth quarter of fiscal year 2007.

         Restaurant  Bar Sales.  Revenue  generated  from the sales of alcoholic
         ---------------------
beverages at  restaurants  totaled  $2,206,000 for the thirteen weeks ended June
30, 2007 as compared to  $1,943,000  for the thirteen  weeks ended July 1, 2006.
The increase in restaurant bar sales is due to sales from the Pinecrest, Florida
and Lake Worth  restaurants.  The weekly  average of same store  restaurant  bar
sales, which includes six (6) limited partnership restaurants,  was $145,780 and
$149,469  for the  thirteen  weeks  ended  June  30,  2007  and  July  1,  2006,
respectively,  a decrease of 2.47%.  The decrease in same store  restaurant  bar
sales is consistent with the decrease in same store  restaurant food sales.  The
Company  anticipates that restaurant bar sales will continue to increase through
fiscal year 2007 due to, among other  things,  the  expected  opening of the new
restaurant  location in Pembroke  Pines,  Florida  during the fourth  quarter of
fiscal year 2007.

         Package Store Sales. Revenue generated from sales of liquor and related
         -------------------
items at package stores totaled $3,037,000 for the thirteen weeks ended June 30,
2007 as compared to $3,036,000  for the thirteen  weeks ended July 1, 2006.  The
weekly  average of same store  package store sales was $233,546 and $233,545 for
the thirteen weeks ended June 30, 2007 and July 1, 2006,  respectively.  Package
store  sales  were  stable  during  the  third  quarter  of  fiscal  year  2007,
notwithstanding  increased  competition,  but are expected to decline throughout
the balance of fiscal year 2007. Increased competition has had a greater adverse
impact upon package  store sales when  customers  routinely  make larger  volume
purchases,  which  historically  have been more likely to occur during the first
and second quarters of the Company's fiscal year.

Operating Costs and Expenses. Operating costs and expenses,  (consisting of cost
of merchandise  sold,  payroll and related costs,  occupancy  costs and selling,
general and administrative expenses), for the thirteen weeks ended June 30, 2007
increased  $1,918,000 or 14.53% to $15,119,000 from $13,201,000 for the thirteen
weeks  ended  July 1, 2006.  The  increase  is  primarily  due to the  Company's
expenses related to the Pinecrest,  Florida and Lake Worth,  Florida restaurants
and to a lesser  extent a general  increase in food costs and overall  expenses.
The Company  anticipates  that its operating costs and expenses will continue to
increase  through  fiscal year 2007 due to,  among other  things,  the  expected
opening of the new  restaurant  location in Pembroke  Pines,  Florida during the
fourth quarter of fiscal year 2007.

Gross Profit.  Gross profit is calculated by subtracting the cost of merchandise
sold from sales.

                                       17
<page>

         Restaurant Food and Bar Sales.  Gross profit for food and bar sales for
         -----------------------------
the thirteen weeks ended June 30, 2007 increased to $7,768,000  from  $6,853,000
for the thirteen  weeks ended July 1, 2006. The  Company's  gross profit  margin
(calculated as gross profit reflected as a percentage of sales),  for restaurant
food and bar sales  decreased  to 64.85% for the  thirteen  weeks ended June 30,
2007 compared to 66.23% for the thirteen weeks ended July 1, 2006. This decrease
in gross  profit for  restaurant  and bar sales for the third  quarter of fiscal
2007 was  primarily  due to  increases in food costs,  partially  offset by menu
price increases.

         Package  Store  Sales.  Gross  profit for  package  store sales for the
         ---------------------
thirteen  weeks ended June 30, 2007  increased to $863,000 from $861,000 for the
thirteen weeks ended July 1, 2006. The Company's gross profit margin (calculated
as gross profit  reflected as a percentage of sales) for package store sales was
28.42% for the  thirteen  weeks ended June 30,  2007  compared to 28.36% for the
thirteen  weeks ended July 1, 2006.  The Company  anticipates  the gross  profit
margin for package  store  sales to remain  constant  throughout  the balance of
fiscal year 2007.

