UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10K

(X) ANNUAL REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES
    ACT OF 1934

                   For the fiscal year ended September 28,2002

                                       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 I-6836

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


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


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

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

Securities registered pursuant to Section 12(b) of the Act:

   Common Stock, $.10 Par Value            American Stock Exchange
   ----------------------------            -----------------------
       Title of each Class                  Name of each exchange
                                            on which registered

Securities registered pursuant to Section 12(g) of the Act: NONE

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 [_]

The aggregate market value of the voting stock held by non-affiliates of the
registrant was $5,419,000 as of December 20, 2002.

There were 1,926,470 shares of the Registrant's Common Stock ($0.10) Par Value
outstanding as of September 28, 2002.

                       DOCUMENTS INCORPORATED BY REFERENCE

Information contained in the Registrant's 2003 definitive proxy material has
been incorporated by reference in Items 10, 11, 12 and 13 of Part III of this
Annual Report on Form 10-K.

<PAGE>


                        Exhibit Index Begins on Page 35

                                     PART I
Item 1. Business
----------------

     When used in this report, the words "anticipate", "believe", "estimate",
"will", "may", "intend" and "expect" and similar expressions identify
forward-looking statements. Forward-looking statements in this report include,
but are not limited to, those relating to the general expansion of the Company's
business. Although we believe that our plans, intentions and expectations
reflected in these forward-looking statements are reasonable, we can give no
assurance that these plans, intentions or expectations will be achieved.

General

     Flanigan's Enterprises, Inc., (the "Company") owns and/or operates
restaurants with lounges, package liquor stores and an entertainment oriented
club (collectively the "units"). At September 28, 2002, the Company operated 16
units, and had interests in seven additional units which have been franchised by
the Company. The table below sets out the changes in the type and number of
units being operated.

                         FISCAL  FISCAL  FISCAL
                         YEAR    YEAR    YEAR     NOTE
                         2002    2001    2000     NUMBER
TYPES OF UNITS
-------------------------------------------------------------------
Combination package
 and restaurant           4       4       4
Restaurant only           7       7       6     (1)(2)(3)(4)
Package store only        4       3       4     (5)(6)(7)(8)
Clubs                     1       1       1
-------------------------------------------------------------------
TOTAL - Company
 operated units          16      15      15

FRANCHISED - units        7       7       7     (9)

Notes:

         (1) During the third quarter of fiscal year 1998 the Company formed a
limited partnership and raised funds through a private offering to purchase the
assets of a restaurant in Kendall, Florida and renovate the same for operation
under the "Flanigan's Seafood Bar and Grill" servicemark. The Company acts as
general partner and has a forty percent ownership of the partnership. The
restaurant opened for business on April 9, 2000.

                                      - 1 -
<PAGE>


         (2) During the third quarter of fiscal year 2001, the Company formed a
limited partnership and raised funds through a private offering to purchase the
assets of a restaurant in West Miami, Florida and renovate the same for
operation under the "Flanigan's Seafood Bar and Grill" servicemark. The Company
acts as general partner and has a twenty five percent ownership of the
partnership. The restaurant opened for business on October 11, 2001.

         (3) During fiscal year 2000, the Company received official notification
from the State of Transportation, Department of Transportation, ("DOT"), that
the DOT was exercising its right of eminent domain to "take" the hotel property
upon which a restaurant, operated by the Company as general partner of a limited
partnership, was located. The restaurant was closed at the end of business on
March 30, 2002 and is not included in the table of units.

         (4) During the fourth quarter of fiscal year 2001, a limited
partnership was formed with the Company as general partner, which limited
partnership entered into a sublease agreement to own and operate an existing
restaurant in Weston, Florida. During the fourth quarter of fiscal year 2002,
the sublessor resolved the zoning and related matters and the limited
partnership began raising funds to renovate the business premises for operation
as a "Flanigan's Seafood Bar and Grill" restaurant. With the sale of limited
partnership units during the fourth quarter of fiscal year 2002, the Company no
longer consolidates the limited partnership for financial reporting purposes.
The Company continues to act as the general partner and has a 28 percent
ownership interest in the limited partnership. The restaurant, which had
operated under its existing servicemark, was closed on July 13, 2002 and
building permits were issued to the limited partnership at the start of fiscal
year 2003. The Company anticipates the restaurant will be open for business by
December 31, 2002. The restaurant is included in the table of units.

         (5) During the fourth quarter of fiscal year 2000, the Company entered
into a lease for the operation of a package liquor store in Hialeah, Florida.
This package liquor store opened for business during the first quarter of fiscal
year 2002.

         (6) The lease for one (1) package liquor store owned and operated by
the Company in Lake Worth, Florida expired on December 31, 2000 and the Company
elected not to exercise its five year renewal option to extend the terms of the
same. Consequently the package liquor store was closed permanently, at the close
of business on December 31, 2000.

                                      - 2 -
<PAGE>


         (7) During the fourth quarter of fiscal year 2001, the Company entered
into a ground lease for an out parcel in Hollywood, Florida. The Company plans
to construct a building on the out parcel, one-half (1/2) of which will be used
by the Company for the operation of a package liquor store and the other
one-half (1/2) will be subleased by the Company as retail space. The Company
filed its building plans during the fourth quarter of fiscal year 2002 and
expects the building to be complete and the package store open for business by
the end of fiscal year 2003. This unit is not included in the table of units.

         (8) During the second quarter of fiscal year 2001, the Company
completed renovations to its new corporate offices and relocated to the same.
The new corporate offices consist of a two (2) story building, with space set
aside on the ground floor for a package liquor store. The Company filed the
application for its building permits during the third quarter of fiscal year
2002 and expects the package liquor store to be open for business during fiscal
year 2003. The package liquor is not included in the table of units.

         (9) Since the fourth quarter of 1999, the Company has managed the
restaurant for a franchisee. The franchised restaurant is included in the table
of units as a restaurant operated by the Company and the franchise is also
included as a unit franchised by the Company and in which the Company has an
interest.

         All of the Company's package liquor stores, restaurants and clubs are
operated on leased properties.

         The Company was incorporated in Florida in 1959 and operated in South
Florida as a chain of small cocktail lounges and package liquor stores. By 1970,
the Company had established a chain of "Big Daddy's" lounges and package liquor
stores between Vero Beach and Homestead, Florida. From 1970 to 1979, the Company
expanded its package liquor store and lounge operations throughout Florida and
opened clubs in five other "Sun Belt" states. In 1975, the Company discontinued
most of its package store operations in Florida except in the South Florida
areas of Dade, Broward, Palm Beach and Monroe Counties. In 1982 the Company
expanded its club operations into the Philadelphia, Pennsylvania area as general
partner of several limited partnerships organized by the Company. In March 1985
the Company began franchising its package liquor stores and lounges in the South
Florida area. See Note 10 to the consolidated financial statements and the
discussion of franchised units on page 6.

         During fiscal year 1987, the Company began renovating its lounges to
provide full restaurant food service, and subsequently renovated and added food
service to most of its lounges. The restaurant concept, as the Company offers
it, has been so well received by the public that food sales now represent
approximately 80% of total restaurant sales.

                                     - 3 -
<PAGE>


         The Company's package liquor stores emphasize high volume business by
providing customers with a wide variety of brand name and private label
merchandise at discount prices. The Company's restaurants provide efficient
service of alcoholic beverages and full food service with abundant portions,
reasonably priced, served in a relaxed, friendly and casual atmosphere.

         The Company's principal sources of revenue are the sale of food and
alcoholic beverages.

         The Company conducts its operations directly and through a number of
wholly owned subsidiaries. The operating subsidiaries are as follows:

SUBSIDIARY                                 STATE OF INCORPORATION
----------                                 ----------------------
Flanigan's Management Services, Inc.               Florida
Flanigan's Enterprises, Inc. of Georgia            Georgia
Seventh Street Corp.                               Florida
Flanigan's Enterprises, Inc. of Pa.                Pennsylvania

         The income derived and expenses incurred by the Company relating to the
aforementioned subsidiaries are consolidated for accounting purposes with the
income and expenses of the Company in the consolidated financial statements in
this Form 10-K.

         The Company's executive offices, which are owned by the Company, are
located in a two story building at 5059 N.E. 18th Avenue, Fort Lauderdale,
Florida 33334 and its telephone number at such address is (954) 377-1961.

Corporate Reorganization
------------------------

         As noted in Note 7 to the consolidated financial statements, on
November 4, 1985, the Company, not including any of its subsidiaries, filed a
Voluntary Petition in the United States Bankruptcy Court for the Southern
District of Florida seeking to reorganize under Chapter 11 of the Federal
Bankruptcy Code. The primary purposes of the petition were (1) to reject leases
which were significantly above market rates and (2) to reject leases on closed
units which had been repossessed by, or returned to the Company. On May 5, 1987,
the Company's Plan of Reorganization as amended and modified was confirmed by
the Bankruptcy Court. On December 28, 1987 the Company was officially discharged
from bankruptcy. During the third quarter of fiscal year 2002, the remaining
liabilities under the Plan were paid in full. See Note 7 to the consolidated
financial statements for a discussion of the bankruptcy proceedings to date and
Item 7 for a discussion of the effect of the bankruptcy proceedings herein.



                                      - 4 -
<PAGE>


Financial Information Concerning Industry Segments
--------------------------------------------------

         The Company's business is carried out principally in two segments: the
restaurant segment and the package liquor store segment.

         Financial information broken into these two principal industry segments
for the three fiscal years ended September 28, 2002, September 29, 2001 and
September 30, 2000 is set forth in the consolidated financial statements which
are attached hereto, and is incorporated herein by reference.

The Company's Package Liquor Stores and Restaurants
---------------------------------------------------

         The Company's package liquor stores are operated under the "Big Daddy's
Liquors" servicemark and the Company's restaurants are operated under the
"Flanigan's Seafood Bar and Grill" servicemark. The Company's package liquor
stores emphasize high volume business by providing customers with a wide
selection of brand name and private label liquors, beer and wines. The Company
has a policy of meeting the published sales prices of its competitors. The
Company provides extensive sales training to its package liquor store personnel.
All package liquor stores are open six or seven days a week from 9:00-10:00 a.m.
to 9:00-10:00 p.m., depending upon demand and local law. Approximately half of
the Company's units have "night windows" with extended evening hours.

         The Company's restaurants offer full food and alcoholic beverage
service with approximately 80% of their sales being food items. These
restaurants are operated under the "Flanigan's Seafood Bar and Grill"
servicemark. Although these restaurants provide a neighborhood atmosphere, they
have the degree of standardization prevalent in casual dining restaurant chains,
including menu. The interior decor is nautical with numerous fishing and boating
pictures and decorations. Drink prices may vary between locations to meet local
conditions. Food prices are standardized. The restaurants' hours of operation
are from 11:00 a.m. to 1:00-5:00 a.m. The Company continues to develop strong
customer recognition of its "Flanigan's Seafood Bar and Grill" servicemark
through very competitive pricing and efficient and friendly service.

         The Company's package liquor stores and restaurants were designed to
permit minor modifications without significant capital expenditures. However,
from time to time the Company is required to redesign and refurbish its units at
significant cost. See Item 2, Properties and Item 7 for further discussion.


                                      - 5 -
<PAGE>


Franchised Package Liquor Stores and Restaurants
------------------------------------------------

         In March 1985, the Company's Board of Directors approved a plan to
sell, on a franchise basis, up to 26 of the Company's package liquor stores and
lounges in the South Florida area. Under the terms of the franchise plan, the
Company sold the liquor license, furniture, fixtures and equipment of a
particular unit, entered into a sublease for the business premises and a
franchise agreement, whereby the franchisee licensed the "Big Daddy's Liquors"
and "Big Daddy's Lounges" servicemarks in the operation of its business.
Investors purchasing units were required to execute ten year franchise
agreements with a thirty day cancellation provision. The franchise agreement
also provided for a royalty to the Company, in the amount of 1% of gross sales,
plus a contribution to advertising, in an amount between 1-1/2% to 2% of gross
sales. In most cases, the sublease agreement provided for rent in excess of the
amount paid by the Company, in order to realize an additional return of between
2% to 3% of gross sales, depending on a number of factors, including but not
limited to the performance of the particular unit sold and its expected sales
growth.

         As of the end of fiscal year 2002, seven units were franchised. Five of
these units are franchised to members of the family of the Chairman of the Board
and Officers or Directors. The Company had limited response to its franchise
offering and suspended its franchise plan at the end of fiscal year 1986.

         The units that continue to be franchised are doing well and continue to
generate income for the Company. Many of the units that were originally offered
as franchises have been sold outright and are no longer being operated as
Flanigan's or Big Daddy's stores.

Franchised Restaurants
----------------------

         During fiscal year 1995, the Company completed its new franchise
agreement for a franchisee to operate a restaurant under the "Flanigan's Seafood
Bar and Grill" servicemark pursuant to a license from the Company. The new
franchise agreement was drafted jointly with existing franchisees with all
modifications requested by the franchisees incorporated therein. The new
franchise agreement provides the Company with the ability to maintain a high
level of food quality and service at its franchised restaurants, which are
essential to a successful franchise operation. A franchisee is required to
execute a new franchise agreement for the balance of the term of its lease for
the business premises, extended by the franchisee's continued occupancy of the
business premises thereafter, whether by lease or ownership. The new franchise
agreement provides for a royalty to the Company in the amount of approximately
3% of gross sales plus a contribution to advertising in an amount between 1-1/2%
to 3% of gross sales. In

                                      - 6 -
<PAGE>


most cases, the Company does not sublease the business premises to the
franchisee and in those cases where it does, the Company no longer receives rent
in excess of the amount paid by the Company.


         All existing franchisees who operate restaurants under the "Flanigan's
Seafood Bar and Grill" or other authorized servicemarks have executed new
franchise agreements.

Investment in Joint Ventures

         The Company operated a restaurant in Miami, Florida under the
"Flanigan's Seafood Bar and Grill" servicemark pursuant to a limited partnership
agreement through the end of the second quarter of fiscal year 2002. The Company
acts as the general partner and owns a fifty percent limited partnership
interest. The State of Florida, Department of Transportation, ("DOT"), exercised
its right of eminent domain to "take" the hotel property upon which this
restaurant was located and the restaurant closed as the end of business on March
30,2002. The Company, as general partner of the limited partnership, pursued a
claim for the "taking" of the restaurant, including its furniture, fixtures and
equipment, against the DOT and an apportionment claim against the owner of the
hotel property as compensation for its possessory rights to the restaurant
premises and its share of compensation paid by the DOT for its furniture,
fixtures and equipment pursuant to a Stipulated Final Judgment between the DOT
and the owner of the hotel property, ("Stipulated Final Judgment"). The
settlement resulted in approximately $230,000 of income to the Company during
the fiscal year ended September 28, 2002, which is included in "Other Income
(Expense) on Page F-3 of this report. The limited partnership has reserved its
right to seek additional compensation from the DOT for (1) its claim for the
value of the furniture, fixture and equipment located in the restaurant which
were not paid for in the Stipulated Final Judgment; (2) its claim for the value
of its furniture, fixtures and equipment above and beyond the value paid by the
DOT in the Stipulated Final Judgment; and (3) any other rights reserved to the
limited partnership in the Stipulated Final Judgment, which additional
compensation will belong solely to the Company. The amount of compensation, if
any, cannot be estimated as of this date.

         During the third quarter of fiscal year 1997, a related party formed a
limited partnership to own a certain franchise in Fort Lauderdale, Florida,
through which it raised the necessary funds to renovate the restaurant for
operation under the "Flanigan's Seafood Bar and Grill" servicemark. The Company
is a twenty five percent owner of the limited partnership as are other related
parties, including, but not limited to officers and directors of the Company and
their families.

                                      - 7 -
<PAGE>


         During the fourth quarter of fiscal year 1997, a limited partnership
was formed which raised funds through a private offering to purchase the assets
of a restaurant in Surfside, Florida and renovate the same for operation under
the "Flanigan's Seafood Bar and Grill" servicemark. The Company acts as general
partner of the limited partnership and is also a forty two percent owner of the
same, as are other related parties, including, but not limited to officers and
directors of the Company and their families. The limited partnership agreement
gives the limited partnership the right to use the "Flanigan's Seafood Bar and
Grill" servicemark for a fee equal to 3% of the gross sales from the operation
of the restaurant, only while the Company acts as general partner. This
restaurant opened for business in the second quarter of fiscal year 1998.

         During the third quarter of fiscal year 1998, a limited partnership was
formed which raised funds through a private offering to acquire and renovate a
restaurant in Kendall, Florida. The Company is general partner of the limited
partnership and is also the owner of forty percent of the same, as are other
related parties, including but not limited to officers and directors of the
Company and their families. The limited partnership agreement gives the
partnership the right to use the "Flanigan's Seafood Bar and Grill" servicemark
for a fee equal to 3% of the gross sales from the operation of the restaurant,
while the Company acts as general partner only. The restaurant opened for
business on April 9, 2000.

         During the third quarter of fiscal year 2000, a limited partnership was
formed which raised funds through a private offering to purchase an existing
restaurant location in West Miami, Florida. The Company is general partner of
the limited partnership and is also the owner of twenty five percent of the same
as are other related parties, including but not limited to officers and
directors of the Company and their families. The limited partnership agreement
gives the partnership the right to use the "Flanigan's Seafood Bar and Grill"
servicemark for a fee equal to 3% of the gross sales from the operation of the
restaurant, while the Company acts as general partner only. The restaurant
opened for business on October 11, 2001.

         During the fourth quarter of fiscal year 2001, a limited partnership
was formed with the Company as general partner, which limited partnership
entered into a sublease agreement to own and operate an existing restaurant in
Weston, Florida. During the fourth quarter of fiscal year 2002, the sublessor
resolved the zoning and related matters and the limited partnership began
raising funds to renovate the business premises for operation as a "Flanigan's
Seafood Bar and Grill" restaurant. With the sale of limited partnership units
during the fourth quarter of fiscal year 2002, the Company no longer
consolidates the limited partnership for financial reporting purposes. The
Company continues to act as

                                      - 8 -
<PAGE>


the general partner of the limited partnership and is also the owner of twenty
eight percent of the same, as are other related parties, including but not
limited to officers and directors of the Company and their families. The limited
partnership agreement gives the partnership the right to use the "Flanigan's
Seafood Bar and Grill" servicemark for a fee equal to 3% of the gross sales from
the operation of the restaurant, while the Company acts as general partner only.
The restaurant, which had operated under its existing servicemark, was closed on
July 13, 2002 and building permits were issued to the limited partnership at the
start of fiscal year 2003. The Company anticipates that the restaurant will be
open for business by December 31, 2002.