Payroll and Related  Costs.  Payroll and related  costs for the  thirteen  weeks
ended June 30, 2007 increased  $398,000 or 9.72% to $4,494,000  from  $4,096,000
for the thirteen weeks ended July 1, 2006.  This increase is attributable to the
Pinecrest,  Florida and Lake Worth, Florida restaurants. The Company anticipates
that its payroll costs and related  expenses  will continue to increase  through
fiscal year 2007 due to, among other  things,  the  expected  opening of the new
restaurant  location in Pembroke  Pines,  Florida  during the fourth  quarter of
fiscal year 2007.

Occupancy Costs.  Occupancy costs  (consisting of rent, common area maintenance,
repairs  and real  property  taxes) for the  thirteen  weeks ended June 30, 2007
increased  $299,000 or 37.38% to $1,099,000 from $800,000 for the thirteen weeks
ended July 1, 2006. This substantial  increase is due to, (i) rental payments at
three additional restaurant locations, (Pembroke Pines, Florida-$36,000,  Davie,
Florida-  $44,000,  and Lake Worth,  Florida-$28,000);  (ii) the amortization of
leasehold  purchases for the Pembroke  Pines,  Florida  restaurant  ($3,800) and
Davie, Florida restaurant ($11,000);  and (iii) increases in real property taxes
and common  area  maintenance,  which  generally  includes  a pro-rata  share of
property  insurance  for units  located  within  shopping  centers.  The Company
anticipates  that its occupancy  costs will continue to increase  through fiscal
year  2007  due to  the  rental  payments  at the  three  additional  restaurant
locations, (Pembroke Pines, Florida, Davie, Florida, and Lake Worth, Florida).

Selling,   General   and   Administrative   Expenses.   Selling,   general   and
administrative expenses (consisting of general corporate expenses, including but
not  limited  to  advertising,   insurance,  professional  costs,  clerical  and
administrative  overhead) for the thirteen  weeks ended June 30, 2007  increased
$506,000 or 19.20% to $3,141,000  from  $2,635,000  for the thirteen weeks ended
July  1,  2006.  This  increase  is  attributable  to the  operation  of the two
additional  restaurant locations and an overall increase in expenses,  including
but not limited to property and windstorm insurance coverage and utilities.  The
Company anticipates that its selling,  general and administrative  expenses will
continue to increase through fiscal year 2007 due to the expected opening of the
new restaurant location in Pembroke Pines,  Florida during the fourth quarter of
fiscal year 2007.

Interest Expense,  Net. Interest expense, net, for the thirteen weeks ended June
30, 2007 increased $76,000 to $129,000 from $53,000 for the thirteen weeks ended
July 1, 2006. This increase was attributable to additional  expenses incurred in
connection  with the  Company's  acquiring  and  making  payments  related  to a
purchase  money  mortgage  utilized to  purchase  real  property in  Hallandale,
Florida, as well as additional borrowings under the Company's line of credit.

Depreciation.  Depreciation for the thirteen weeks ended June 30, 2007 increased
$40,000 or 9.38% to $466,000 from $426,000 for the thirteen  weeks ended July 1,
2006. The increase in depreciation  expense

                                       18
<page>

was due  primarily to the increase in capital  expenditures  resulting  from the
refurbishing  of two Company  owned  restaurants.  As a  percentage  of revenue,
depreciation expense was relatively  consistent over both periods,  representing
3.02% of revenue in the thirteen  weeks ended June 30, 2007 and 3.07% of revenue
in the thirteen weeks ended July 1, 2006.

Other Income and  Expense.  Other income and expenses was income of $304,000 for
the thirteen weeks ended June 30, 2007, as compared to an expense of $43,000 for
the thirteen weeks ended July 1, 2006. Other income and expense for the thirteen
weeks  ended June 30,  2007  includes a gain of  $393,000  from the sale of real
property and an interest expense of $129,000, as compared to an interest expense
of $53,000 for the thirteen  weeks ended July 1, 2006.  The increase in interest
expense is due to the interest paid on the Company's line of credit and mortgage
used for the purchase of the real  property in  Hallandale,  Florida  during the
thirteen  weeks ended June 30, 2007.  Other income and expenses for the thirteen
weeks ended July 1, 2006 includes an insurance recovery, net of casualty loss of
$8,000.

Net Income.  Net income for the  thirteen  weeks  ended June 30, 2007  increased
$224,000 or 110.34% to $427,000 from $203,000 for the thirteen  weeks ended July
1, 2006.  The  increase  in net income was due to the sale of real  property  on
which the Company  recognized a gain of $393,000.  Without  giving effect to the
sale of the real  property,  the  Company  would  have  generated  net income of
$191,000 for the thirteen weeks ended June 30, 2007.


Comparison of Thirty-nine Weeks Ended June 30, 2007 and July 1, 2006.
---------------------------------------------------------------------

Revenues.  Total revenue for the thirty-nine weeks ended June 30, 2007 increased
$5,120,000 or 12.31% to $46,696,000 from  $41,576,000 for the thirty-nine  weeks
ended July 1, 2006. Approximately $4,231,000 or 82.63% of this increase resulted
from  sales  from two  restaurant  locations  (the  Pinecrest,  Florida  limited
partnership  owned  restaurant  ($3,664,000)  and the Company  owned Lake Worth,
Florida  restaurant  ($567,000)).  The Pinecrest,  Florida restaurant opened for
business on August 14, 2006 and the Lake Worth,  Florida  restaurant  opened for
business as a Company owned restaurant on March 4, 2007. Prior to March 4, 2007,
the Lake Worth,  Florida  restaurant was franchised by the Company.  To a lesser
extent, increased revenue is attributable to increased menu prices.

         Restaurant Food Sales.  Revenue (Sales of Food) generated from the sale
         ---------------------
of food at restaurants  totaled $28,832,000 for the thirty-nine weeks ended June
30, 2007 as  compared to  $24,440,000  for the  thirty-nine  weeks ended July 1,
2006. The increase in restaurant  food sales is due to sales from the Pinecrest,
Florida and Lake Worth,  Florida  restaurants.  The weekly average of same store
restaurant food sales, which includes six (6) limited  partnership  restaurants,
was $648,347 and $626,676 for the thirty-nine weeks ended June 30, 2007 and July
1, 2006,  respectively,  an increase  of 3.46%.  The  Company  anticipates  that
restaurant food sales will continue to increase through fiscal year 2007 due to,
among  other  things,  the  expected  opening  of the  Pembroke  Pines,  Florida
restaurant during the fourth quarter of fiscal year 2007.

         Restaurant  Bar Sales.  Revenue  generated  from the sales of alcoholic
         ---------------------
beverages  totaled  $6,642,000 for the thirty-nine  weeks ended June 30, 2007 as
compared  to  $5,669,000  for the  thirty-nine  weeks  ended July 1,  2006.  The
increase in restaurant bar sales is due to sales from the Pinecrest, Florida and
Lake Worth restaurants as well as promotions introduced during fiscal year 2005,
which  continue to increase  restaurant  bar sales.  The weekly  average of same
store  restaurant  bar  sales,  which  includes  six  (6)  limited   partnership
restaurants,  was $152,762 and $145,370 for the thirty-nine weeks ended June 30,
2007 and July 1, 2006,  respectively,  an  increase  of 5.08%.  The  increase in
restaurant  bar sales is consistent  with the increase in same store  restaurant
food sales. The Company anticipates that restaurant bar sales will continue to

                                       19
<page>

increase through fiscal year 2007 due to, among other things, the opening of the
Pembroke  Pines,  Florida  restaurant  during the fourth  quarter of fiscal year
2007.

         Package Store Sales. Revenue generated from sales of liquor and related
         -------------------
items at package stores totaled $10,050,000 for the thirty-nine weeks ended June
30, 2007 as  compared to  $10,228,000  for the  thirty-nine  weeks ended July 1,
2006.  The weekly  average of same store package sales was $257,692 and $262,256
for the thirty-nine weeks ended June 30, 2007 and July 1, 2006, respectively,  a
decrease of 1.74%.  The decrease was primarily due to increased  competition and
package  store sales are  expected to decline  throughout  the balance of fiscal
year 2007.  Increased  competition has had a greater adverse impact upon package
store  sales when  customers  routinely  make  larger  volume  purchases,  which
historically have been more likely to occur during the first and second quarters
of the Company's fiscal year.