Clubs
-----

         As of the end of fiscal year 2002, the Company owned one club in
Atlanta, Georgia, which was operated by an unaffiliated third party, as
discussed below.

Operation of Units by Unaffiliated Third Parties
------------------------------------------------

         During fiscal year 1992, the Company entered into a Management
Agreement with Mardi Gras Management, Inc. for the operation of the Company's
club in Atlanta, Georgia through the balance of the initial term of the lease,
unless sooner terminated by Mardi Gras Management, Inc. upon thirty days prior
written notice, with or without cause. Mardi Gras Management, Inc. assumed the
management of this club effective November 1, 1991 and is currently operating
the club under an adult entertainment format. During fiscal year 1997, the
Company agreed to modify the Management Agreement to give Mardi Gras Management,
Inc. one five year renewal option to extend the term of the same, without the
right to terminate the same upon thirty days prior written notice, with or
without cause, provided the Company was satisfied with the financial condition
of Mardi Gras Management, Inc. within its sole discretion, and Mardi Gras
Management, Inc. agreed to modify the owner's fee to $150,000 per year versus
ten percent of gross sales from the club, whichever is greater. Pursuant to the
Management Agreement, as modified, the Company receives a monthly owner's fee of
$12,500, subject to adjustment each year on or about July 1, with an additional
owners fee equal to 10% of the gross sales exceeding $1,500,000 for the prior 12
month period, being due the Company. During the first quarter of fiscal year
2001, the Company accepted the exercise of the five year renewal option by Mardi
Gras Management upon its receipt of a security deposit of $200,000.
Simultaneously, with its acceptance of the exercise of the renewal option by
Mardi Gras Management, the Company exercised its five year renewal option under
the ground lease for the business premises.


                                      - 9 -
<PAGE>


Operations and Management
-------------------------

         The Company emphasizes systematic operations and control of all units.
Each unit has its own manager who is responsible for monitoring inventory
levels, supervising sales personnel, food preparation and service in restaurants
and generally assuring that the unit is managed in accordance with Company
guidelines and procedures. The Company has in effect an incentive cash bonus
program for its managers and salespersons based upon various performance
criteria. The Company's operations are supervised by area supervisors. Each area
supervisor supervises the operations of the units within his or her territory
and visits those units to provide on-site management and support. There are four
area supervisors responsible for package store, restaurant and club operations
in specific geographic districts.

         All of the Company's managers and salespersons receive extensive
training in sales techniques. The Company arranges for independent third
parties, or "shoppers", to inspect each unit in order to evaluate the unit's
operations, including the handling of cash transactions.

Purchasing and Inventory
------------------------

         The package liquor business requires a constant substantial capital
investment in inventory in the units. Liquor inventory purchased can normally be
returned only if defective or broken.

         All Company purchases of liquor inventory are made through its
purchasing department from the Company's corporate headquarters. The major
portion of inventory is purchased under individual purchase orders with licensed
wholesalers and distributors who deliver the merchandise within one or two days
of the placing of an order. Frequently there is only one wholesaler in the
immediate marketing area with an exclusive distributorship of certain liquor
product lines.

         In September 2002, the Company changed the accounting method for
valuing inventories from first in first out to average cost. See Note 2 in the
consolidated financial statements for more details.

         Substantially all of the Company's liquor inventory is shipped by the
wholesalers or distributors directly to the Company's units. The Company
significantly increases its inventory prior to Christmas, New Year's eve and
other holidays.

         Pursuant to Florida law, the Company pays for its liquor purchases
within ten days of delivery.


                                     - 10 -
<PAGE>


         All negotiations with food suppliers are handled by the Company's
purchasing department at the Company's corporate headquarters. This ensures that
the best quality and prices will be available to each unit. Orders for food
products are prepared by each unit's kitchen manager and reviewed by the unit's
general manager before being placed with the approved vendor. Merchandise is
delivered by the supplier directly to each unit. Orders are placed several times
a week to ensure product freshness. Food inventory is primarily paid for
monthly.

Government Regulation
---------------------

         The Company is subject to various federal, state and local laws
affecting its business. In particular, the units operated by the Company are
subject to licensing and regulation by the alcoholic beverage control, health,
sanitation, safety and fire department agencies in the state or municipality
where located.

         Alcoholic beverage control regulations require each of the Company's
units to apply to a state authority and, in certain locations, county and
municipal authorities, for a license or permit to sell alcoholic beverages on
the premises.

         In the State of Florida, which represents all but one of the total
liquor licenses held by the Company, most of the Company's liquor licenses are
issued on a "quota license" basis. Quota licenses are issued on the basis of a
population count established from time to time under the latest applicable
census. Because the total number of liquor licenses available under a quota
license system is limited and restrictions placed upon their transfer, the
licenses have purchase and resale value based upon supply and demand in the
particular areas in which they are issued. The quota licenses held by the
Company allow the sale of liquor for on and off premises consumption only. In
Florida, the other liquor licenses held by the Company or limited partnerships
of which the Company is the general partner are restaurant liquor licenses,
which do not have quota restrictions and no purchase or resale value. A
restaurant liquor license is issued to every applicant who meets all of the
state and local licensing requirements, including, but not limited to zoning and
minimum restaurant size, seating and menu. The restaurant liquor licenses held
by the Company allow the sale of liquor for on premises consumption only.

         In the State of Georgia, the other state in which the Company operates,
licensed establishments also do not have quota restrictions for on-premises
consumption and such licenses are issued to any applicant who meets all of the
state and local licensing requirements based upon extensive license application
filings and investigations of the applicant.


                                     - 11 -
<PAGE>


         All licenses must be renewed annually and may be revoked or suspended
for cause at any time. Suspension or revocation may result from violation by the
licensee or its employees of any federal, state or local law regulation
pertaining to alcoholic beverage control. Alcoholic beverage control regulations
relate to numerous aspects of the daily operations of the Company's units,
including, minimum age of patrons and employees, hours of operations,
advertising, wholesale purchasing, inventory control, handling, storage and
dispensing of alcoholic beverages, internal control and accounting and
collection of state alcoholic beverage taxes.

         As the sale of alcoholic beverages constitutes a large share of the
Company's revenue, the failure to receive or retain, or a delay in obtaining a
liquor license in a particular location could adversely affect the Company's
operations in that location and could impair the Company's ability to obtain
licenses elsewhere.

         The Company is subject in certain states to "dram shop" or "liquor
liability" statutes, which generally provide a person injured by an intoxicated
person the right to recover damages from an establishment that wrongfully served
alcoholic beverages to such person. See Item 1, Insurance and Item 3, Legal
Proceedings for further discussion. The Company maintains a continuous program
of training and surveillance from its corporate headquarters to assure
compliance with all applicable liquor laws and regulations. During the fiscal
years ended September 30, 2000, September 29, 2001,and September 28, 2002 and
through the present time, no significant pending matters have been initiated by
the Department of Alcohol, Beverages and Tobacco concerning any of the Company's
licenses which might be expected to result in a revocation of a liquor license
or other significant actions against the Company.

         The Company is not aware of any statute, ordinance, rule or regulation
under present consideration which would significantly limit or restrict its
business as now conducted. However, in view of the number of jurisdictions in
which the Company does business, and the highly regulated nature of the liquor
business, there can be no assurance that additional limitations may not be
imposed in the future, even though none are presently anticipated.

         Federal and state environmental regulations have not had a material
effect on the Company's operation.

Insurance
---------

         The Company has general liability insurance which incorporates a
semi-self-insured plan under which the Company assumes the full risk of the
first $50,000 of exposure per occurrence. The


                                     - 12 -
<PAGE>


Company's insurance carrier is responsible for $1,000,000 coverage per
occurrence above the Company's self-insured deductible, up to a maximum
aggregate of $2,000,000 per year. During fiscal year 2000, fiscal year 2001, and
again in fiscal year 2002 the Company was able to purchase excess liability
insurance at a reasonable premium, whereby the Company's excess insurance
carrier is responsible for $4,000,000 coverage above the Company's primary
general liability insurance coverage. The Company is self-insured against
liability claims in excess of $5,000,000.

         The Company's general policy is to settle only those legitimate and
reasonable claims asserted and to aggressively defend and go to trial, if
necessary, on frivolous and unreasonable claims. The Company has established a
select group of defense attorneys which it uses in conjunction with this
program. Under the Company's current liability insurance policy, any expense
incurred by the Company in defending a claim, including adjusters and attorney's
fees, are a part of the $50,000 self-insured retention.

         An accrual for the Company's accounts payable and accrued expenses
include estimated liability claims which is included in the consolidated balance
sheets in the caption " Accounts payable and accrued expenses". A significant
unfavorable judgment or settlement against the Company in excess of its
liability insurance coverage could have a materially adverse effect on the
Company.

Competition and the Company's Market
------------------------------------

         The liquor and hospitality industries are highly competitive and are
often affected by changes in taste and entertainment trends among the public, by
local, national and economic conditions affecting spending habits, and by
population and traffic patterns. The Company believes that the principal means
of competition among package liquor stores is price and that, in general, the
principal means of competition among restaurants include location, type and
quality of facilities and type, quality and price of beverage and food served.

         The Company's package liquor stores compete directly or indirectly with
local retailers and discount "superstores". Due to the competitive nature of the
liquor industry in South Florida, the Company has had to adjust its pricing to
stay competitive, including meeting all competitor's advertisements. Such
practices will continue in the package liquor business. It is the opinion of the
Company's management that the Company has a competitive position in its market
because of widespread consumer recognition of the "Big Daddy's" and "Flanigan's"
names.


                                     - 13 -
<PAGE>


         As previously noted, at September 28, 2002 the Company owned and
operated six restaurants, all of which had formerly been lounges and were
renovated to provide full food service. These restaurants compete directly with
other restaurants serving liquor in the area. The Company's restaurants are
competitive due to four factors; product quality, portion size, moderate pricing
and a standardization throughout the Company owned restaurants and most of the
franchises.

         The Company's business is subject to seasonal effects, in that liquor
purchases tend to increase during the holiday seasons.

Trade Names
-----------

         The Company operates principally under three servicemarks;
"Flanigan's", "Big Daddy's", and "Flanigan's Seafood Bar and Grill". Throughout
Florida the Company's package liquor stores are operated under the "Big Daddy's
Liquors" servicemark. The Company's rights to the use of the "Big Daddy's"
servicemark are set forth under a consent decree of a Federal Court entered into
by the Company in settlement of federal trademark litigation. The consent decree
and the settlement agreement allow the Company to continue, and expand, its use
of the "Big Daddy's "servicemark in connection with limited food and liquor
sales in Florida. The consent decree further contained a restriction upon all
future sales of distilled spirits in Florida under the "Big Daddy's" name by the
other party who has a federally registered servicemark for "Big Daddy's" use in
the restaurant business. The Federal Court retained jurisdiction to enforce the
consent decree. The Company has acquired a registered Federal trademark on the
principal register for its "Flanigan's" servicemark.

         The standard symbolic trademark associated with the Company and its
facilities is the bearded face and head of "Big Daddy" which is predominantly
displayed at all "Flanigan's" facilities and all "Big Daddy's" facilities
throughout the country. The face comprising this trademark is that of the
Company's founder, Joseph "Big Daddy" Flanigan, and is a federally registered
trademark owned by the Company.


Employees
---------

         As of year end, the Company employed 359 employees, of which 248 were
full-time and 111 were part-time. Of these, 29 were employed at the corporate
offices. Of the remaining employees, 39 were employed in package liquor stores
and 291 in restaurants.

         None of the Company's employees are represented by collective
bargaining organizations. The Company considers its labor relations to be
favorable.

                                     - 14 -
<PAGE>


                      EXECUTIVE OFFICERS OF THE REGISTRANT

                        Positions and Offices                 Office or Position
       Name             Currently Held                 Age        Held Since
       ----             ---------------------          ---    ------------------
Joseph G. Flanigan      Chairman of the Board          73            1959
                        of Directors, Chief
                        Executive Officer

James G. Flanigan       President                      38            2002

William Patton          Vice President                 79            1975
                        Community Relations

Edward A. Doxey         Chief Financial Officer        61            1992
                        and Secretary

Jeffrey D. Kastner      Assistant Secretary            49            1995

August Bucci            Vice President of              58            2002
                        Restaurant Operations

Jean Picard             Vice President of              64            2002
                        Package Store
                        Operations

Item 2. Properties
------------------

         The Company's operations are all conducted on leased property with the
exception of the Corporate Headquarters Office Building which was purchased in
December, 1999 and has been occupied by the Company since April 2001. Initially
most of these properties were leased by the Company on long-term ground and
building leases with the buildings either constructed by the lessors under
build-to-suit leases or constructed by the Company. A relatively small number of
business locations involve the lease or acquisition of existing buildings. In
almost every instance where the Company initially owned the land or building on
leased property, the Company entered into a sale and lease-back transaction with
investors to recover a substantial portion of its per unit investment.

         The majority of the Company's leases contained rent escalation clauses
based upon the consumer price index which made the continued profitable
operation of many of these locations impossible and jeopardized the financial
position of the Company. As a result of the Company's inability to renegotiate
these leases, on November 4, 1985 the Company, not including its subsidiaries,
filed a Voluntary Petition in the United States Bankruptcy Court for the
Southern District of Florida seeking to reorganize under Chapter 11 of the
Federal Bankruptcy Code. The primary purpose of the reorganization was to reject
and/or renegotiate the leases on such properties.


                                     - 15 -
<PAGE>


         All of the Company's units require periodic refurbishing in order to
remain competitive. The Company has budgeted $410,000 for its refurbishing
program for fiscal year 2003. See Item 7, "Liquidity and Capital Resources" for
discussion of the amounts spent in fiscal year 2002.

         The following table summarizes the Company's properties as of September
28, 2002 including franchise locations, a club and Company managed locations.


                           Square             License        Lease
Name and Location          Footage   Seats    Owned by       Terms
-----------------          -------   -----    --------       -----

Big Daddy's Liquors #4     2,100      N/A     Company    3/1/02 to 2/28/27
Flanigan's Enterprises                                     and Options to
Inc. (10)                                                  2/28/37
7003 Taft Street
Hollywood, FL

Big Daddy's Liquors #7     1,450      N/A     Company    11/1/00 to 10/31/05
Flanigan's Enterprises                                    and Options to
Inc.                                                      10/31/15
1550 W. 84th Street
Hialeah, FL

Big Daddy's Liquors #8     1,800      N/A     Company    5/1/99 to 4/30/14
Flanigan's Enterprises
Inc.
959 State Road 84
Fort Lauderdale, FL

Flanigan's Seafood Bar     4,300      130     Company    10/1/71 to 12/31/04
and Grill #9                                               and Option to
Flanigan's Enterprises                                     12/31/09
Inc. (1)
1550 W.84th Street
Hialeah, FL

Flanigan's Legends         5,000      150     Franchise  1/4/00 to 1/3/20
Seafood Bar and Grill                                     Option to 1/3/25
#11, 11 Corporation (3)
330 Southern Blvd.
W. Palm Beach, FL

Flanigan's Legends         5,000      180     Franchise  11/15/92 to
Seafood Bar and Grill                                     11/15/12
#12 Galeon Tavern, Inc.    (3)
2401 Tenth Ave. North
Lake Worth, FL

                                     - 16 -
<PAGE>



                           Square             License        Lease
Name and Location          Footage   Seats    Owned by       Terms
-----------------          -------   -----    --------       -----

Flanigan's Seafood         3,320       90     Franchise  6/1/79 to 6/1/04
Bar and Grill #14,                                        Option to 6/1/09
Big Daddy's #14, Inc.  (2)(3)(5)(9)
2041 NE Second St.
Deerfield Beach, FL

                                              Franchise/
Piranha Pats II-#15        4,000       90     Joint      3/2/76 to 8/31/06
CIC Investors #15 Ltd.      (3)(5)            Venture     Option to 8/31/11
1479 E. Commercial Blvd.
Ft. Lauderdale, FL

Flanigan's Seafood         4,300      100     Franchise  2/15/72 to 12/31/05
Bar and Grill #18                                         Options to 12/31/20

Twenty Seven Birds                                       Option to purchase
Corp. (2)(3)(5)
2721 Bird Avenue
Miami, FL

Flanigan's Seafood         4,500      160     Company    3/1/72 to 12/31/05
Bar and Grill #19
Flanigan's Enterprises
Inc. (2)(4)
2505 N. University Dr.
Hollywood, FL

Flanigan's Seafood         5,100      140     Company    7/15/68 to 12/31/03
Bar and Grill #20                                         Annual options
Flanigan's Enterprises                                    until the Company
Inc.  (2)                                                 fails to exercise
13205 Biscayne Blvd.                                      Additional Lease
North Miami, FL                                           5/1/69 to 12/31/03
                                                          Annual options
                                                          until the Company
                                                          fails to exercise

Flanigan's Seafood         4,100      200     Company    12/16/68 to
Bar and Grill #22                                        12/31/05
Flanigan's Enterprises                                    Options to 12/31/20
Inc. (2)(4)                                              Option to purchase
2600 W. Davie Blvd.
Ft. Lauderdale, FL

Flanigan's Enterprises     3,000       90     Company    7/1/50 to 6/30/49
Inc. #27 (8)
732-734 NE 125th St.
North Miami, FL

                                     - 17 -
<PAGE>


                           Square             License        Lease
Name and Location          Footage   Seats    Owned by       Terms
-----------------          -------   -----    --------       -----

Flanigan's Seafood         4,600      150     Company    9/6/68 to 12/31/05
Bar and Grill #31                                         Options to 12/31/20
Flanigan's Enterprises                                   Option to purchase
Inc. (2)
4 N. Federal Highway
Hallandale, FL

Flanigan's Guppy's         4,620      130     Franchise  11/1/68 to 10/31/03
Seafood Bar and Grill #33                                 New Lease
Guppies, Inc. (2)(3)(5)                                  11/1/03 to 12/31/09
45 S. Federal Highway
Boca Raton, FL

Big Daddy's Liquors        3,000      N/A     Company    5/29/97 to 5/28/07
#34, Flanigan's                                           Options to 5/28/17
Enterprises, Inc. (1)
9494 Harding Ave.
Surfside, FL

Flanigan's Seafood         4,600      140     Company    4/1/71 to 12/31/05
 Bar and Grill #40                                        Options to 12/31/15
Flanigan's Enterprises
Inc. (2)
5450 N. State Road 7
Ft. Lauderdale, FL

Piranha Pat's #43          4,500       90     Franchise  12/1/72 to 11/30/07
BD 43 Corporation (2)(3)(5)                               Option to 11/30/12
2500 E. Atlantic Blvd.
Pompano Beach, FL

Big Daddy's Liquors        6,000      N/A     Company    12/21/68 to 1/1/10
#47, Flanigan's                                           Options to 1/1/60
Enterprises, Inc. (6)
8600 Biscayne Blvd.
Miami, FL

Flanigan's Seafood         6,800      200     Joint      8/1/97 to 12/31/11
Bar and Grill #60,                            Venture
CIC Investors #60 Ltd.
9516 Harding Avenue
Surfside, FL

Flanigan's Seafood         4,850      161     Joint      4/1/98 to 3/31/08
Bar and Grill #70                             Venture     Options to 3/31/28
CIC Investors #70 Ltd.
12790 SW 88 St
Kendall, FL
                                     - 18 -
<PAGE>

                           Square             License        Lease
Name and Location          Footage   Seats    Owned by       Terms
-----------------          -------   -----    --------       -----

Flanigan's Seafood         5,000      165     Joint      4/15/01 to 12/14/05
Bar and Grill #80                             Venture     Options to 12/14/19
CIC Investors #80 Ltd.
8695 N.W. 12th St
Miami, FL

Flanigan's Seafood         5,700      235     Joint      7/29/01 to 7/28/16
Bar and Grill #95                             Venture     Options to 7/28/31
CIC Investors #95 Ltd.
2460 Weston Road
Weston, FL

Flanigan's Enterprises    10,000      400     Company    5/1/76 to 4/30/06
#600 (7)
Powers Ferry Landing
Atlanta, GA

(1)  License subject to chattel mortgage.