Operating Costs and Expenses.  Operating costs and expenses  (consisting of cost
of merchandise  sold,  payroll and related costs,  occupancy  costs and selling,
general and  administrative  expenses) for the thirty-nine  weeks ended June 30,
2007 increased  $5,133,000 or 12.91% to  $44,886,000  from  $39,753,000  for the
thirty-nine  weeks  ended July 1, 2006.  The  increase is  primarily  due to the
Company's  expenses  related to the Pinecrest,  Florida and Lake Worth,  Florida
restaurants and to a lesser extent a general increase in food costs. The Company
anticipates  that its  operating  costs and expenses  will  continue to increase
through fiscal year 2007 due to, among other things, the expected opening of the
Pembroke  Pines,  Florida  restaurant  during the fourth  quarter of fiscal year
2007.

Gross Profit.  Gross profit is calculated by subtracting the cost of merchandise
sold from sales.

         Restaurant Food and Bar Sales. Gross profit for restaurant food and bar
         -----------------------------
sales for the  thirty-nine  weeks ended June 30, 2007  increased to  $23,268,000
from  $19,877,000  for the  thirty-nine  weeks ended July 1, 2006. The Company's
gross profit  margin  (calculated  as gross profit  reflected as a percentage of
sales) for restaurant food and bar sales decreased to 65.59% for the thirty-nine
weeks ended June 30, 2007  compared  to 66.02% for the  thirty-nine  weeks ended
July 1, 2006. This decrease in gross profit for restaurant and bar sales for the
thirty-nine  weeks ended June 30, 2007 was  primarily  due to  increases in food
costs, partially offset by menu price increases.

         Package  Store  Sales.  Gross  profit for  package  store sales for the
         ---------------------
thirty-nine  weeks ended June 30, 2007 decreased to $2,813,000  from  $2,885,000
for the thirty-nine  weeks ended July 1, 2006. The Company's gross profit margin
(calculated  as gross profit  reflected  as a  percentage  of sales) for package
store sales was 27.99% for the thirty-nine weeks ended June 30, 2007 compared to
28.21% for the thirty-nine weeks ended July 1, 2006. The Company anticipates the
gross  profit  margin for  package  store sales to remain  constant  through the
balance of fiscal year 2007.

Payroll and Related Costs.  Payroll and related costs for the thirty-nine  weeks
ended  June  30,  2007  increased  $1,194,000  or  10.03%  to  $13,098,000  from
$11,904,000  for the  thirty-nine  weeks  ended July 1, 2006.  This  increase is
attributable to the operation of the two additional  restaurant  locations.  The
Company anticipates that its payroll costs and related expenses will continue to
increase  through  fiscal year 2007 due to,  among other  things,  the  expected
opening of the Pembroke Pines,  Florida  restaurant during the fourth quarter of
fiscal year 2007.

Occupancy Costs.  Occupancy costs  (consisting of rent, common area maintenance,
repairs and real property taxes) for the  thirty-nine  weeks ended June 30, 2007
increased  $465,000 or 19.39% to $2,863,000  from $2,398,000 for the thirty-nine
weeks  ended  July 1,  2006.  This  substantial  increase  is due to, (i) rental
payments   at  three   additional   restaurant   locations,   (Pembroke   Pines,
Florida-$89,000, Davie, Florida- $92,000, and Lake Worth, Florida-$35,000); (ii)
the  amortization  of  leasehold  purchases  for  the  Pembroke  Pines,  Florida
restaurant  ($10,000)  and  Davie,  Florida  restaurant  ($22,000);   and  (iii)

                                       20
<page>

increases in real property taxes and common area  maintenance,  which  generally
includes  a  pro-rata  share of  property  insurance  for units  located  within
shopping centers. The Company anticipates that its occupancy costs will continue
to increase  through  fiscal year 2007 due to the rental  payments for the three
additional  restaurant locations,  (Pembroke Pines, Florida,  Davie, Florida and
Lake Worth, Florida).

Selling,   General   and   Administrative   Expenses.   Selling,   general   and
administrative expenses (consisting of general corporate expenses, including but
not  limited  to  advertising,   insurance,  professional  costs,  clerical  and
administrative overhead) for the thirty-nine weeks ended June 30, 2007 increased
$1,606,000 or 20.39% to $9,482,000  from  $7,876,000 for the  thirty-nine  weeks
ended July 1, 2006.  This increase is  attributable  to the operation of the two
additional restaurant locations and an overall increase in expenses. The Company
anticipates that its selling,  general and administrative expenses will continue
to  increase  through  fiscal year 2007 due to the  expected  opening of the new
restaurant  location in Pembroke  Pines,  Florida  during the fourth  quarter of
fiscal year 2007.

Interest Expense,  Net.  Interest expense,  net, for the thirty-nine weeks ended
June 30, 2007 increased  $263,000 to $387,000 from $124,000 for the  thirty-nine
weeks ended July 1, 2006. This increase was attributable to additional  expenses
incurred in connection  with the Company's  purchase money mortgage  utilized to
purchase real property in Hallandale,  Florida as well as additional  borrowings
under the Company's line of credit.

Depreciation.  Depreciation  for the  thirty-nine  weeks  ended  June  30,  2007
increased  $225,000 or 18.31% to $1,454,000  from $1,229,000 for the thirty-nine
weeks ended July 1, 2006. The increase in depreciation expense was due primarily
to the increase in capital expenditures resulting from the refurbishing of three
Company owned restaurants. As a percentage of revenue,  depreciation expense was
relatively  consistent over both periods,  representing  3.11% of revenue in the
thirty-nine  weeks ended June 30,  2007 and 2.96% of revenue in the  thirty-nine
weeks ended July 1, 2006.

Other Income and  Expense.  Other income and expenses was income of $116,000 and
$374,000  for the  thirty-nine  weeks  ended  June 30,  2007  and July 1,  2006,
respectively.  Other income and expense for the thirty-nine weeks ended June 30,
2007  includes a gain of $393,000 from the sale of real property and an interest
expense of  $387,000,  as compared to an  interest  expense of $124,000  for the
thirty-nine  ended July 1, 2006. The increase in interest  expense is due to the
interest paid on the Company's line of credit and mortgage used for the purchase
of the  membership  interest of the  limited  liability  company  which owns the
property in  Hallandale,  Florida  during the  thirty-nine  weeks ended June 30,
2007.  Other income and expenses  for the  thirty-nine  weeks ended July 1, 2006
includes insurance recovery,  net of casualty loss of income of $442,000.

Net Income.  Net income for the thirty-nine  weeks ended June 30, 2007 decreased
$64,000 or 5.57% to $1,083,000 from  $1,147,000 for the thirty-nine  weeks ended
July 1, 2006. The Company's net income during the  thirty-nine  weeks ended June
30,  2007  includes a gain of  $393,000  on the sale of real  property.  Without
giving effect to the sale of the real property, the Company would have generated
net income of $813,000 for the thirty-nine  weeks.  The Company's net income was
adversely  affected during the  thirty-nine  weeks ended June 30, 2007 by higher
food costs and  overall  expenses,  including  electric,  gas and real  property
taxes, property and windstorm insurance coverage and interest expense due to the
mortgage on the Company's Hallandale property and its line of credit.