(2)  License pledged to secure lease rental.

(3)  Franchised by Company.

(4)  Former franchised unit returned and now operated by Company.

(5)  Lease assigned to franchisee.

(6)  Lease assigned to unaffiliated third parties, until December 31, 1996, when
     the Company reacquired ownership through fore-closure. During fiscal year
     1996, the Company purchased 37% of the leasehold interest from the
     unaffiliated third parties. An additional 11% was purchased during fiscal
     year 1997, bringing the total interest purchased to 48%.

(7)  Location managed by an unaffiliated third party.

(8)  Location was closed in May 1998. The Company entered into a five year
     sub-lease agreement, with two five year options, with an unaffiliated third
     party who is presently operating a restaurant at this location.

(9)  Effective December 1, 1998, the Company purchased the Management Agreement
     to operate the franchised restaurant for the franchisee.

(10) Ground lease executed by the Company on September 25, 2001. The Company
     intends to construct a building of approximately 4200 square feet, one half
     (1/2) of which will be used by the Company for the operation of a package
     liquor store and the other one half (1/2) will be subleased as retail
     space.

                                     - 19 -
<PAGE>


Item 3. Legal Proceedings.
--------------------------

         Due to the nature of the business, the Company is sued from time to
time by patrons, usually for alleged personal injuries occurring at the
Company's business locations. The Company has liability insurance which
incorporates a semi-self-insured plan under which the Company assumes the full
risk of the first $50,000 of exposure per occurrence. The Company's primary
general liability insurance carrier is responsible for $1,000,000 coverage per
occurrence above the Company's self-insured deductible, up to a maximum
aggregate of $2,000,000 per year. During the fiscal year 2000, fiscal year 2001,
and again in fiscal year 2002, the Company was able to purchase excess liability
insurance, at a reasonable premium, whereby the Company's excess insurance
carrier is responsible for $4,000,000 coverage above the Company's primary
general liability insurance coverage. Certain states have liquor liability (dram
shop) laws which allow a person injured by an "obviously intoxicated person" to
bring a civil suit against the business (or social host) who had served
intoxicating liquors to an already "obviously intoxicated person". Dram shop
claims normally involve traffic accidents and the Company generally does not
learn of dram shop claims until after a claim is filed and then the Company
vigorously defends these claims on the grounds that its employee did not serve
an "obviously intoxicated person". Damages in most dram shop cases are
substantial. At the present time, there are no dram shop cases pending against
the Company. The Company has in place insurance coverage to protect it from
losses, if any.

         On November 4, 1985 the Company, not including its subsidiaries, filed
a Voluntary Petition in the United States Bankruptcy Court for the Southern
District of Florida seeking to reorganize under Chapter 11 of the Federal
Bankruptcy Code. The Petition, identified as case no. 85-02594-BKC-AJC was filed
in Fort Lauderdale, Florida. By Order of the Court dated November 4, 1985, the
Company was appointed "debtor in possession". The Company's action was a result
of significant escalations of rent on certain of the Company's leases which made
continued profitable operations at those locations impossible and jeopardized
the Company's financial position. The major purpose of the reorganization was to
reject such leases.

         On January 11, 1986, the Bankruptcy Court granted the Company's motions
to reject thirteen leases and the Company was successful in negotiating the
termination of three additional leases. On April 7, 1986, the Bankruptcy Court
granted the Company's motion to reject two additional leases and two more leases
were automatically rejected due to the Company's failure to assume the same
prior to May 22, 1986. During the fiscal year ended October 3, 1987 the Company
negotiated a formula with the Official Committee of Unsecured Creditors
("Committee"), which formula was used to calculate lease rejection damages under
the Company's

                                     - 20 -
<PAGE>


Amended Plan of Reorganization. Stipulations were filed by the Company with all
but three of these unsecured creditors, which stipulations received Bankruptcy
Court approval prior to the hearing on confirmation.

         In addition to the rejection of leases, the Company also sought its
release from lease agreements for businesses sold, which sales included the
assignment of the leases for the business premises. While several landlords
whose leases had been assigned did file claims against the Company, the majority
did not, which resulted in the Company being released from its guarantees under
those leases. The Company was also successful in negotiating the limitation or
release of lease guarantees of those landlords who filed claims, which
settlements received Bankruptcy Court approval prior to the hearing on
confirmation.

         On February 5, 1987, the Company filed its Amended Plan of
Reorganization and Amended Disclosure Statement, which documents were approved
by the Committee. On February 25, 1987, the Company further modified its Amended
Plan of Reorganization to secure the claims of Class 6 Creditors (Lease
Rejection) and Class 8 Creditors (Lease Guarantee Rejections). The Bankruptcy
Court approved the Amended Disclosure Statement by Order dated March 7, 1987 and
scheduled the hearing to consider confirmation of the Amended Plan of
Reorganization on April 13, 1987. On April 10, 1987, in order to insure receipt
of the necessary votes to approve its Amended Plan of Reorganization, the
Company agreed to further modification of its Amended Plan, whereby creditors of
Class 6 and 8 received $813,000 prorata as additional damages under the terms of
the Amended Plan. On April 13, 1987, the Company's Amended Plan of
Reorganization was confirmed and the Bankruptcy Court entered its Order of
Confirmation on May 5, 1987.

         Pursuant to the terms of the Amended Plan of Reorganization, the
Effective Date of the same was June 30, 1987. As of that date, confirmation
payments totaling $1,171,925 were made by the Company's Disbursing Agent with
$647,226 being retained in escrow for disputed claims ($1,819,151 total). The
Bankruptcy Court ratified the disbursements made by the Disbursing Agent by its
Order dated December 21, 1987.

         On December 28, 1987, the Bankruptcy Court entered its Notice of
Discharge of the Company.

         During fiscal year 1991 and again during fiscal year 1992, the Company
and Class 6 and Class 8 Creditors under the Company's Amended Plan of
Reorganization modified the schedule for the payment of bankruptcy damages,
reducing the amount of the quarterly payments by extending the term of the same,
but without reducing the total amount of bankruptcy damages. The modification to
the payment schedule provided the Company with needed capital.


                                     - 21 -
<PAGE>


         During the third quarter of fiscal year 2002, the remaining liabilities
under the Amended Plan of Reorganization were paid in full.

         During fiscal year 2000, the Company was served with several complaints
alleging violations of the Americans with Disabilities Act, ("ADA"), at all of
its locations. The lawsuits included the restaurants owned by the limited
partnerships and franchises. The sudden influx of lawsuits alleging ADA
violations was due to the fact that it was anticipated at the time that the ADA
was going to be amended to include a provision requiring plaintiffs to provide
the potential defendant with 90 days notice of ADA violations prior to filing
suit, during which time the violations may be corrected. The amendment has not
yet been enacted and as of now, the ADA still has no notice provision and the
first time that the Company received notice of any ADA violations was when it
was served with a copy of the complaint. Of the law suits filed, only a few have
been actively pursued. The Company has retained an ADA expert who has inspected
locations involved in active lawsuits, including the limited partnerships and
franchises, and provided a report setting forth ADA violations which need to be
corrected. It is the Company's intent to correct ADA violations noted by its ADA
expert and then vigorously defend the lawsuits arguing that the locations are in
compliance. During fiscal year 2001 and fiscal year 2002, the Company, including
three (3) of its franchises, settled all active law suits alleging ADA
violations.


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

         During the fourth quarter of fiscal year 2002 the Company did not
submit any matter to a vote of the security holders.


                                     PART II
                                     -------

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.
------------------------------------------------------------------------------

                    Fiscal 2002     Fiscal 2001    Fiscal 2000
                    -----------     -----------    -----------
                    High    Low     High    Low    High    Low
                    ----    ---     ----    ---    ----    ---

First quarter       6.20    4.25    4.38    3.75   6.25   4.25
Second quarter      6.21    5.65    4.65    3.75   5.63   4.13
Third quarter       7.20    6.00    5.00    4.06   4.75   3.75
Fourth quarter      6.85    5.40    6.45    4.35   4.63   3.75

     On February 14, 2000 the Company declared a cash dividend of 11 cents per
share payable March 17, 2000 to shareholders of record as of March 1, 2000.


                                     - 22 -
<PAGE>


         On February 13, 2001 the Company declared a cash dividend of 12 cents
per share payable March 17, 2001 to shareholders of record as of March 1, 2001.

         On December 13, 2001 the Company declared a cash dividend of 25 cents
per share payable on January 17, 2002 to shareholders of record on December
30,2001.

Item 6. Selected Financial Data.
--------------------------------

<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------------------
                                      1998             1999              2000            2001              2002
--------------------------------------------------------------------------------------------------------------------
Statement of Operations Data
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
<S>                               <C>               <C>               <C>             <C>               <C>
Revenue                           $21,767,000       $22,315,000       $25,160,000     $26,704,000       $28,297,000

--------------------------------------------------------------------------------------------------------------------
Income from Operations              1,384,000         1,543,000         1,780,000       2,004,000         2,090,000

--------------------------------------------------------------------------------------------------------------------
Net income                          1,388,000         2,368,000         1,364,000       1,529,000         1,383,000
--------------------------------------------------------------------------------------------------------------------
Earnings per share                   $   1.51          $   1.21          $   0.73        $   0.80          $   0.71
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
Balance Sheet Data
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
Total assets                       $9,043,000       $10,772,000       $11,209,000     $12,757,000       $13,192,000
--------------------------------------------------------------------------------------------------------------------
Long term liabilities               1,696,000         1,099,000         1,406,000       1,715,000         1,349,000
--------------------------------------------------------------------------------------------------------------------
Net working capital                 1,214,000         1,382,000         1,283,000       2,440,000         2,506,000
--------------------------------------------------------------------------------------------------------------------
Stockholders' equity                5,105,000         6,980,000         7,667,000       8,968,000         9,957,000
--------------------------------------------------------------------------------------------------------------------
Dividends declared                          -           186,000           215,000         231,000           499,000
--------------------------------------------------------------------------------------------------------------------
</TABLE>

Item 7. Management's Discussion and Analysis of Financial Condition and Results
-------------------------------------------------------------------------------
of Operations.
--------------

         As of September 28, 2002, the Company was operating sixteen units. The
Company had interests in an additional six units which had been franchised by
the Company. Of the units operated by the Company, four were combination package
liquor store and restaurant, seven were restaurants only and four were package
liquor stores only. There was one club operated by an unaffiliated third party
under a management agreement. During fiscal year 2001, one package liquor store
only was closed with the expiration of its lease and the liquor license was sold
during the first quarter of fiscal year 2002 to an unaffiliated third party.
During fiscal year 2000, one restaurant only, owned by a limited partnership of
which the Company acts as general partner, was opened for business. During
fiscal year 2001, another restaurant only was acquired by a limited partnership
of which the Company acts as general partner. The restaurant, which was being
operated by the Company under the restaurant's servicemark, was closed during
the fourth quarter of fiscal year 2002 and is currently being renovated for
operation

                                     - 23 -
<PAGE>


under the "Flanigan's Seafood Bar and Grill" servicemark. During fiscal year
2001, the Company also entered into a ground lease to construct a building for
the operation of a package liquor store only from one half (1/2) of the building
and sublease retail space with the other one half (1/2). At the start of fiscal
year 2001, one restaurant only , owned by a limited partnership of which the
Company acts as general partner, was opened for business.

Liquidity and Capital Resources
-------------------------------

Cash Flows
----------

     The following table is a summary of the Company's cash flows for the fiscal
years ended September 28, 2002, September 29, 2001 and September 30, 2000:

<TABLE>
<CAPTION>

---------------------------------------------------------------------------------------------------
                                                       Fiscal Years Ended
---------------------------------------------------------------------------------------------------
                                          2002                2001                 2000
---------------------------------------------------------------------------------------------------
                                                         (in thousands)
---------------------------------------------------------------------------------------------------
<S>                                       <C>                 <C>                  <C>
Net cash provided by
---------------------------------------------------------------------------------------------------
operating activities                     $ 943               $1,311              $  558
---------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------
Net cash used in
---------------------------------------------------------------------------------------------------
investing activities                      (588)                (583)             (1,412)
---------------------------------------------------------------------------------------------------
Net cash used in
---------------------------------------------------------------------------------------------------
financing activities                      (880)                 (71)               (159)
---------------------------------------------------------------------------------------------------
Net increase (decrease)
---------------------------------------------------------------------------------------------------
in cash and equivalents                   (525)                 657              (1,013)
---------------------------------------------------------------------------------------------------
Cash and equivalents.
---------------------------------------------------------------------------------------------------
beginning of year                        1,396                  739               1,752
---------------------------------------------------------------------------------------------------
Cash and equivalents.
---------------------------------------------------------------------------------------------------
end of year                             $  871               $1,396              $  739
---------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>

Contractual Cash Obligations
--------------------------------------------------------------------------------------------
                                               Less Than         1-5              After
                             Total               1 Year         Years            5 Years
--------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------
<S>                       <C>                  <C>            <C>              <C>
Long-term debt            $1,608,000           $  259,000     $  330,000       $1,019,000

--------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------
Operating leases           4,385,000           842,000        1,940,000        1,603,000
--------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------
Subtotal                   5,993,000           1,101,000      2,270,000        2,622,000
--------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------
Operating lease
--------------------------------------------------------------------------------------------
  guarantees for
--------------------------------------------------------------------------------------------
  franchisees              7,265,000           885,000        2,941,000        3,439,000
--------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------
                          $13,258,000          $1,986,000     $5,211,000       $6,061,000
--------------------------------------------------------------------------------------------
</TABLE>


                                     - 24 -

Improvements
------------

         Capital expenditures were $558,000, $1,091,000 and $1,860,000 during
fiscal years 2002, 2001 and 2000, respectively. The capital expenditures for
each fiscal year included upgrading existing units serving food, improvements to
package liquor stores and the replacement of the corporate computer system. The
fiscal year 2000 capital expenditures included the purchase of an office
building for $850,000. The fiscal year 2001 capital expenditures included
renovations to the office building for $250,000.

         All of the Company's units require periodic refurbishing in order to
remain competitive . During fiscal 1992, as cash flow improved, the Company
embarked on a refurbishing program which continues. The budget for fiscal year
2003 includes approx-imately $280,000 for this purpose. The Company expects the
funds for these improvements to be provided from operations.

Property and Equipment
----------------------

         The Company purchased an office building for $850,000 during the first
quarter of 2000 and renovated the same during the second and third quarters of
fiscal year 2001 for $250,000. The corporate offices were relocated to the
building during the third quarter of fiscal year 2001.

Long term debt
--------------

         During the fourth quarter of fiscal year 1997, the Company borrowed
$375,000 from investors, in units of $5,000, which loan was fully secured with
specific receivables owned by the Company. The loan was paid in full during the
fourth quarter of fiscal year 2002.

         The Company closed on a $1,000,000 loan with Bank of America (formerly
Nations Bank) during the second quarter of fiscal year 2000. The promissory note
earned interest at prime rate, payable monthly on the outstanding principal
balance, with quarterly payments of principal commencing at the rate of $50,000
per quarter for 8 quarters, and then at the rate of $75,000 per quarter for 8
quarters, at which time any outstanding principal balance and all accrued
interest shall be due in full. The promissory note was secured by a security
interest in all assets of the Company, including the office building purchased
by the Company. The promissory note was prepaid in full during the fourth
quarter of fiscal year 2002.


                                     - 25 -
<PAGE>


         During the fourth quarter of fiscal year 2002, the Company closed on a
$456,000 loan with Bank Atlantic, which loan was used to prepay the Company's
loan with Bank of America discussed above. The promissory note earns interest at
the rate of prime (4.75% at 9/30/02) per annum and is fully amortized over 19
months, with equal monthly payments of principal and interest. The principal due
as of September 28, 2002 was $418,000.