                                       21
<page>

New Limited Partnership Restaurants

Management  anticipates that limited  partnership owned  restaurants  located in
Pembroke  Pines,  Florida and Davie,  Florida will open for business  during the
fourth  quarter of fiscal year 2007 and the second  quarter of fiscal year 2008,
respectively. As new restaurants open, the Company's income from operations will
be adversely affected due to its obligation to fund pre-opening costs, including
but  not  limited  to  pre-opening  rent  for  the  new  locations.  During  the
thirty-nine  weeks  ended  June  30,  2007,  the  Company  recognized   non-cash
pre-opening  rent in the  approximate  amount of  $18,000  and  recognized  cash
pre-opening  rent in the  approximate  amount of $71,000 for the Pembroke Pines,
Florida  restaurant.  During the  thirty-nine  weeks  ended June 30,  2007,  the
Company also paid and expensed  pre-opening  rent in the  approximate  amount of
$92,000 for the Davie,  Florida  restaurant,  which is the full rent provided in
the lease. During the thirty-nine weeks ended July 1, 2006, the Company paid and
expensed  pre-opening  rent  for  the  Pinecrest,  Florida  restaurant,  in  the
approximate  amount of $153,000,  which was the full rent provided in the lease.
The Company is  recognizing  rent expense on a straight line basis over the term
of the lease.

Throughout  the balance of fiscal  year 2007,  income  from  operations  will be
adversely  affected  by  pre-opening   costs,   including  but  not  limited  to
pre-opening  rent,  to be incurred  for the Pembroke  Pines,  Florida and Davie,
Florida  restaurants.  Management  believes  that  the  Company's  current  cash
availability  from its line of credit and expected cash from  operations will be
sufficient to fund  operations  and capital  expenditures  for at least the next
twelve months.

Trends

During  the  next  twelve  months  management  expects  continued  increases  in
restaurant  sales,  due  primarily  to the  Pinecrest,  Florida  and Lake Worth,
Florida  restaurants  being  open for the  entire  twelve  month  period and the
anticipated  opening  of  the  Pembroke  Pines,   Florida  and  Davie,   Florida
restaurants.  Package  store sales are  expected to decrease  due  primarily  to
increased  competition.  Management  also expects  higher food costs and overall
expenses to increase.  In December  2006,  the Company raised its menu prices to
offset  higher food costs and overall  expenses and will  continue to do so when
necessary and wherever competitively possible.

Liquidity and Capital Resources

The Company funds  operations  through cash from operations and borrowings under
its line of credit.  As of June 30, 2007, the Company had cash of  approximately
$3,330,000,  an  increase  of  $1,632,000  from the  Company's  cash  balance of
$1,698,000 as of September  30, 2006.  The increase in cash was due primarily to
the  Company's  sale for cash of real  property  resulting  on  $763,000  of net
proceeds  to the Company and the  Company  receiving  approximately  $300,000 in
reimburment  of  expenses  it  advanced  for  the  limited   partnership   owned
restaurant in Pembroke Pines, Florida.

                                       22
<page>

Cash Flows

The following table is a summary of the Company's cash flows for the thirty-nine
weeks of fiscal years 2007 and 2006.

                                               ---Thirty-Nine Weeks Ended---
                                               June 30, 2007    July 1, 2006
                                               -------------    ------------
                                                        (in Thousands)

Net cash provided by operating activities       $      2,299    $      2,068
Net cash used in investing activities                 (2,100)         (2,344)
Net cash provided by financing activities              1,433           1,130
                                                ------------    ------------

Net Increase in Cash and Cash Equivalents              1,632             854

Cash and Cash Equivalents, Beginning                   1,698           2,674

Cash and Cash Equivalents, Ending               $      3,330    $      3,528
                                                ============    ============

On January 13, 2006, the Company  declared a cash dividend of 35 cents per share
which was paid on  February  15, 2006 to  shareholders  of record on January 31,
2006.

At its regular  meeting on May 19, 2007, the Board of Directors  determined that
the Company must retain any earnings for the  development  and  operation of its
business and could not declare or pay any cash dividends in the current period.

Capital Expenditures

The Company acquired property and equipment of $3,173,000 (of which $700,000 was
financed) during the thirty-nine weeks ended June 30, 2007, including $1,402,500
for the purchase of real  property and  $615,000  for  renovations  to three (3)
existing Company owned restaurants, as compared to $2,426,000, (of which $70,000
was financed),  during the thirty-nine  weeks ended July 1, 2006, which included
$531,000 as a direct result of damages caused by Hurricane  Wilma. 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 Pinecrest,  Florida  restaurant.
During the third quarter of fiscal year 2006, the limited partnership which owns
the Pinecrest,  Florida restaurant  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.  During the thirty-nine weeks ended July
1, 2006,  the Company also  purchased one (1) vehicle,  for a purchase  price of
$70,000, which vehicle was 100% financed.