         During the fourth quarter of fiscal year 2001, the Company borrowed the
sum of $895,000 from Bank of America (formerly Nations Bank). The promissory
note earns interest at the rate of 6.12% per annum, amortized over 20 years with
principal and interest payable monthly, with the entire unpaid principal balance
and all accrued interest due on August 1, 2008. The promissory note is secured
by a mortgage on the office building purchased by the Company for its corporate
offices, which office building was released from the lien granted by the Company
to the Bank of America (formerly Nations Bank), as collateral for the loan in
January of fiscal year 2000. In order to achieve the fixed interest rate, the
Company entered into an ISDA Master Agreement with Bank of America. ("SWAP
Agreement"), and in the event the Company elects to prepay the promissory note,
there may be a prepayment penalty associated therewith. The outstanding balance
as of the end of fiscal year 2002 was $876,000.

         The Company repaid long term debt, including the Bank of America note
payable, capital lease obligations and Chapter 11 bankruptcy damages in the
amount of $486,000, $726,000 and $421,000 in fiscal years 2002, 2001 and 2000
respectively.

Working capital
---------------

         The table below summarizes the current assets, current liabilities and
working capital for the fiscal years 2002, 2001 and 2000:


-------------------------------------------------------------------------------
                            Sept. 28            Sept. 29            Sept. 30
                              2002                2001                2000
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
Current assets             $4,392,000          $4,514,000          $3,419,000

-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
Current liabilities        1,886,000           2,074,000           2,136,000
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
Working capital            2,506,000           2,440,000           1,283,000
-------------------------------------------------------------------------------


     Management believes that positive cash flow from operations will adequately
fund operations, debt reductions and planned capital expenditures in fiscal year
2003.

                                     - 26 -
<PAGE>


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 bases of assets and liabilities and
to tax net operating loss and tip credit carryforwards to the extent that
realization of said benefits is more likely than not. For discussion regarding
the Company's carryforwards refer to Note 8 to the consolidated financial
statements for fiscal year ended September 28, 2002.

Bankruptcy Proceedings
----------------------

         As noted above and in Note 7 to the consolidated financial statements,
on November 4, 1985, Flanigan's Enterprises, Inc., not including any of its
subsidiaries, filed a Voluntary Petition in the United States Bankruptcy Court
for the Southern District of Florida seeking to reorganize under Chapter 11 of
the Federal Bankruptcy Code. The primary purposes of the petition were (1) to
reject leases which were significantly above market rates and (2) to reject
leases on closed units which had been repossessed by or returned to the Company.

         During fiscal year 1986 the Company terminated or rejected 34 leases.
Many of the leases remaining were renegotiated to five year terms, with three
five year renewal options at fair market rental. As was their right under the
Bankruptcy Code, the landlords of properties rejected by the Company filed
claims for losses or damages sustained as a result of the Company's rejection of
such leases. The amount of such damages is limited by federal law. The Company
outlined a schedule for payment of these damages in the Amended Plan. As noted
above, the Amended Plan was approved in the Bankruptcy Court on May 5, 1987. The
gross amount of damages payable to creditors for the rejected leases was
$4,278,000. Since the damage payments were to be made over nine years, the total
amount due was discounted at a rate of 9.25%. During the third quarter of fiscal
year 2002, the remaining damage payments under the Amended Plan were paid in
full. See Note 7 to the consolidated financial statements for the current
payment schedule of these damages.

Other Legal Matters
-------------------

         Through the end of fiscal year 1990, the Company was uninsured for dram
shop liability. See page 20 for further discussion regarding dram shop suits.

                                     - 27 -

<PAGE>


         The Company operated a restaurant in Miami, Florida under the
"Flanigan's Seafood Bar and Grill" servicemark pursuant to a limited partnership
agreement through the second quarter of fiscal year 2002. The Company acts as
the general partner and owns a fifty percent limited partnership interest. The
State of Florida, Department of Transportation, ("DOT") exercised its right of
eminent domain to "take" the hotel property upon which this restaurant was
located and the restaurant closed at the end of business on March 30, 2002. The
Company, as general partner of the limited partnership, pursued a claim for
"taking" of the restaurant, including its furniture, fixtures and equipment,
against the DOT and an apportionment claim against the owner of the hotel
property as compensation for its possessory rights to the restaurant premises
and its share of the compensation paid by the DOT for its furniture, fixtures
and equipment pursuant to a Stipulated Final Judgment between the DOT and the
owner of the hotel property, ("Stipulated Final Judgment"). The settlement
resulted in approximately $230,000 of income to the Company during fiscal year
ended September 28, 2002, which is included in "Other Income (Expense)" on Page
3 of this report. The limited partnership has reserved its right to seek
additional compensation from the DOT for (1) its claim for the value of the
furniture, fixtures and equipment located in the restaurant which were not paid
for in the Stipulated Final Judgment; (2) its claim for the value of its
furniture, fixtures and equipment above and beyond the value paid by the DOT in
the Stipulated Final Judgment; and (3) any other rights reserved to the limited
partnership in the Stipulated Final Judgment, which additional compensation will
belong solely to the Company. The amount of compensation, if any, cannot be
estimated as of this date.


Critical Accounting Policies
----------------------------

The Company"s significant accounting policies are more fully described in Note 1
to the Company"s consolidated financial statements located in Item 8 of this
Annual Report on Form 10-K. The preparation of financial statements in
conformity with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect the
reported amounts of assets, liabilities, revenues, and expenses, and the related
disclosures of contingent assets and liabilities. Actual results could differ
from those estimates under different assumptions or conditions. The Company
believes that the following critical accounting policy is subject to estimates
and judgments used in the preparation of its consolidated financial statements:

Deferred tax assets result primarily from timing differences relating to
depreciation and tip credits. The calculations are reviewed periodically by
management and the estimates are adjusted as the assumptions or conditions
indicate.

                                     - 28 -
<PAGE>


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

<TABLE>
<CAPTION>

REVENUES (in thousands):

---------------------------------------------------------------------------------------------------------------
                                   Fifty Two                    Fifty Two                     Fifty Two
                                  Weeks Ended                  Weeks Ended                   Weeks Ended
Sales                           Sept. 28, 2002                Sept. 29, 2001                Sept. 30, 2000
---------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------
<S>                         <C>              <C>           <C>             <C>           <C>             <C>
Restaurant, food            $13,119          51.2%         $12,453         51.1%         $11,485         49.5%
---------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------
Restaurant, bar               3,317          13.0%           3,025         12.4%           2,859         12.3%
---------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------
Package goods                 9,174          35.8%           8,907         36.5%           8,870         38.2%
---------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------
Total                        25,610         100.0%          24,385        100.0%          23,214        100.0%
---------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------
Franchise revenues            1,402                          1,249                         1,065
---------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------
Owners fee                      251                            269                           261
---------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------
Joint venture
---------------------------------------------------------------------------------------------------------------
  income                        732                            571                           460
------------------------------------ -------------- --------------- ------------- --------------- -------------

---------------------------------------------------------------------------------------------------------------
Other operating
---------------------------------------------------------------------------------------------------------------
  income                        302                            230                           160
---------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------
Total Revenues              $28,297                        $26,704                       $25,160
---------------------------------------------------------------------------------------------------------------

</TABLE>


         As the table above illustrates, total revenues have increased for the
fiscal year ended September 28, 2002 when compared to the fiscal years ended
September 29, 2001 and September 30, 2000.

         During the second quarter of fiscal year 1999, the Company formed a
limited partnership to renovate and operate a restaurant under the "Flanigan's
Seafood Bar and Grill" servicemark in Kendall, Florida, as general partner and
forty percent owner of the same. Due to the difficulties in obtaining the
required permits to begin construction which were beyond control of the Company,
construction began in the first quarter of fiscal year 2000 and the restaurant
opened for business during the third quarter of fiscal year 2000. The Company
reported income of $239,000 for the fiscal year 2002 as compared with $183,000
for the fiscal year ended September 29, 2001 and $17,000 for the fiscal year
ended September 30, 2000.

         During the first quarter of the fiscal year ended September 30, 2000,
the Company purchased, for $850,000 in cash, a two story building in Fort
Lauderdale, Florida, which is presently being used for the corporate offices The
Company also plans to renovate a portion of the ground floor of the office
building to be used as a package liquor store.

                                     - 29 -
<PAGE>


         During the third quarter of fiscal year 2000, the Company formed a
limited partnership to purchase an existing restaurant location in West Miami,
Florida to renovate and operate under the "Flanigan's Seafood Bar and Grill"
servicemark, as general partner and twenty five percent owner of the same. The
renovations began during the fourth quarter of fiscal year 2001 and the
restaurant opened for business during the first quarter of 2002. The Company
reported income of $74,000 for fiscal year 2002.

         During the fourth quarter of fiscal year 2001, a limited partnership
was formed with the Company as general partner, which limited partnership
entered into a sublease agreement to own and operate an existing in Weston,
Florida. During the fourth quarter of fiscal year 2002, the sublessor resolved
the zoning and related matters and the limited partnership began raising funds
to renovate the business premises for operation as a "Flanigan's Seafood Bar and
Grill" restaurant. With the sale of limited partnership units during the fourth
quarter of fiscal year 2002, the Company no longer consolidates the limited
partnership for financial reporting purposes. The Company continues to act as
the general partner of the limited partnership and is also the owner of twenty
eight percent of the same, as are other related parties, including, but not
limited to officers and directors of the Company and their families. The limited
partnership agreement gives the partnership the right to use the "Flanigan's
Seafood Bar and Grill" servicemark for a fee equal to 3% of the gross sales from
the operation of the restaurant, while the Company acts as general partner only.
The restaurant, which had operated under its existing servicemark, was closed on
July 13, 2002 and building permits were issued at the start of fiscal year 2003.
The Company anticipates that the restaurant will be open for business by
December 31, 2002. The Company realized a loss from operations of the restaurant
through July 13, 2002 of approximately $56,000 and realized a loss from the
joint venture of approximately $14,000 for the remainder of the year.

         Restaurant food sales represented 51.2% of total sales for the fiscal
year ended September 28, 2002 as compared to 51.1% and 49.5% of total sales in
the fiscal years ended September 29, 2001 and September 30, 2000 respectively.
The weekly average of same store restaurant food sales (excluding Weston) was
$237,000 for the fiscal year ended September 28, 2002 as compared to $235,000
and $207,000 for the fiscal years ended September 29, 2001 and September 30,
2000, respectively, an increase of 4.4% and 0.1% from the fiscal years ended
September 29, 2001 and September 30, 2000, respectively.

                                     - 30 -
<PAGE>


         Restaurant bar sales represented 13.0% of total sales for the fiscal
year ended September 28, 2002 as compared to 12.4% and 12.3% of total sales in
the fiscal years ended September 29, 2001 and September 30, 2000, respectively.
The weekly average of same store restaurant bar sales was $55,000 for the fiscal
year ended September 28, 2002 as compared to $56,000 and $55,000 for the fiscal
years ended September 29, 2001 and September 30, 2000 respectively, representing
no change from fiscal year 2000 and an increase of .4% from fiscal year 2001.

         Package store sales represented 35.8% of total sales for the fiscal
year ended September 28, 2002 as compared to 36.5% and 38.2% of total sales in
the fiscal years ended September 30, 2001 and September 30, 2000, respectively.
The weekly average of same store package sales was $170,000 for the fiscal year
ended September 28, 2002 as compared to $168,000 and $154,000 for the fiscal
years ended September 29, 2001 and September 30, 2000 respectively, an increase
of 10.4% from fiscal year 2000 and an increase of less than .2% from fiscal year
2001.

         Franchise revenue increased to $1,402,000 for the fiscal year ended
September 28, 2002 as compared to $1,249,000 and $1,065,000 for the fiscal years
ended September 29, 2001 and September 30, 2000 respectively. The increase in
franchise revenue resulted from higher sales for the franchises, and the
operation of additional joint ventures during fiscal years 2002 and 2001.

         Owner's fee represents fees received pursuant to a Management Agreement
from the operation of a club owned by the Company in Atlanta, Georgia. The
Management Agreement was amended effective July 1, 1996, whereby the Company
also receives ten percent of sales exceeding $1,500,000 per annum as additional
owner's fees. Income from this club was $251,000 for the fiscal year ended
September 28, 2002 as compared to $269,000 and $261,000 for the fiscal years
ended September 29, 2001 and September 30, 2000, respectively.

         The gross profit margin for restaurant sales was 65.3% for the fiscal
year ended September 28, 2002 as compared to 62.8% and 63.9% for the fiscal
years ended September 29, 2001 and September 30 2000, respectively. This was
largely due to reduced costs of ribs, the Company"s most popular menu item.

         The gross profit margin for package goods sales was 25.9% for the
fiscal year ended September 28, 2002 as compared to 27.2% and 26.4% for the
fiscal years ended September 29, 2001 and September 30, 2000, respectively. The
decrease in gross profit margin in 2002 is due in part to a charge of
approximately $160,000 relating to the change in inventory valuation method to
average cost.

                                     - 31 -
<PAGE>


         Overall gross profits were 50.4% for the fiscal year ended September
29, 2002 as compared to 49.8% and 49.5% for the fiscal years ended September 29,
2001 and September 30, 2000, respectively.

Operating Costs and Expenses
----------------------------

         Operating costs and expenses for the fiscal year ended September 28,
2002 were $26,207,000 as compared to $24,700,000 and $23,380,000 for the fiscal
years ended September 29, 2001 and September 30, 2000, respectively. Operating
expenses are comprised of the cost of merchandise sold, payroll and related
costs, occupancy costs and selling, general and administrative expenses.

         Payroll and related costs which include workers compensation insurance
premiums were $7,946,000 for the fiscal year ended September 28, 2002 as
compared to $7,446,000 and $6,724,000 for the fiscal years September 29 2001 and
September 30, 2000, respectively. The 6.7% increase from the fiscal year 2001
and the 14.5% increase from the fiscal year 2000 is attributed to increases in
salaries paid to all employees in order to recruit and maintain competent
individuals in a very competitive labor market.

         Occupancy costs, which include rent, common area maintenance, repairs
and taxes were $1,279,000 for the fiscal year ended September 28, 2002 as
compared to 1,084,000 and $1,050,000 for the fiscal years ended September 29,
2001 and September 30, 2000, respectively.

         Selling, general and administrative expenses were $4,560,000 for the
fiscal year ended September 28, 2002 as compared to $3,926,000 and $3,889,000
for the fiscal years ended September 29, 2001 and September 30, 2000,
respectively.

Other Income and Expenses
-------------------------

         Other income and expenses were a loss of $19,000. for the fiscal year
ended September 28, 2002 as compared to income of $14,000 and a loss of $75,000
for the fiscal years ended September 29, 2001 and September 30, 2000,
respectively.

         Interest expense was $143,000 for the fiscal year ended September 28,
2002 as compared to $187,000 and $177,000 for the fiscal years ended September
29, 2001 and September 30, 2000, respectively.

         The category "Other, net" was $65,000 for the fiscal year ended
September 28, 2002 as compared with $133,000 and $48,000 for the fiscal years
ended September 29, 2001 and ended September 30, 2000, respectively.

                                     - 32 -
<PAGE>


Trends
------

         During the next twelve months management expects continued increases in
restaurant and package goods sales, both for Company stores and franchised
stores. The Company anticipates expenses to increase slightly, therefore
resulting in a small increase in overall profits before income taxes.

         The Company utilized the balance of its net operating loss carryforward
during fiscal year 1999 and was fully taxable for fiscal years 2002, 2001 and
2000. The provision for income taxes was $688,000 for the fiscal year ended
September 28, 2002 $489,000 for fiscal year ended September 29, 2001 and
$341,000 for the fiscal year ended September 30, 2000.

         The Company intends to add additional restaurants and package stores as
opportunities and resources become available.

Other Matters
-------------

   Impact of Inflation
   --------------------

         The Company does not believe that inflation has had any material effect
during the past three fiscal years. To the extent allowed by competition, the
Company recovers increased costs by increasing prices.

   Post Retirement Benefits Other Than Pensions
   --------------------------------------------

         The Company currently provides no post retirement benefits to any of
its employees, therefore Financial Accounting Standards Board Statement No. 106
has no effect on the Company's financial statements.

         Subsequent Events
         -----------------

         None

Item 7A. Quantative and Qualitative Disclosures About Market Risk
------------------------------------------------------------------

The Company does not ordinarily hold market risk sensitive instruments for
trading purposes. The Company does however recognize market risk from interest
rate exposure.

                                     - 33 -
<PAGE>


Interest Rate Risk
------------------

At September 28, 2002, the Company's cash resources earn interest at variable
rates. Accordingly, the Company's return on these funds is affected by
fluctuations in interest rates. Any decrease in interest rates will have a
negative effect on the Company's earnings. In addition, the Company incurs
interest charges on debt at variable rates, which to the extent that the Company
has not entered into interest rate swap agreements to hedge this risk, could
negatively impact the Company's earnings. There is no assurance that interest
rates will increase or decrease over the next fiscal year.

Item 8. Financial Statements and Supplementary Data.
----------------------------------------------------

         Financial statements of the Company at September 28, 2002, September
29, 2001 and September 30, 2000, which include each of the three years in the
period ended September 28, 2002 and the independent certified public
accountants' report thereon, are included herein.


                                    PART III

Item 10. Directors and Executive Officers of the Registrant.
------------------------------------------------------------

         The information set forth under the caption "Election of Directors" in
the Company's definitive Proxy Statement for its 2003 Annual Meeting of
Shareholders, to be filed with the Securities and Exchange Commission pursuant
to regulation 14A under the Securities and Exchange Act of 1934, as amended (the
2003 Proxy Statement), is incorporated herein by reference. See also "Executive
Officers of the Registrant" included in Part I hereof.

Item 11. Executive Compensation.
--------------------------------

         The information set forth in the 2003 Proxy Statement under the caption
"Executive Compensation" is incorporated by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management.
------------------------------------------------------------------------

         The information set forth under the caption "Security Ownership of
Certain Beneficial Owners and Management" in the 2003 Proxy Statement is
incorporated by reference.

                                     - 34 -
<PAGE>


Item 13. Certain Relationships and Related Transactions.
--------------------------------------------------------

         The information set forth under the caption "Election of Directors -
Certain Relationships and Related Transactions" in the 2003 Proxy Statement is
incorporated by reference.


                                     PART IV

Item 14. Exhibits, Financial Statement Schedule, and Reports on Form 8-K.
-------------------------------------------------------------------------

(a) 1. Financial Statements
       --------------------

         All the financial statements, financial statement schedule and
supplementary data listed in the accompanying Index to Exhibits are filed as
part of this Annual Report.

    2. Exhibits
       --------

         The exhibits listed on the accompanying Index to Exhibits are filed as
part of this Annual Report.

(b) Reports on Form 8-K
    -------------------

         No reports on form 8-K were filed during the fourth quarter of fiscal
year 2002 or subsequent to year end.


                                Index to Exhibits
                                Item (14) (a) (2)

                                   Description
                                   -----------


(2) Plan of Reorganization, Amended Disclosure Statement, Amended Plan of
Reorganization, Modification of Amended Plan of Reorganization, Second
Modification of Amended Plan of Reorganization, Order Confirming Plan of
Reorganization, (Item 7 (c) of Quarterly Report on Form 8-K filed May 5, 1987 is
incorporated herein by reference).

(3) Restated Articles of Incorporation (Part IV, Item 4 (a) (2) of Annual Report
on Form 10-K filed on December 29, 1982 is incorporated herein by reference).

(10)(a)(1) Employment Agreement with Joseph G. Flanigan (Exhibit A of the Proxy
Statement dated January 27, 1988 is incorporated herein by reference).

(10)(a)(2) Form of Employment Agreement between Joseph G. Flanigan and the
Company (as ratified and amended by the stockholders at the 1988 annual meeting
is incorporated herein by reference).

                                     - 35 -

<PAGE>


(10)(c) Consent Agreement regarding the Company's Trademark Litigation (Part
7(c)(19) of the Form 8-K dated April 10, 1985 is incorporated herein by
reference).

(10)(d) King of Prussia (#850) Partnership Agreement (Part 7 (c) (19) of the
Form 8-K dated April 10, 1985 is incorporated herein by reference).

(10)(o) Management Agreement for Atlanta, Georgia, (#600) (Item 14(a)(10)(o) of
the Form 10-K dated October 3, 1992 is incorporated herein by reference).

(10)(p) Settlement Agreement with Former Vice Chairman of the Board of Directors
(re #5) (Item 14 (a)(10)(p) of the Form 10-K dated October 3, 1992 is
incorporated herein by reference).

(10)(q) Hardware Purchase Agreement and Software License Agreement for
restaurant point of sale system. (Item 14(a)(10)(g) of Form 10-KSB dated October
2, 1993 is incorporated herein by reference).

(10)(a)(3) Key Employee Incentive Stock Option Plan (Exhibit A of the Proxy
Statement dated January 26, 1994 is incorporated herein by reference).

(10)(r) Limited Partnership Agreement of CIC Investors #13, Ltd,. between
Flanigan's Enterprises, Inc., as General Partner and fifty percent owner of the
limited partnership, and Hotel Properties, LTD. (Item 14 (a)(10)(r) of the Form
10-KSB dated September 30, 1995 is incorporated herein by reference).

(10)(s) Form of Franchise Agreement between Flanigan's Enterprises, Inc. and
Franchisees. (Item 14 (a)(10)(s) of the Form 10-KSB dated September 30, 1995 is
incorporated herein by reference).

(10)(t) Licensing Agreement between Flanigan's Enterprises, Inc. and James B.
Flanigan, dated November 4, 1996, for non-exclusive use of the servicemark
"Flanigan's" in the Commonwealth of Pennsylvania. (Item 14 (a)(10)(t) of the
Form 10-KSB dated September 28, 1996 is incorporated herein by reference).

(10)(u) Limited Partnership Agreement of CIC Investors #15 Ltd., dated March 28,
1997, between B.D. 15 Corp. as General Partner and numerous limited partners,
including Flanigan's Enterprises, Inc. as a limited partner owning twenty five
percent of the limited partnership (Item 14 (a)(10)(u) of the Form 10-KSB dated
September 27, 1997 is incorporated herein by reference).


                                     - 36 -
<PAGE>


(10)(v) Limited Partnership Agreement of CIC Investors #60 Ltd., dated July 8,
1997, between Flanigan's Enterprises, Inc., as General Partner and numerous
limited partners, including Flanigan's Enterprises, Inc. as limited partner
owning forty percent of the limited partnership (Item 14 (a)(10)(v) of Form
10-KSB dated September 27, 1997 is incorporated herein by reference).

(10)(w) Stipulated Agreed Order of Dismissal upon Mediation with former
franchisee (Item 14 (a)(10)(w) of Form 10-KSB dated September 27, 1997 is
incorporated herein by reference).

(10)(x) Limited Partnership Agreement of CIC Investors #70, Ltd. dated February
1999 between Flanigan's Enterprises, Inc. as General Partner and numerous
limited partners, including Flanigan's Enterprises, Inc. as limited partner
owning forty percent of the limited partnership. (Item 14 (a) (10) (x) of Form
10-KSB dated October 2, 1999 is incorporated herein by reference)

(10)(y) Limited Partnership Agreement of CIC Investors #80, Ltd., dated May
2001, between Flanigan's Enterprises, Inc. as General Partner and numerous
limited partners, including Flanigan's Enterprises, Inc., as limited partner
owning twenty five percent of the limited partnership.

(10)(z) Limited Partnership Agreement of CIC Investors #95, Ltd., dated July
2001, between Flanigan's Enterprises, Inc., as General Partner and numerous
limited partners, including Flanigan's Enterprises, Inc. as limited partner
owning twenty eight percent of the limited partnership.

(13) Registrant's Form 10-K constitutes the Annual Report to Shareholders for
the fiscal year ended September 28, 2002.

(22)(a) Company's subsidiaries are set forth in this Annual Report on Form 10-K.

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

99.2   OFFICER CERTIFICATIONS

99.3   INDEPENDENT ACCOUNTANT PREFERABILITY LETTER


                                     - 37 -
<PAGE>


                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934 the registrant had duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.


                            Flanigan's Enterprises, Inc.
                            Registrant

                            By: /s/ JOSEPH G. FLANIGAN
                                ------------------------
                                JOSEPH G. FLANIGAN
                                Chief Executive Officer

Date: 12/27/02


     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in their capacities and on the dates indicated.


/s/ JOSEPH G. FLANIGAN        Chairman of the Board,        Date:  12/27/02
----------------------        Chief Executor Officer,
Joseph G. Flanigan            and Director


/s/ EDWARD A. DOXEY           Chief Financial Officer       Date:  12/27/02
----------------------        Secretary and Director
Edward A. Doxey


/s/ MICHAEL ROBERTS           Director                      Date:  12/27/02
----------------------
MICHAEL ROBERTS


/s/ GERMAINE M. BELL          Director                      Date:  12/27/02
----------------------
Germaine M. Bell


/s/ CHARLES E. MCMANUS        Director                      Date:  12/27/02
----------------------
Charles E. McManus


/s/ JEFFREY D. KASTNER        Assistant Secretary           Date:  12/27/02
----------------------         and Director
Jeffrey D. Kastner


WILLIAM PATTON                Vice President, Public        Date:  12/27/02
----------------------        Relations and Director
William Patton

/s/ JAMES G. FLANIGAN         President Director            Date:  12/27/02
----------------------
James G. Flanigan


/s/ PATRICK J. FLANIGAN       Director                      Date:  12/27/02
-----------------------
Patrick J. Flanigan

                                     - 38 -


<PAGE>

                                  CERTIFICATION

I, Joseph A. Flanigan, certify that:

1.   I have reviewed this annual report on Form 10-K of Flanigan"s Enterprises,
     Inc.;

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

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

4.   The registrant"s other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

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

     b)   evaluated the effectiveness of the registrant"s disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and

     c)   presented in this annual report our conclusions about the
          effectiveness of the disclosure controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registant"s other certifying officers and I have disclosed, based on
     our most recent evaluation, to the registrant"s auditors and the audit
     committee of registrant"s board of directors (or persons performing the
     equivalent function);

     a)   all significant deficiencies in the design or operation of internal
          controls which could adversely affect the registrant"s ability to
          record, process, summarize and report financial data and have
          identified for the registrant"s auditors any material weaknesses in
          internal controls; and


                                     - 39 -

     b)   any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant"s internal
          controls; and

6.   The registrant"s other certifying officers and I have indicated in this
     annual report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

                                             /s/ Joseph G. Flanigan
                                             ----------------------
                                             Name: Joseph G. Flanigan
                                             Chief Executive Officer
                                             Date: December 27, 2002



                                     - 40 -
<PAGE>



I, Edward A. Doxey, Chief Financial Officer of Flanigan"s Enterprises, Inc.,
certify that:

1.   I have reviewed this annual report on Form 10-K of Flanigan"s Enterprises,
     Inc.;

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

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

4.   The registrant"s other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

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

     b)   evaluated the effectiveness of the registrant"s disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and

     c)   presented in this annual report our conclusions about the
          effectiveness of the disclosure controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registant"s other certifying officers and I have disclosed, based on
     our most recent evaluation, to the registrant"s auditors and the audit
     committee of registrant"s board of directors (or persons performing the
     equivalent function);

     a)   all significant deficiencies in the design or operation of internal
          controls which could adversely affect the registrant"s ability to
          record, process, summarize and report financial data and have
          identified for the registrant"s auditors any material weaknesses in
          internal controls; and

     b)   any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant"s internal
          controls; and

                                     - 41 -
<PAGE>



6.   The registrant"s other certifying officers and I have indicated in this
     annual report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.


                                               /s/ Edward A. Doxey
                                                ----------------------
                                                Name: Edward A. Doxey
                                                Chief Financial Officer
                                                Date: December 27, 2002


                                     - 42 -







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

                        CONSOLIDATED FINANCIAL STATEMENTS

                    SEPTEMBER 28, 2002 AND SEPTEMBER 29, 2001
================================================================================

================================================================================



<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                          INDEX TO FINANCIAL STATEMENTS
                          -----------------------------




                                                                 PAGE
                                                                 ----



REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS                F-1


CONSOLIDATED FINANCIAL STATEMENTS

   Balance Sheets                                                 F-2

   Statements of Income                                           F-3

   Statements of Stockholders' Equity                             F-4

   Statements of Cash Flows                                      F5-F-6

   Notes to Financial Statements                                F-7-F-27


<PAGE>




               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
               ---------------------------------------------------


Board of Directors and Stockholders
Flanigan's Enterprises, Inc.
Fort Lauderdale, Florida


We have  audited the  accompanying  consolidated  balance  sheets of  Flanigan's
Enterprises,  Inc. and  Subsidiaries  as of September 28, 2002 and September 29,
2001, and the related  consolidated  statements of income,  stockholders' equity
and cash flows for each of the three  years in the period  ended  September  28,
2002. These  consolidated  financial  statements are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  consolidated  financial  position  of  Flanigan's
Enterprises,  Inc. and  Subsidiaries  as of September 28, 2002 and September 29,
2001, and the consolidated  results of their operations and their cash flows for
each of the three years in the period  ended  September  28, 2002 in  conformity
with accounting principles generally accepted in the United States.


                                                   /s/ RACHLIN COHEN & HOLTZ LLP
                                                   -----------------------------
                                                   RACHLIN COHEN & HOLTZ LLP

Fort Lauderdale, Florida
November 27, 2002

                                       F-1

<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                    SEPTEMBER 28, 2002 AND SEPTEMBER 29, 2001

<TABLE>
<CAPTION>

<S>                                                                             <C>                    <C>

                                                    ASSETS                          2002               2001
                                                    ------                          ----               ----
Current Assets:
     Cash and cash equivalents                                                  $    871,000       $  1,396,000
     Notes and mortgages receivable, current maturities, net                          85,000            120,000
     Due from franchisees                                                            355,000            683,000
     Other receivables                                                               311,000            311,000
     Inventories                                                                   1,387,000          1,337,000
     Refundable deposit, major supplier                                              708,000                 --
     Prepaid expenses                                                                436,000            349,000
     Deferred tax assets                                                             239,000            318,000
                                                                                ------------       ------------
        Total current assets                                                       4,392,000          4,514,000
                                                                                ------------       ------------
Property and Equipment                                                             5,498,000          5,650,000
                                                                                ------------       ------------
Investments in Joint Ventures                                                      2,414,000          1,684,000
                                                                                ------------       ------------

Other Assets:
     Liquor licenses, net                                                            333,000            266,000
     Notes and mortgages receivable, net                                              92,000             71,000
     Deferred tax assets                                                             248,000            338,000
     Other                                                                           215,000            234,000
                                                                                ------------       ------------
           Total other assets                                                        888,000            909,000
                                                                                ------------       ------------
           Total assets                                                         $ 13,192,000       $ 12,757,000
                                                                                ============       ============


                                     LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
     Accounts payable and accrued expenses                                         1,431,000       $  1,564,000
     Due to franchisees                                                              196,000            131,000
     Current portion of long-term debt                                               259,000            262,000
     Damages payable on terminated or rejected leases                                     --            117,000
                                                                                ------------       ------------
           Total current liabilities                                               1,886,000          2,074,000
                                                                                ------------       ------------
Long-Term Debt, Net of Current Maturities                                          1,349,000          1,715,000
                                                                                ------------       ------------

Commitments, Contingencies and Other Matters                                              --

Stockholders' Equity:
     Common stock, $.10 par value; 5,000,000 shares authorized;
        4,197,642 shares issued                                                      420,000            420,000
     Capital in excess of par value                                                6,103,000          6,028,000
     Retained earnings                                                             8,747,000          7,863,000
     Notes receivable on sale of common stock                                             --           (291,000)
     Treasury stock, at cost, 2,271,172 and 2,275,164 shares, respectively        (5,313,000)        (5,052,000)
                                                                                ------------       ------------
           Total stockholders' equity                                              9,957,000          8,968,000
                                                                                ------------       ------------
           Total liabilities and stockholders' equity                           $ 13,192,000       $ 12,757,000
                                                                                ============       ============
</TABLE>



                 See notes to consolidated financial statements

                                      F-2

<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                        CONSOLIDATED STATEMENTS OF INCOME

    YEARS ENDED SEPTEMBER 28, 2002, SEPTEMBER 29, 2001 AND SEPTEMBER 30, 2000

<TABLE>
<CAPTION>
                                                                      2002              2001                2000
                                                                      ----              ----                ----
<S>                                                              <C>                <C>                <C>
Revenues:
     Restaurant food sales                                       $ 13,119,000       $ 12,453,000       $ 11,485,000
     Restaurant beverage sales                                      3,317,000          3,025,000          2,859,000
     Package goods sales                                            9,174,000          8,907,000          8,870,000
     Franchise-related revenues                                     1,402,000          1,249,000          1,065,000
     Owner's fee                                                      251,000            269,000            261,000
     Joint venture income                                             732,000            571,000            460,000
     Other operating income                                           302,000            230,000            160,000
                                                                 ------------       ------------       ------------
                                                                   28,297,000         26,704,000         25,160,000
                                                                 ------------       ------------       ------------
Costs and Expenses:
     Cost of merchandise sold:
        Restaurants and lounges                                     5,624,000          5,757,000          5,185,000
        Package goods                                               6,798,000          6,487,000          6,532,000
     Payroll and related costs                                      7,946,000          7,446,000          6,724,000
     Occupancy costs                                                1,279,000          1,084,000          1,050,000
     Selling, general and administrative expenses                   4,560,000          3,926,000          3,889,000
                                                                 ------------       ------------       ------------
                                                                   26,207,000         24,700,000         23,380,000
                                                                 ------------       ------------       ------------

Income from Operations                                              2,090,000          2,004,000          1,780,000
                                                                 ------------       ------------       ------------

Other Income (Expense):
     Interest expense on obligations under capital leases                  --            (46,000)           (46,000)
     Interest expense on long-term debt and damages payable          (143,000)          (141,000)          (131,000)
     Interest income                                                   59,000             68,000             54,000
     Other                                                             65,000            133,000             48,000
                                                                 ------------       ------------       ------------
                                                                      (19,000)            14,000            (75,000)
                                                                 ------------       ------------       ------------

Income Before Provision for Income Taxes                            2,071,000          2,018,000          1,705,000
                                                                 ------------       ------------       ------------

Provision (Benefit) for Income Taxes:
     Current                                                          519,000            483,000            373,000
     Deferred                                                         169,000              6,000            (32,000)
                                                                 ------------       ------------       ------------
                                                                      688,000            489,000            341,000
                                                                 ------------       ------------       ------------

Net Income                                                       $  1,383,000       $  1,529,000       $  1,364,000
                                                                 ============       ============       ============

Net Income Per Common Share:
     Basic                                                       $       0.71       $       0.80       $       0.73
                                                                 ============       ============       ============
     Diluted                                                     $       0.70       $       0.80       $       0.71
                                                                 ============       ============       ============

Weighted Average Shares and Equivalent Shares Outstanding:
     Basic                                                          1,961,000          1,903,000          1,856,000
                                                                 ============       ============       ============
     Diluted                                                        1,989,000          1,922,000          1,931,000
                                                                 ============       ============       ============
</TABLE>

                See notes to consolidated financial statements.