In  addition,  during the thirty  nine weeks  ended June 30,  2007,  the Company
purchased  leasehold  interests for the Pembroke Pines,  Florida  ($305,000) and
Davie,  Florida  ($650,000)  locations,  the cost of which is being amortized as
additional rent over the life of the lease.

All of the Company owned units require periodic  refurbishing in order to remain
competitive.  Management  anticipates the cost of this  refurbishment  in fiscal
year 2007 to be approximately $800,000, of which $615,000 has been spent through
June 30, 2007.

Long Term Debt

As of June 30, 2007, the Company had long term debt of  $6,136,000,  as compared
to $2,205,000 as of July 1, 2006, and $5,181,000 as of September 30, 2006.

                                       23
<page>

As of June 30, 2007, the amount  outstanding  under the Company's line of credit
was $962,000.

During the third quarter of fiscal year 2007,  in connection  with the Company's
purchase  of the  real  property  located  adjacent  to the  parking  lot of the
Company's  combination  restaurant  and package  liquor store located at 4 North
Federal Highway,  Hallandale,  Florida, the Company became obligated to repay to
an unaffiliated  third party lender,  a purchase money mortgage in the principal
amount of $450,000.  The mortgage amount bears interest at the rate of ten (10%)
percent  per annum,  is  amortized  over  thirty  (30) years with equal  monthly
payments of principal  and interest,  each in the amount of $3,949.07,  with the
entire principal balance and all accrued interest due in ten (10) years.

Purchase of Company Common Stock

Pursuant to a discretionary plan approved by the Board of Directors,  during the
thirteen  weeks ended June 30, 2007, the Company  purchased  2,500 shares of its
common stock from the Chief Operating Officer and Director of the Company for an
aggregate purchase price of $28,000. During the thirty-nine weeks ended June 30,
2007,  the Company  purchased  3,332 shares of its common stock for an aggregate
purchase price of $36,000,  with 332 shares  purchased from a former employee of
the Company for an aggregate  amount of $3,818 and 500 shares purchased from the
Joseph G. Flanigan Charitable Trust for an aggregate purchase price of $5,190.

Working Capital

The table below summarizes the current assets, current liabilities,  and working
capital for the fiscal quarters ended June 30, 2007, July 1, 2006 and the fiscal
year ended September 30, 2006.

Item                  June 30, 2007   July 1, 2006    Sept 30, 2006
-----                 -------------   -------------   -------------
                                     (in Thousands)

Current Assets        $       7,263   $       7,350   $       6,315
Current Liabilities           4,854           4,583           4,919
                      -------------   -------------   -------------
Working Capital       $       2,409   $       2,767   $       1,396

Working capital as of June 30, 2007 decreased by 12.93% from the working capital
for the fiscal  quarter  ending  July 1, 2006 and  increased  by 72.56% from the
working capital for the fiscal year ending  September 30, 2006.  Working capital
continued to improve  during the fiscal  quarter  ending June 30, 2007 primarily
due to the minimal demand upon the Company's cash flow for  extraordinary  items
during the fiscal quarter.  The Company's  working  capital  improved during the
third quarter of fiscal year 2007 with the completion of its private offering by
the limited partnership which owns the Pembroke Pines, Florida restaurant, which
private  offering  raised the sum of  $2,350,000,  and  reimbursed  the  Company
approximately  $300,000  for  amounts  previously  advanced  in  excess  of  its
investment in the limited partnership.  In addition, during the third quarter of
fiscal year 2007,  the Company sold the real property  located at 732 - 734 N.E.
125th  Street,  North  Miami,  Florida,  realizing  net  sale  proceeds  in  the
approximate  amount of $763,000,  which further  improved the Company's  working
capital.

Off-Balance Sheet Arrangements

The Company does not have off-balance sheet arrangements.