                                       F-3

<PAGE>


                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

    YEARS ENDED SEPTEMBER 28, 2002, SEPTEMBER 29, 2001 AND SEPTEMBER 30, 2000

<TABLE>
<CAPTION>
                                                                                                                         Notes
                                                                                                                       Receivable
                                                                    Common Stock           Capital in                  on Sale of
                                                                                           Excess of       Retained      Common
                                                               Shares          Amount      Par Value       Earnings      Stock
                                                               ------          ------      ---------       --------      -----
<S>                                                          <C>           <C>           <C>             <C>           <C>
Balance, October 2, 1999                                     4,197,642     $   420,000   $ 6,058,000     $ 5,416,000   $  (192,000)

Year Ended September 30, 2000:
    Dividends paid ($0.11 per share)                                --              --            --        (215,000)           --
    Net income                                                      --              --            --       1,364,000            --
    Purchase of treasury stock                                      --              --            --              --            --
    Exchange of shares - exercise of stock options                  --              --        (6,000)             --            --
    Payments received on notes receivable                           --              --            --              --        11,000
                                                             ---------     -----------   -----------     -----------   -----------

Balance, September 30, 2000                                  4,197,642         420,000     6,052,000       6,565,000      (181,000)

Year Ended September 29, 2001:
    Dividends paid ($0.12 per share)                                --              --            --        (231,000)           --
    Net income                                                      --              --            --       1,529,000            --
    Purchase of treasury stock                                      --              --            --              --            --
    Notes receivable issued upon exercise of stock options     (24,000)       (122,000)      (70,000)        155,000         9,000
    Payments received on notes receivable                           --              --            --              --        12,000
                                                             ---------     -----------   -----------     -----------   -----------

Balance, September 29, 2001                                  4,197,642         420,000     6,028,000       7,863,000      (291,000)

Year Ended September 28, 2002:
    Dividends paid ($0.25 per share)                          (499,000)       (499,000)
    Net income                                               1,383,000       1,383,000
    Purchase of treasury stock                                  68,803        (423,000)     (423,000)
    Exchange of shares - exercise of stock options              75,000         (72,795)      162,000         237,000
    Payments received on notes receivable                           --              --            --              --       291,000
                                                             ---------     -----------   -----------     -----------   -----------
Balance, September 28, 2002                                  4,197,642     $   420,000   $ 6,103,000     $ 8,747,000   $        --
                                                             =========     ===========   ===========     ===========   ===========
</TABLE>


<TABLE>
<CAPTION>
                                                                     Treasury Stock
                                                                     --------------
                                                                 Shares          Amount           Total
                                                                 ------          ------           -----
<S>                                                             <C>           <C>             <C>
Balance, October 2, 1999                                        2,247,193     $(4,722,000)    $ 6,980,000

Year Ended September 30, 2000:
    Dividends paid ($0.11 per share)                                   --              --        (215,000)
    Net income                                                         --              --       1,364,000
    Purchase of treasury stock                                    105,971        (492,000)       (492,000)
    Exchange of shares - exercise of stock options                (12,000)         25,000          19,000
    Payments received on notes receivable                              --              --          11,000
                                                                ---------      ----------       ---------
Balance, September 30, 2000                                     2,341,164      (5,189,000)      7,667,000

Year Ended September 29, 2001:
    Dividends paid ($0.12 per share)                                   --              --        (231,000)
    Net income                                                         --              --       1,529,000
    Purchase of treasury stock                                      4,000         (18,000)        (18,000)
    Notes receivable issued upon exercise of stock options
    Payments received on notes receivable                              --              --          12,000
                                                                ---------      ----------       ---------
Balance, September 29, 2001                                     2,275,164      (5,052,000)      8,968,000

Year Ended September 28, 2002:
    Dividends paid ($0.25 per share)
    Net income
    Purchase of treasury stock
    Exchange of shares - exercise of stock options
    Payments received on notes receivable                              --              --         291,000
                                                                ---------      ----------      ----------
Balance, September 28, 2002                                     2,271,172     $(5,313,000)    $ 9,957,000
                                                                =========     ===========     ===========
</TABLE>


                 See notes to consolidated financial statements

                                       F-4

<PAGE>


                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

    YEARS ENDED SEPTEMBER 28, 2002, SEPTEMBER 29, 2001 AND SEPTEMBER 30, 2000


<TABLE>
<CAPTION>
                                                                                     2002            2001            2000
                                                                                     ----            ----            ----
<S>                                                                              <C>             <C>             <C>
Cash Flows from Operating Activities:
    Net income                                                                   $ 1,383,000     $ 1,529,000     $ 1,364,000
    Adjustments to reconcile net income to net cash provided by
       operating activities:
          Depreciation and amortization                                              717,000         758,000         681,000
          Deferred income taxes                                                      169,000           6,000         (32,000)
          Recognition of deferred gains and other deferred income                     (5,000)         (4,000)         (4,000)
          (Gain) loss on disposal of property, equipment and liquor licenses          19,000         (21,000)         (8,000)
          Joint venture income                                                      (732,000)       (571,000)       (460,000)
          Changes in operating assets and liabilities:
            (Increase) decrease in:
               Due from franchisees                                                  328,000        (433,000)       (139,000)
               Other receivables                                                     (21,000)        (47,000)       (144,000)
               Inventories                                                           (50,000)         45,000          46,000
               Prepaid expenses                                                      (87,000)        (31,000)         84,000
               Refundable deposit, major supplier                                   (708,000)             --              --
               Other assets                                                           (2,000)        (37,000)         (4,000)
            Increase (decrease) in:
               Accounts payable and accrued expenses                                (133,000)         50,000         (80,000)
               Due to franchisees                                                     65,000          67,000        (746,000)
                                                                                 -----------     -----------     -----------
                  Net cash provided by operating activities                          943,000       1,311,000         558,000
                                                                                 -----------     -----------     -----------

Cash Flows from Investing Activities:
    Collections on notes and mortgages receivable                                     12,000          79,000          36,000
    Notes receivable                                                                 (39,000)             --              --
    Purchase of property and equipment                                              (558,000)     (1,091,000)     (1,860,000)
    Purchase of liquor licenses                                                      (50,000)             --              --
    Sale of liquor license                                                            45,000              --              --
    Distributions from joint ventures                                                467,000         640,000         401,000
    Investment in limited partnerships                                              (465,000)       (223,000)             --
                                                                                 -----------     -----------     -----------
                  Net cash used in investing activities                             (588,000)       (583,000)     (1,423,000)
                                                                                 -----------     -----------     -----------

Cash Flows from Financing Activities:
    Borrowings of long-term debt                                                          --         895,000         950,000
    Payments of long-term debt                                                      (369,000)       (373,000)        (79,000)
    Payments of obligations under capital leases                                          --         (70,000)        (70,000)
    Payments of damages payable on terminated or rejected leases                    (117,000)       (283,000)       (272,000)
    Collections on notes receivable, sale of common stock                            291,000          12,000          11,000
    Purchase of treasury stock                                                      (423,000)        (18,000)       (492,000)
    Dividends paid                                                                  (499,000)       (231,000)       (215,000)
    Proceeds from exercise of stock options                                          237,000           9,000          19,000
                                                                                 -----------     -----------     -----------
                  Net cash used in financing activities                             (880,000)        (71,000)       (148,000)
                                                                                 -----------     -----------     -----------
Net Increase (Decrease) in Cash and Cash Equivalents                                (525,000)        657,000      (1,013,000)

Cash and Cash Equivalents, Beginning                                               1,396,000         739,000       1,752,000
                                                                                 -----------     -----------     -----------
Cash and Cash Equivalents, Ending                                                $   871,000     $ 1,396,000     $   739,000
                                                                                 ===========     ===========     ===========
</TABLE>


                                                                     (Continued)

                 See notes to consolidated financial statements
                                       F-5

<PAGE>



                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

    YEARS ENDED SEPTEMBER 28, 2002, SEPTEMBER 29, 2001 AND SEPTEMBER 30, 2000



<TABLE>
<CAPTION>
                                                                          2002            2001            2000
                                                                          ----            ----            ----
<S>                                                                    <C>             <C>             <C>
Cash paid during the year for:
    Interest                                                           $ 143,000       $ 181,000       $ 177,000
                                                                       =========       =========       =========
    Income taxes                                                       $ 493,000       $ 433,000       $ 490,000
                                                                       =========       =========       =========

Non-Cash Financing and Investing Activities:
    Notes receivable issued upon exercise of stock options             $      --       $ 122,000       $      --
                                                                       =========       =========       =========

    Deposit transferred to property and equipment                      $      --       $      --         $85,000
                                                                       =========       =========       =========

    Notes receivable for sales of liquor license                         $67,000       $      --         $35,000
                                                                       =========       =========       =========

</TABLE>


                 See notes to consolidated financial statements
                                       F-6

<PAGE>




<PAGE>




                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

          SEPTEMBER 28, 2002, SEPTEMBER 29, 2001 AND SEPTEMBER 30, 2000




NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Organization and Capitalization

         Incorporated in 1959, Flanigan's Enterprises, Inc. ("Flanigan's" or the
         "Company")  operates  in  South  Florida  as a  chain  of  full-service
         restaurants  and package  liquor  stores.  At September  28, 2002,  the
         Company owned and operated two full-service  restaurants,  four package
         liquor stores and four combination full-service restaurants and package
         liquor  stores in Florida.  In  addition,  Flanigan's  owns one club in
         Georgia,  which is operated pursuant to a management  agreement with an
         unrelated third party. The Company holds interests in six of the twelve
         franchised  units  through  joint  venture  investments.  The Company's
         restaurants are operated under the  "Flanigan's  Seafood Bar and Grill"
         servicemark  while the Company's  package stores are operated under the
         "Big Daddy's Liquors" servicemark.

         The  Company's  Articles of  Incorporation,  as amended,  authorize the
         Company to issue and have  outstanding at any one time 5,000,000 shares
         of common stock at a par value of $.10.

         The  Company  operates  under a 52-53  week year  ending  the  Saturday
         closest to September 30.

     Principles of Consolidation

         The  consolidated   financial   statements   include  the  accounts  of
         Flanigan's  Enterprises,  Inc. and its  subsidiaries,  all of which are
         wholly owned.  All significant  intercompany  transactions and balances
         have been eliminated in consolidation.

     Use of Estimates

         The  preparation of financial  statements in conformity with accounting
         principles  generally accepted in the United States requires management
         to make estimates and assumptions  that affect the amounts  reported in
         the  financial  statements  and  accompanying  notes.   Although  these
         estimates  are based on  management's  knowledge of current  events and
         actions it may undertake in the future, they may ultimately differ from
         actual results.

     Cash and Cash Equivalents

         The  Company  considers  all highly  liquid  debt  instruments  with an
         original maturity of three months or less at the date of purchase to be
         cash equivalents.

     Inventories

         Inventories,  which consist primarily of packaged liquor products,  are
         stated at the lower of average  cost or market.  See Note 2 regarding a
         change in accounting method.

                                       F-7

<PAGE>


                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)


NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

     Liquor Licenses

         The cost of liquor  licenses  purchased  prior to October 21, 1970 (the
         date  Accounting   Principles  Board  ("APB")  Opinion  No.  17  became
         effective),  amounted to approximately  $130,000 at September 28, 2002.
         These  licenses  are not  amortized  unless an  impairment  in value is
         indicated.  The costs of all liquor  licenses  acquired  subsequent  to
         October 21, 1970 are amortized over a period of 40 years.

     Property and Equipment

         For financial reporting,  the Company uses the straight-line method for
         providing depreciation and amortization on property and equipment.  The
         estimated useful lives range from three to five years for vehicles, and
         three to seven years for furniture and equipment.

         Leasehold  interests are amortized  over the minimum term of the lease.
         Leasehold improvements are amortized over the life of the lease up to a
         maximum of 10 years. If the locations are sold or abandoned  before the
         end of the amortization period, the unamortized costs are expensed. The
         office building is being amortized over forty years.

     Investment in Joint Ventures

         The Company uses the equity method of accounting when the Company has a
         twenty  percent to fifty  percent  interest in other  companies,  joint
         ventures,  and partnerships,  and can exercise  significant  influence.
         Under the equity method,  original investments are recorded at cost and
         are  adjusted  for the  Company's  share of  undistributed  earnings or
         losses. All significant intercompany profits are eliminated.

     Concentrations of Credit Risk

         Financial   instruments  that   potentially   subject  the  Company  to
         concentrations  of credit risk are cash and cash  equivalents and notes
         and mortgages receivable.

         From  time to time  during  the  year,  the  Company  had  deposits  in
         financial  institutions in excess of the federally  insured limits.  At
         September  28,  2002,  the Company had  deposits in excess of federally
         insured limits of  approximately  $677,000.  The Company  maintains its
         cash with  high  quality  financial  institutions,  which  the  Company
         believes limits these risks.

         Notes  and  mortgages  receivable  arise  primarily  from  the  sale of
         operating assets,  including liquor licenses.  Generally,  those assets
         serve as collateral for the  receivable.  Management  believes that the
         collateral,  coupled with the credit standing of the purchasers, limits
         these risks.

                                      F-8

<PAGE>


                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)



NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

     Major Supplier/Refundable Deposit

         In the fourth  quarter of fiscal  2001,  the  Company  entered  into an
         addendum  to a master  distribution  agreement  with a major  supplier,
         which entitles the Company to receive  certain  purchase  discounts and
         advertising  allowances.  In  exchange,  the  Company  agreed  to  make
         payments of 35% of  restaurant  sales weekly  against  amounts owed for
         food purchases. The Company was required to make a deposit of $750,000,
         which is refundable,  to the extent not applied  against amounts owing,
         upon termination of the agreement.  The Company purchases substantially
         all of its food products from this vendor, however, management believes
         that several other alternative vendors are available if necessary.

     Revenue Recognition

         The Company records  revenues from normal recurring sales upon the sale
         of food  and  beverages  and  the  sale of  packaged  liquor  products.
         Continuing royalties, which are a percentage of net sales of franchised
         stores, are accrued as income when earned.

     Pre-opening Costs

         Pre-opening costs are those typically  associated with the opening of a
         new store or restaurant. Pre-opening costs are expensed as incurred.

     Advertising Costs

         Advertising costs are expensed as incurred.  Advertising costs incurred
         for the  years  ended  September  28,  2002,  September  29,  2001  and
         September 30, 2000 were $154,000, $162,000 and $174,000, respectively.

     Fair Value of Financial Instruments

         The  respective  carrying value of certain  on-balance-sheet  financial
         instruments  approximated their fair value.  These instruments  include
         cash and cash  equivalents,  notes and  mortgages  receivable,  damages
         payable on terminated or rejected leases,  debt and capital leases, and
         accounts  payable.  Fair values were  assumed to  approximate  carrying
         values for those financial instruments,  which are short-term in nature
         or are receivable or payable on demand.

         The fair value of long-term  debt is estimated  based on current  rates
         offered to the Company for debt of  comparable  maturities  and similar
         collateral requirements.

                                      F-9

<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)



NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

     Recently Issued Accounting Pronouncements

         In June 2002, the Financial  Accounting Standards Board issued SFAS No.
         146,   "Accounting   for  Costs   Associated   with  Exit  or  Disposal
         Activities."  This  statement   addresses   financial   accounting  and
         reporting for costs associated with exit or disposal  activities.  SFAS
         146 will become  effective in the second  quarter of fiscal  2003.  The
         Company  believes that the adoption of this  statement  will not have a
         significant  impact on the results of operations or financial  position
         of the Company.

         In August 2001, the Financial  Accounting  Standards  Board issued SFAS
         No. 144,  "Accounting  for the  Impairment  or  Disposal of  Long-Lived
         Assets".  SFAS No. 144,  which is effective for fiscal years  beginning
         after  December  15, 2001 and for interim  periods  within those fiscal
         years,   requires  testing  for  recoverability  of  long-lived  assets
         whenever events or  circumstances  indicate that the carrying value may
         not be  recoverable.  An impairment  loss shall be recognized  when the
         carrying  value of a  long-lived  asset  exceeds  its fair  value.  The
         Company  does not believe that the adoption of SFAS No. 144 will have a
         material effect on the consolidated financial statements.

         In June 2001, the Financial  Accounting Standards Board issued SFAS No.
         143,  "Accounting  for Asset  Retirement  Obligations".  The  Statement
         addresses  accounting  for and  reporting  obligations  relating to the
         retirement  of long lived assets by requiring  that the fair value of a
         liability  for an asset  retirement  obligation  be  recognized  in the
         period in which it is incurred if a  reasonable  estimate of fair value
         can be made. The Statement  will be effective for financial  statements
         issued for fiscal years beginning after June 15, 2002. The Company does
         not  believe  that the  adoption  of SFAS No.  143 will have a material
         effect on the consolidated financial statements.

         Also in June 2001, the Financial Accounting Standards Board issued SFAS
         No. 142, "Goodwill and Other Intangible Assets".  SFAS No. 142 requires
         companies  to  account  for  goodwill  and  other  intangibles  in  the
         following  manner.  Intangible  assets  which  are  acquired  shall  be
         recognized  and  measured  based on fair value.  Recognized  intangible
         assets  are to be  amortized  over  their  useful  life.  Goodwill  and
         intangible  assets  determined  to  have  an  indefinite  life  are not
         amortized.  Intangible assets that are not amortized and goodwill shall
         be tested for impairment  annually.  The provisions of SFAS No. 142 are
         to be  applied in fiscal  years  beginning  after  December  15,  2001.
         Retroactive application is not permitted.  The Company does not believe
         that the  adoption  of SFAS No. 142 will have a material  effect on the
         consolidated financial statements.

         In June 2001, the Financial  Accounting Standards Board issued SFAS No.
         141,  "Business   Combinations".   SFAS  No.  141  addresses  financial
         accounting  and  reporting  for  business  combinations.  All  business
         combinations  are to be  accounted  for using one method- the  purchase
         method.  SFAS  No.  141 is  effective  for  all  business  combinations
         initiated  after  June 30,  2001.  SFAS No. 141 did not have a material
         effect on the Company's consolidated financial statements.

                                      F-10

<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)


NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

     Recently Issued Accounting Pronouncements (Continued)

         In December 1999, the Securities and Exchange  Commission  issued Staff
         Accounting Bulletin ("SAB") No. 101, "Revenue  Recognition in Financial
         Statements".  SAB 101 provides  guidance for revenue  recognition under
         certain  circumstances,  and became  effective during fiscal year 2001.
         SAB 101 did not have a material  effect on the  Company's  consolidated
         results of operations, financial position and cash flows.

         In June 1998, the Financial  Accounting Standards Board issued SFAS No.
         133,  "Accounting for Derivative  Instruments and Hedging  Activities".
         SFAS No. 133 requires companies to recognize all derivatives  contracts
         as either  assets or  liabilities  in the balance  sheet and to measure
         them at fair value. If certain  conditions are met, a derivative may be
         specifically  designated as a hedge, the objective of which is to match
         the timing of the gain or loss  recognition  on the hedging  derivative
         with the recognition of (i) the changes in the fair value of the hedged
         asset or liability that are attributable to the hedged risk or (ii) the
         earnings effect of the hedged forecasted transaction.  For a derivative
         not designated as a hedging instrument,  the gain or loss is recognized
         in income in the period of change.  On June 30,  1999,  the FASB issued
         SFAS No.  137,  "Accounting  for  Derivative  Instruments  and  Hedging
         Activities - Deferral of the Effective Date of FASB Statement No. 133."
         SFAS No. 133 as amended  by SFAS No.  137 is  effective  for all fiscal
         quarters of fiscal years  beginning  after June 15, 2000. In June 2000,
         the FASB  issued  SFAS No.  138,  "Accounting  for  Certain  Derivative
         Instruments and Certain Hedging Activities." SFAS No. 133 as amended by
         SFAS No. 137 and 138 is  effective  for all fiscal  quarters  of fiscal
         years  beginning  after June 15, 2000.  The adoption of SFAS No. 133 in
         fiscal  year  2001  did not have a  material  effect  on the  Company's
         consolidated financial statements.

     Derivative Financial Instruments and Hedging Activities

         The Company holds a derivative  financial instrument for the purpose of
         hedging the risk of certain identifiable and anticipated  transactions.
         In general, the type of risk hedged is that relating to the variability
         of future  earnings  and cash flows  caused by  movements  in  interest
         rates. In hedging the transaction, the Company, in the normal course of
         business,  holds an interest rate swap,  which hedges the fair value of
         fixed-rate debt and cash flows of variable-rate financial assets.

         Derivatives  are held only for the purpose of hedging  such risks,  not
         for  speculation.  Generally,  the  Company  entered  into the  hedging
         relationship  such that  changes  in the fair  values or cash  flows of
         items  and  transactions  being  hedged  are  expected  to be offset by
         corresponding changes in the value of the derivative.  At September 28,
         2002,  a  hedging  relationship  existed  for the  mortgage  obligation
         described in Note 9.


                                      F-11
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)


NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

     Income Taxes

         The  Company  accounts  for  its  income  taxes  using  SFAS  No.  109,
         "Accounting  for Income  Taxes",  which  requires  the  recognition  of
         deferred  tax   liabilities   and  assets  for   expected   future  tax
         consequences  of  events  that  have  been  included  in the  financial
         statements or tax returns. Under this method,  deferred tax liabilities
         and assets are determined based on the difference between the financial
         statement  and tax bases of assets and  liabilities  using  enacted tax
         rates in effect for the year in which the  differences  are expected to
         reverse.

     Stock-Based Compensation

         Statement of Financial  Accounting  Standards No. 123,  "Accounting for
         Stock-Based  Compensation" ("SFAS No. 123"),  encourages,  but does not
         require companies to record stock-based compensation plans using a fair
         value based  method.  The Company has chosen to continue to account for
         stock-based   compensation  using  the  intrinsic  value  based  method
         prescribed in Accounting  Principles Board Opinion No. 25,  "Accounting
         for Stock  Issued to  Employees."  Accordingly,  compensation  cost for
         stock  options is measured as the excess,  if any, of the quoted market
         price of the  Company's  common stock at the date of the grant over the
         amount an employee must pay to acquire the stock.

     Long-Lived Assets

         The Company continually evaluates whether events and circumstances have
         occurred  that  may  warrant  revision  of the  estimated  life  of its
         intangible and other long-lived assets or whether the remaining balance
         of its intangible and other  long-lived  assets should be evaluated for
         possible impairment.  If and when such factors, events or circumstances
         indicate that intangible or other long-lived assets should be evaluated
         for  possible  impairment,   the  Company  will  make  an  estimate  of
         undiscounted  cash  flow  over the  remaining  lives of the  respective
         assets in measuring their recoverability.

     Reclassifications

         Certain  amounts in the 2001 and 2000  financial  statements  have been
         reclassified to conform with the 2002 financial statements.


                                      F-12

<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)


NOTE 2. CHANGE IN ACCOUNTING METHOD

         During September 2002, the Company changed its method of accounting for
         package  store  inventory  from  first in,  first out (FIFO) to average
         cost.  Management believes that the average cost method better captures
         and allocates  inventory  costs  relating to volume  discounts and free
         product  received by the Company.  The change resulted in a decrease in
         inventory value of approximately  $160,000,  which decreased net income
         by $106,000 and basic  earnings per share by $.05.  It was not possible
         to calculate the cumulative  effect of the change in accounting  method
         on prior years. Accordingly, proforma results for prior years under the
         average cost method are not presented.


NOTE 3. NOTES AND MORTGAGES RECEIVABLES

         Receivables,  net of allowances for uncollectible  amounts and deferred
         gains, consist of the following at September 28, 2002 and September 29,
         2001:

<TABLE>
<CAPTION>
                                                                                          2002              2001
                                                                                          ----              ----
         <S>                                                                            <C>               <C>
         Notes and mortgages  receivable from unrelated parties,
           bearing  interest at rates ranging from 10.5% to 15% and due in varying
           installments through 2013                                                    $108,000          $121,000
         Notes and mortgages receivable from related parties, bearing interest
           at rates ranging from 10% to 14% and due in varying installments
           through 2007                                                                  144,000           150,000
                                                                                       ---------         ---------
                                                                                         252,000           271,000
            Less deferred gains                                                           75,000            80,000
                                                                                       ---------         ---------
                                                                                         177,000           191,000
            Amount representing current portion                                           85,000           120,000
                                                                                       ---------         ---------
                                                                                       $  92,000         $  71,000
                                                                                       =========         =========
</TABLE>


         The majority of the notes and mortgages  receivable  represent  amounts
         owed to the  Company  for store  operations  which were sold.  Unless a
         significant  amount of cash is received on the sale, a pro rata portion
         of the gain is deferred  and  recognized  only as payments on the notes
         and  mortgages  are  received  by the  Company.  Any losses on sales of
         stores are recognized  currently.  Approximately  $5,000,  $4,000,  and
         $4,000 of deferred  gains were  recognized on collections of such notes
         receivable during the fiscal years ended September 28, 2002,  September
         29, 2001, and September 30, 2000, respectively.

         Future  scheduled  payments on the  receivables  at September  28, 2002
         consist of the following:

              2003                                              $  85,000
              2004                                                 18,000
              2005                                                 20,000
              2006                                                 13,000
              2007                                                 71,000
              2008                                                      -
              Thereafter                                           45,000
                                                                 --------
                                                                 $252,000
                                                                 ========

                                      F-13
<PAGE>

                 FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)



NOTE 4. PROPERTY AND EQUIPMENT

<TABLE>
<CAPTION>
                                                                September 28,          September 29,
                                                                    2002                   2001
                                                                    ----                   ----

              <S>                                               <C>                     <C>
              Furniture and equipment                           $  6,191,000            $  6,287,000
              Leasehold interests and improvements                 5,362,000               5,256,000
              Land and land improvements                           1,013,000               1,007,000
              Building and improvements                            1,265,000               1,208,000
              Vehicles                                               203,000                 186,000
                                                                ------------            ------------
                                                                  14,034,000              13,944,000
              Less accumulated depreciation and amortization       8,536,000               8,294,000
                                                                ------------            ------------
                                                                $  5,498,000            $  5,650,000
                                                                ============            ============
</TABLE>


NOTE 5. INVESTMENTS IN JOINT VENTURES

     Miami, Florida

         The  Company  operated  a  restaurant  in  Miami,   Florida  under  the
         "Flanigan's  Seafood  Bar and Grill"  servicemark  pursuant  to a joint
         venture  agreement.  The Company is the general partner and has a fifty
         percent limited partnership interest. The Company closed the restaurant
         in the second  quarter of 2002.  See Eminent  Domain Action in Note 10.
         The  partnership  received  $700,000 in the eminent domain action.  The
         investment  in this joint  venture has been  adjusted to $350,000,  the
         Company's proportionate share of the current value of the assets in the
         joint venture.  The partnership plans to locate an appropriate site for
         another restaurant which the Company will operate.

     Fort Lauderdale, Florida

         The Company has a franchise  agreement with a unit in Fort  Lauderdale.
         The Company is a twenty-five  percent limited partner in the franchise.
         Other  related  parties,  including,  but not limited to,  officers and
         directors of the Company and their families are also investors.

     Surfside, Florida

         The Company has an investment in a limited partnership, which purchased
         the assets of a restaurant  in Surfside,  Florida and  renovated it for
         operation under the "Flanigan's Seafood Bar and Grill" servicemark.

         The Company acts as general  partner of the limited  partnership and is
         also a  forty-two  percent  limited  partner.  Other  related  parties,
         including,  but not limited to,  officers and  directors of the Company
         and their families are also investors.


                                      F-14

<PAGE>


                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)



NOTE 5. INVESTMENTS IN JOINT VENTURES (Continued)

     Kendall, Florida

         During 1999,  the Company made an investment in a limited  partnership,
         which  constructed and now operates a restaurant  under the "Flanigan's
         Seafood Bar and Grill"  servicemark in Kendall,  Florida.  Construction
         began in late 1999 and the restaurant opened in April 2000. The Company
         is the general  partner  and has a forty  percent  limited  partnership
         interest.

     West Miami, Florida

         During 2001,  the Company made an investment in a limited  partnership,
         which  purchased,  renovated  and now operates a  restaurant  under the
         "Flanigan's Seafood Bar and Grill" servicemark in West Miami,  Florida.
         The restaurant  opened for business in October 2001. The Company is the
         general  partner  and has a  twenty-five  percent  limited  partnership
         interest.  Other  related  parties,  including,  but  not  limited  to,
         officers  and  directors  of the  Company and their  families  are also
         investors.

     Weston, Florida

         During 2002,  the Company made an investment in a limited  partnership,
         which has acquired and is currently  renovating a restaurant  under the
         "Flanigan's Seafood Bar and Grill" servicemark in Weston,  Florida. The
         restaurant  is expected to open for business by December 31, 2002.  The
         Company is the general  partner and has a twenty-five  percent  limited
         partnership  interest  as of  September  28,  2002.  During  the fourth
         calendar   quarter  of  2002,  the  Company  invested  $47,850  for  an
         additional 3% interest, bringing the total ownership percentage to 28%.
         Other  related  parties,  including,  but not limited to,  officers and
         directors of the Company and their families are also  investors.  Prior
         to  the  formation  of  the  limited   partnership   and  beginning  of
         renovations,  the Company  operated a  restaurant  on this site for the
         months October 2001 through July 2002. See Note 10.

     Summary

         The following is a summary of condensed unaudited financial information
         pertaining to the Company's joint venture investments:

<TABLE>
<CAPTION>
                                                 2002             2001              2000
                                                 ----             ----              ----
           <S>                               <C>              <C>               <C>
           Financial Position:
              Current assets                 $    909,000     $    632,000      $   403,000
              Non-current assets                6,286,000        6,120,000        4,590,000
              Current liabilities               1,403,000          679,000          588,000
              Non-current liabilities             436,000          489,000          538,000

           Operating Results:
              Revenues                         14,119,000       12,429,000       10,208,000
              Gross profit                      9,054,000        7,866,000        6,480,000
              Net income                        2,029,000        1,258,000        1,192,000

</TABLE>

                                      F-15

<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)



NOTE 6. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

<TABLE>
<CAPTION>

                                                    September 28,      September 29,
                                                        2002               2001
                                                        ----               ----
<S>                                                 <C>                <C>
               Accounts payable                     $   734,000        $   914,000
               Lease security deposit                   200,000            200,000
               Salaries and wages                       130,000            130,000
               Property taxes                           123,000            128,000
               Deferred revenue, joint venture           94,000                  -
               Potential uninsured claims                48,000             91,000
               Other                                    102,000            101,000
                                                     ----------         ----------
                                                     $1,431,000         $1,564,000
                                                     ==========         ==========
</TABLE>



NOTE 7. DAMAGES PAYABLE ON TERMINATED OR REJECTED LEASES

         On November 4, 1985, Flanigan's Enterprises, Inc., not including any of
         its  subsidiaries,  filed a  voluntary  petition  in the United  States
         Bankruptcy  Court for the  Southern  District  of  Florida  seeking  to
         reorganize under Chapter 11 of the Federal Bankruptcy Code.  Flanigan's
         was  authorized to continue the  management and control of its business
         and property as debtor-in-possession  under the Bankruptcy Code. On May
         5, 1987,  Flanigan's Plan of  Reorganization,  as amended and modified,
         was confirmed by the Bankruptcy Court. On December 28, 1987, Flanigan's
         was officially discharged from bankruptcy.

         In fiscal 1986 in connection with the bankruptcy  petition,  Flanigan's
         recorded  estimated  damages of  $4,278,000  for claims for losses as a
         result of rejected leases.  Because the damage payments were to be made
         over nine  years,  the total  amount  due was  discounted  at a rate of
         9.25%,   Flanigan's   then   effective   borrowing   rate.   Flanigan's
         renegotiated  the payment of this obligation to extend into fiscal 2002
         which  effectively  reduced  the  discount  rate  to  3.71%.  Remaining
         liabilities  for damage  payments are  included as "Damages  Payable on
         Terminated or Rejected Leases" in the accompanying consolidated balance
         sheet.  Based on the borrowing rate currently  available to the Company
         for bank loans with  similar  terms and  average  maturities,  the fair
         value  of  damages  payable  on  terminated  and  rejected  leases  was
         approximately  $117,000 at September 29, 2001.  All damages  payable on
         terminated  and rejected  leases were  satisfied in full in fiscal year
         ending 2002.


                                      F-16
<PAGE>


                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)


NOTE 8. INCOME TAXES

         The components of the Company's  provision  (benefit) for income taxes,
         for the fiscal years ended 2002, 2001 and 2000 are as follows:

<TABLE>
<CAPTION>
                                                                  2002              2001                2000
                                                                  ----              ----                ----
              <S>                                               <C>                <C>                <C>

              Current:
                 Federal                                        $383,000          $366,000            $284,000
                 State                                           136,000           117,000              89,000
                                                                --------          --------            --------
                                                                 519,000           483,000             373,000
                                                                --------          --------            --------
              Deferred:
                 Federal                                         161,000             6,000             (31,000)
                 State                                             8,000                 -              (1,000)
                                                                --------          --------            --------
                                                                 169,000             6,000              32,000
                                                                --------          --------            --------
                                                                $688,000          $489,000            $341,000
                                                                ========          ========            ========
</TABLE>


         A reconciliation  of income tax computed at the statutory  federal rate
         to income tax expense (benefit) is as follows:

<TABLE>
<CAPTION>
                                                                  2002               2001                2000
                                                                  ----               ----                ----

              <S>                                               <C>                <C>                <C>
              Tax provision at the statutory rate of 34%        $704,000           $686,000            $580,000
              State income taxes, net of federal income tax       62,000             61,000              51,000
              Deferred income taxes                              169,000              6,000             (32,000)
              Net operating loss utilization                           -                  -             (41,000)
              Tip credit utilization                            (261,000)          (256,000)           (199,000)
              Other                                               14,000             (8,000)            (18,000)
                                                                --------          --------            --------
                                                                $688,000           $489,000            $341,000
                                                                ========           ========            ========
</TABLE>


         At  September   28,  2002,   the  Company  has   available  tip  credit
         carryforwards of approximately $149,000, which expire through 2015, and
         alternative minimum tax credit carryforwards of approximately  $74,000,
         which do not expire.

         In addition to tax credit  carryforwards,  the Company had deferred tax
         assets which arise primarily due to depreciation  recorded at different
         rates  for  tax  and  book  purposes,   investment  in  joint  ventures
         accounting  difference  for  book  and  tax  purposes,  capital  leases
         reported  as  operating  leases  for tax  purposes,  and  accruals  for
         potential  uninsured claims recorded for financial  reporting  purposes
         but not recognized for tax purposes.


                                      F-17

<PAGE>


                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)


NOTE 8. INCOME TAXES (Continued)

         The  components of the deferred tax assets were as follows at September
         28, 2002 and September 29, 2001:

<TABLE>
<CAPTION>
                                                                 2002            2001
                                                                 ----            ----
          <S>                                                  <C>             <C>
          Current:
             Tip credit carryforward                           $149,000        $213,000
             Alternative minimum tax credit                      74,000          74,000
             Accruals for potential uninsured claims             16,000          31,000
                                                               --------        --------
                                                               $239,000        $318,000
                                                              =========        ========
          Long-Term:
             Book/tax differences in property and equipment    $201,000        $327,000
             Joint venture investments                           47,000          11,000
                                                              ---------        --------
                                                              $ 248,000        $338,000
                                                              =========        ========
</TABLE>


<TABLE>
<CAPTION>

NOTE 9. LONG-TERM DEBT
                                                                                     September 28,      September 29,
                                                                                         2002               2001
                                                                                         ----               ----
<S>                                                                                      <C>               <C>

         Mortgage  payable to bank;  secured by first  mortgage  on a  building;
         payable  $1,594 per month,  plus interest  through  maturity in August,
         2008, at which time the unpaid principal of approximately $736,000 plus
         unpaid  interest  becomes due. The Company has entered into an interest
         rate swap agreement for a notional  amount of  approximately  $895,000.
         The interest rate swap  agreement  hedges the interest rate risk of the
         mortgage payable to a fixed rate of 6.12%.                                      $876,000          $893,000

         Note payable to bank,  unsecured,  bearing  interest at prime (4.75% at
         September 28, 2002);  payable in monthly  installments of principal and
         interest, maturing in July, 2004.                                                418,000                --

         Mortgage payable,  secured by land,  bearing interest at 8%; payable in
         monthly installments of principal and interest, maturing in April 2013.          314,000           325,000

         Note payable to bank, secured by general assets of the Company; bearing
         interest at 6% payable in monthly installments.  This note was paid off
         during the year ended  September  28, 2002 with the proceeds from a new
         note.                                                                                 --           680,000

         Notes  payable to various  employees,  related and  unrelated  parties,
         secured by various company assets,  bearing interest at 12%, payable in
         monthly installments of principal and interest, maturing in July 2002.                --            79,000
                                                                                       ----------        ----------
                                                                                        1,608,000         1,977,000
            Less current portion                                                          259,000           262,000
                                                                                       ----------        ----------
                                                                                       $1,349,000        $1,715,000
                                                                                       ==========        ==========
</TABLE>

                                      F-18

<PAGE>


                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)



NOTE 9. LONG-TERM DEBT (Continued)

            Long-term debt at September 28, 2002 matures as follows:

            2003                              $   259,000
            2004                                  214,000
            2005                                   35,000
            2006                                   38,000
            2007                                   43,000
            Thereafter                          1,019,000
                                               ----------
                                              $ 1,608,000
                                               ==========


NOTE 10. COMMITMENTS, CONTINGENCIES AND OTHER MATTERS

     Legal Matters

         The Company is a party to various claims,  legal actions and complaints
         arising  in the  ordinary  course of its  business.  In the  opinion of
         management,  all such matters are without merit or involve such amounts
         that an  unfavorable  disposition  would  not have a  material  adverse
         effect on the  financial  position  or  results  of  operations  of the
         Company.