                                       24
<page>

Inflation

The primary  inflationary  factors affecting the Company's  operations are food,
beverage and labor costs.  A large number of  restaurant  personnel  are paid at
rates based upon applicable  minimum wage and increases in minimum wage directly
affect  labor costs.  To date,  inflation  has not had a material  impact on the
Company's operating results.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The Company  does not  ordinarily  hold market risk  sensitive  instruments  for
trading purposes and as of June 30, 2007 held no equity securities.

Interest Rate Risk

At June 30, 2007, of the Company's debt arrangements,  only Borrowings under the
Company's  line of credit bear  interest at a variable  annual rate equal to the
prime rate of interest.  Increases in interest rates may have a material  affect
upon results of operations,  depending upon the outstanding principal balance on
the line of credit from time to time.

At June 30, 2007, 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.

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 June 30,  2007.  Based  upon  that
evaluation, 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 2007,  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 June 30, 2007
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.

                                       25
<page>

                           PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

See  "Litigation"  on page 12 of this  report and Item 1 and Item 3 to Part 1 of
the Annual Report on Form 10-K for the fiscal year ended  September 30, 2006 for
a discussion of other legal proceedings resolved in prior years.

ITEM 1A.  RISK FACTORS

There have been no material changes to the risk factors previously  disclosed in
the Company's Annual Report on Form 10-K for the fiscal year ended September 30,
2006 and in other  reports  filed  from time to time with the SEC since the date
the Company  filed its Form 10-K.  Readers are urged to  carefully  review these
risk  factors  since they may cause the  Company's  results  to differ  from the
"forward-looking  statements"  made in this  report or  otherwise  made by or on
behalf of the  Company.  Those risk  factors  are not the only ones the  Company
faces.  Additional risks not presently known to the Company or other factors not
perceived  by the Company to present  significant  risks to its business at this
time also may impair the  Company's  business  operation.  The Company  does not
undertake to update any of these  forward-looking  statements or to announce the
results of any revisions to these forward-looking  statements except as required
by law.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Purchase of Company Common Stock

Pursuant to a discretionary plan approved by the Board of Directors,  during the
thirteen  weeks ended June 30, 2007, the Company  purchased  2,500 shares of its
common stock from the Chief Operating Officer and Director of the Company for an
aggregate purchase price of $28,000. During the thirty-nine weeks ended June 30,
2007,  the Company  purchased  3,332 shares of its common stock for an aggregate
purchase price of $36,000,  with 332 shares  purchased from a former employee of
the Company for an aggregate  amount of $3,818 and 500 shares purchased from the
Joseph G. Flanigan Charitable Trust for an aggregate purchase price of $5,190.

                                       26
<page>

ITEM 6. EXHIBITS

     The following exhibits are filed with this Report:

            Exhibit     Description
            -------     -----------

            31.1        Certification  of Chief  Executive  Officer  pursuant to
                        Section 302 of the Sarbanes-Oxley Act of 2002.

            31.2        Certification  of Chief  Financial  Officer  pursuant to
                        Section 302 of the Sarbanes-Oxley Act of 2002.

            32.1        Certification of Chief Executive  Officer pursuant to 18
                        U.S.C.  Section 1350, as adopted pursuant to Section 906
                        of the Sarbanes-Oxley Act of 2002.

            32.2        Certification of Chief Financial  Officer pursuant to 18
                        U.S.C.  Section 1350, as adopted pursuant to Section 906
                        of the Sarbanes-Oxley Act of 2002.



                                       27
<page>


                                   SIGNATURES

         In accordance with the  requirements of the Securities  Exchange Act of
1934,  the  registrant  caused  this  report to be  signed on its  behalf by the
undersigned, thereunto duly authorized.

                               FLANIGAN'S ENTERPRISES, INC.


Date: August 14, 2007          /s/ James G. Flanigan
                               -------------------------------------------------
                               JAMES G. FLANIGAN, Chief Executive Officer and
                               President


                               /s/ Jeffrey D. Kastner
                               -------------------------------------------------
                               JEFFREY D. KASTNER, Chief Financial Officer and
                               Secretary (Principal Financial and Accounting
                               Officer)


                                       28