         During fiscal year 2000, the Company was served with several complaints
         alleging  violations of the Americans with  Disabilities Act ("ADA") at
         all of its locations.  As of September 28, 2002,  all  complaints  have
         been settled.

     Leases

         The Company leases a substantial  portion of the land and building used
         in its operations under leases with initial terms expiring between 2003
         and 2049.  Renewal  options are  available  on many of the  leases.  In
         certain   instances,   lease  rentals  are  subject  to  cost-of-living
         increases or fair market  rental  appraisals  and/or  sales  overrides.
         Certain properties are subleased through various expiration dates.

         On July 29, 2001, the Company,  on behalf of a limited  partnership not
         formed at the time,  entered  into a sublease  agreement on an existing
         restaurant to renovate and operate the restaurant under the "Flanigan's
         Seafood Bar and Grill" servicemark.  The term is for fifteen years with
         the option to extend for three  additional  periods of five years each.
         The sublease  provides for minimum annual rent payments plus additional
         rent  from  operational   profits.   In  September  2002,  the  limited
         partnership  was  formed  and the  rights  and  obligations  under  the
         sublease agreement now reside with the limited partnership. See Note 5.


                                      F-19

<PAGE>


                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)



NOTE 10. COMMITMENTS, CONTINGENCIES AND OTHER MATTERS

     Leases (Continued)

         During the fourth quarter of fiscal year 2001, the Company entered into
         a ground  lease for an out parcel in  Hollywood,  Florida.  The Company
         plans to  construct  a building on the out  parcel,  one-half  (1/2) of
         which will be used by the Company for the operation of a package liquor
         store and the other  one-half (1/2) will be subleased by the Company as
         retail space.  The Company  filed its building  plans during the fourth
         quarter of fiscal year 2002 and expects the building to be complete and
         the package  liquor  store open for  business by the end of fiscal year
         2003. The estimated construction cost of this building has not yet been
         determined.

         Future minimum lease payments under non-cancelable operating leases are
         as follows:

                  2003                                      $   842,000
                  2004                                          802,000
                  2005                                          607,000
                  2006                                          336,000
                  2007                                          195,000
                  Thereafter                                  1,603,000
                                                             ----------
                     Total                                  $ 4,385,000
                                                             ==========

         Total rent expense for all operating  leases  (including  those with an
         initial term of less than one year and net of subleases)  was $867,000,
         $758,000  and  $703,000  in 2002,  2001 and 2000  respectively,  and is
         included  in  "Occupancy   costs"  in  the  accompanying   consolidated
         statements of income.

         The Company guarantees various leases for franchisees. Remaining rental
         payments required under these leases total approximately $7,265,000.

     Franchise Programs

         At September 28, 2002, the Company operated seven units under franchise
         agreements, one of which the Company has an ownership interest pursuant
         to a joint venture agreement. Of the remaining six franchised stores,
         four are owned and operated by related parties. Under the franchise
         agreements, the Company agrees to provide guidance, advice and
         management assistance to the franchisees. In addition, the Company acts
         as fiscal agent for the franchisees whereby the Company collects all
         revenues and pays all expenses and distributions. The Company also,
         from time to time, advances funds on behalf of the franchisees for the
         cost of renovations. The resulting amounts receivable from and payable
         to these franchisees are reflected in the accompanying consolidated
         balance sheet as either an asset or a liability. The Company also
         agrees to sponsor and manage cooperative buying groups on behalf of the
         franchisees for the purchase of inventory. The franchise agreements
         provide for fees to the Company of approximately 3% of gross sales. The
         Company is not currently offering or accepting new franchises.


                                      F-20

<PAGE>


                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)



NOTE 10. COMMITMENTS, CONTINGENCIES AND OTHER MATTERS (Continued)

     Employment Agreements

     Chief Executive Officer

         The Company has entered  into an  employment  agreement  with the Chief
         Executive  Officer,  which is  renewable  annually on December  31. The
         agreement provides, among other things, for a base annual salary not to
         exceed  $150,000 and a  performance  bonus equal to fifteen  percent of
         pre-tax  net income in excess of  $650,000.  In fiscal  year 2002,  the
         agreement  was  amended to  increase  the  performance  bonus to 20% of
         pre-tax  net  income  in  excess  of  $650,000,  10% of  which is to be
         allocated  to other  members of  management.  Bonuses for fiscal  years
         2002, 2001 and 2000 amounted to  approximately  $363,000,  $228,000 and
         $150,000,  respectively.  In addition,  the  agreement  provided for an
         option to purchase 4.99% of the outstanding common stock of the Company
         (but not less than  90,700  shares)  at $3.25 per share,  which  option
         expired  January 8, 2002.  All of the  remaining  unexercised  options,
         which  represented  the right to purchase  72,395 common  shares,  were
         exercised in December 2001 in exchange for approximately $235,000.

     Store Managers

         In the ordinary course of business,  the Company enters into employment
         agreements with store managers,  which provide for, among other things,
         base annual salary, performance bonuses, and various employee benefits.
         In  principle,  these  agreements  may be terminated by the Company for
         cause and by the manager with notice.

     Management Agreement

         The Company receives an owner's fee pursuant to a management  agreement
         with a company which operates a club in Atlanta,  Georgia, owned by the
         Company. The management  agreement,  which was executed in fiscal 1992,
         contained one five-year  renewal option,  which the management  company
         exercised in fiscal  2001.  The  exercise  provided  for an  additional
         security deposit of $200,000 to be paid by the management company.  The
         Company  receives  the  greater  of  $150,000  or  10% of  gross  sales
         annually, paid monthly.

     Eminent Domain Action

         During fiscal year 2000,  the Company  received  official  notification
         from the State of Florida,  Department of  Transportation  ("DOT") that
         the DOT was  exercising its right of eminent domain to "take" the hotel
         property  upon which a  restaurant,  operated by the Company as general
         partner of a limited  partnership,  was located.  The DOT took title to
         the hotel  property  during the second  quarter of fiscal year 2002 and
         the restaurant  was forced to close.  As a result of the eminent domain
         proceedings, the limited partnership received $700,000. See Note 5.


                                      F-21

<PAGE>


                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)


NOTE 11. COMMON STOCK

    Treasury Stock

     Purchase of Common Shares

         During 2002,  2001 and 2000,  the Company  purchased a total of 68,803,
         4,000 and  105,971  shares of Company  common  stock at a total cost of
         approximately  $423,000,  $18,000,  and  $492,000  under  a  repurchase
         program authorized by the Board of Directors.

     Sale of Common Shares

         During 2002,  2001,  and 2000, the Company sold an aggregate of 72,795,
         70,000,  and 12,000 shares of common stock  pursuant to the exercise of
         options  to  certain  employee/officers  for a total  of  approximately
         $237,000,  $131,000  and  $19,000,  respectively.  During  2001,  these
         employee/officers purchased their shares, in part, by means of notes of
         approximately  $122,000,  which were  non-interest  bearing  and due on
         demand. The notes were fully repaid during August 2002.

     Key Employee Incentive Stock Option Plan

         In  December  1993,  the Board of  Directors  approved  a Key  Employee
         Incentive Stock Option Plan, which reserved and authorized the issuance
         of 100,000 shares of the Company's common stock to eligible  employees.
         At the Company's 1994 annual meeting,  the  stockholders  approved this
         plan. The stock options vest over a period of one year.

         Options for all of the shares of common  stock that were  reserved  for
         issuance  to the Key  Employee  Incentive  Stock  Option Plan have been
         issued.

     Stock Options

         In April 2002, the Company granted options to purchase 25,500 shares of
         Company  common stock to certain  employees.  The options vest one year
         from the grant date,  have a five-year  life,  and an exercise price of
         $6.10 per share, the then market price of the common stock.

         In April 2001, the Company granted options to purchase 57,800 shares of
         Company  common stock to certain  employees.  The options vest one year
         from the grant date,  have a five-year  life,  and an exercise price of
         $4.16  per  share,  the then  market  price  of the  common  stock.  At
         September 28, 2002, 47,750 shares remain outstanding and exercisable.

         The  Company  applies  APB  No.  25  and  related   interpretations  in
         accounting for its  stock-based  compensation  plans.  Accordingly,  no
         compensation  cost has been  recognized in connection with the granting
         of these stock options.

                                      F-22

<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)


NOTE 11. COMMON STOCK (Continued)

Stock Options (Continued)

         Had compensation cost for the options been determined based on the fair
         value at the grant date  consistent  with SFAS 123, the  Company's  net
         income would have been as follows:

                                        2002           2001            2000
                                        ----           ----            ----
          Net income:
             As Reported             $1,383,000     $1,529,000      $1,364,000
             Pro Forma               $1,268,000     $1,450,000      $1,308,000

          Earnings Per Share:
             Basic:
                As Reported                $.71           $.80            $.73
                Pro Forma                  $.65           $.76            $.70
             Diluted:
                As Reported                $.70           $.80            $.71
                Pro Forma                  $.64           $.75            $.68

         The Company used the  Black-Scholes  option-pricing  model to determine
         the fair value of grants made in 2002 and 2001.  No grants were made in
         2000. The following  assumptions  were applied in  determining  the pro
         forma compensation cost:
                                                 2002             2001

          Risk Free Interest Rate                4.0%             6.0%
          Expected Dividend Yield                  -                -
          Expected Option Life                  5 years         5 years
          Expected Stock Price Volatility         75%              75%

         Changes in outstanding  incentive stock options for common stock are as
         follows:


                                               2002         2001         2000
                                               ----         ----         ----

           Outstanding at beginning of year   207,595      233,045      276,295
           Options granted                     25,500       57,800           --
           Options exercised                  (72,795)     (70,000)     (12,000)
           Options expired                    (31,400)     (13,250)     (31,250)
                                              -------      -------      -------
           Outstanding at end of year         128,900      207,595      233,045
                                              -------      -------      -------
           Exercisable at end of year         103,400      149,795      233,045
                                              =======      =======      =======

         Weighted  average option  exercise price  information  for fiscal years
         2002 and 2001 is as follows:

                                                 2002          2001       2000
                                                 ----          ----       ----

           Outstanding at beginning of year      $3.97        $3.27       $2.50
                                                 =====        =====       =====
           Granted during the year               $6.10        $4.16       $   -
                                                 =====        =====       ====
           Exercised during the year             $3.25        $1.89       $1.63
                                                 =====        =====       =====
           Outstanding at end of year            $4.69        $3.97       $3.27
                                                 =====        =====       =====
           Exercisable at end of year            $4.34        $3.90       $3.27
                                                 =====        =====       =====



                                      F-23

<PAGE>


                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)



NOTE 11. COMMON STOCK (Continued)

     Stock Options (Continued)

         Significant  options  groups  outstanding  at  September  28,  2002 and
         related weighted average price and life information are as follows:

            Grant        Options         Options       Exercise      Remaining
             Date      Outstanding     Exercisable      Price       Life (Years)
             ----      -----------     -----------      -----       ------------
            7/3/99        55,650          55,650        4.50           1.5
            4/2/01        47,750          47,750        4.16           3.5
           4/20/02        25,500              --        6.10           4.5


NOTE 12. NET INCOME PER COMMON SHARE

         The Company  follows  SFAS No.  128,  "Earnings  Per  Share."  SFAS 128
         provides for the  calculation of basic and diluted  earnings per share.
         Basic  earnings  per share  includes  no  dilution  and is  computed by
         dividing  income  available  to  common  stockholders  by the  weighted
         average  number of common shares  outstanding  for the period.  Diluted
         earnings per share assume  exercising  warrants and options granted and
         convertible  preferred stock and debt.  Earnings per share are computed
         by dividing  income  available to common  stockholders by the basic and
         diluted weighted average number of common shares.

<TABLE>
<CAPTION>
                                                                  2002          2001           2000
                                                                  ----          ----           ----
         <S>                                                   <C>            <C>           <C>
         Basic weighted average shares                         1,961,000      1,903,000     1,856,000
         Incremental shares relating to outstanding options
                                                                  28,000         19,000        75,000
                                                               ---------      ---------     ---------
         Diluted weighted average shares                       1,989,000      1,922,000     1,931,000
                                                               =========      =========     =========
</TABLE>


NOTE 13. RELATED PARTY TRANSACTIONS

         The Company's  Chairman and a relative  formed a corporation  to manage
         one of the Company's franchised stores.

         During fiscal 2002, 2001 and 2000,  respectively,  the Company incurred
         legal fees in the form of salary of  approximately  $151,000,  $129,000
         and  $116,000  for  services  provided  by a  member  of the  Board  of
         Directors.

         Also see  Notes 3, 5, 6, 9, 10,  and 11 for  additional  related  party
         transactions.

                                      F-24

<PAGE>


                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)


NOTE 14. BUSINESS SEGMENTS

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

         Information  concerning the revenues and operating income for the years
         ended  September 28, 2002,  September 29, 2001  September 30, 2000, and
         identifiable assets for the two segments in which the Company operates,
         are shown in the  following  table.  Operating  income is total revenue
         less cost of merchandise sold and operating  expenses  relative to each
         segment.  In computing  operating  income,  none of the following items
         have been included:  interest expense,  other non-operating  income and
         expense  and income  taxes.  Identifiable  assets by segment  are those
         assets  that  are used in the  Company's  operations  in each  segment.
         Corporate   assets  are  principally   cash  and  notes  and  mortgages
         receivable.  The Company  does not have any  operations  outside of the
         United States and intersegment transactions are not material.

<TABLE>
<CAPTION>
                                                                                   2002             2001              2000
                                                                                   ----             ----              ----
           <S>                                                                 <C>              <C>              <C>
           Operating Revenues:
              Restaurants                                                      $ 16,436,000     $ 15,478,000     $ 14,344,000
              Equity in the net income of joint ventures                            732,000          571,000          460,000
              Retail package stores                                               9,174,000        8,907,000        8,870,000
              Other revenues                                                      1,955,000        1,748,000        1,486,000
                                                                               ------------     ------------     ------------
                 Total operating revenues                                      $ 28,297,000     $ 26,704,000     $ 25,160,000
                                                                               ============     ============     ============

           Income From Operations Reconciled to Income before Income Taxes:
                 Restaurants                                                   $  2,125,000     $  1,935,000     $  1,761,000
                 Retail package stores                                              304,000          368,000          308,000
                                                                               ------------     ------------     ------------
                                                                                  2,429,000        2,303,000        2,069,000
                 Corporate expenses, net of other revenues                          339,000         (310,000)        (289,000)
                                                                               ------------     ------------     ------------
              Operating Income                                                    2,090,000        1,993,000        1,780,000
              Interest expense, net of interest income                              (84,000)        (100,000)        (123,000)
              Other                                                                  65,000          125,000           48,000
                                                                               ------------     ------------     ------------
           Income Before Income Taxes                                          $  2,071,000     $  2,018,000     $  1,705,000
                                                                               ============     ============     ============

           Identifiable Assets:
              Restaurants                                                      $  4,018,000     $  3,707,000     $  3,969,000
              Retail package store                                                2,085,000        1,943,000        2,066,000
                                                                               ------------     ------------     ------------
                                                                                  6,103,000        5,650,000        6,035,000
              Corporate                                                           7,931,000        8,294,000        7,398,000
                                                                               ------------     ------------     ------------
           Consolidated Totals                                                 $ 14,034,000     $ 13,944,000     $ 13,433,000
                                                                               ============     ============     ============

           Capital Expenditures:
              Restaurants                                                      $    248,000     $    565,000     $    967,000
              Retail package stores                                                  41,000           34,000           67,000
                                                                               ------------     ------------     ------------
                                                                                    289,000          599,000        1,034,000
              Corporate                                                             269,000          492,000          911,000
                                                                               ------------     ------------     ------------
            Total Capital Expenditures                                         $    558,000     $  1,091,000     $  1,945,000
                                                                               ============     ============     ============
</TABLE>

                                      F-25

<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)



NOTE 14. BUSINESS SEGMENTS (Continued)

<TABLE>
<CAPTION>
                                                     2002          2001          2000
                                                     ----          ----          ----
<S>                                                <C>           <C>           <C>
           Depreciation and Amortization:
              Restaurants                          $475,000      $478,000      $438,000
              Retail package stores                  77,000        89,000        97,000
                                                    552,000       567,000       535,000
              Corporate                             165,000       191,000       146,000
                                                    -------       -------       -------
           Total Depreciation and Amortization     $717,000      $758,000      $681,000
                                                   ========      ========      ========
</TABLE>


NOTE 15. QUARTERLY INFORMATION (UNAUDITED)

         The following is a summary of the Company's unaudited quarterly results
         of operations for the quarters in fiscal years 2002 and 2001.

<TABLE>
<CAPTION>
                                                                 Quarter Ended
                                            ---------------------------------------------------------
                                             December 29,    March 30,     June 29,    September 28,
                                                2001           2002          2002         2002
                                                ----           ----          ----         ----

           <S>                               <C>           <C>           <C>           <C>
           Revenues                          $7,142,000    $7,800,000    $6,767,000    $6,588,000
           Income from operations               573,000       804,000       138,000       575,000
           Net income                           448,000       623,000       288,000        24,000*
           Net income per share - basic            0.23          0.32          0.15          0.01
           Net income per share - diluted          0.23          0.31          0.14          0.01
           Weighted average common
              stock outstanding - basic       1,924,865     1,959,869     1,972,843     1,952,916
           Weighted average common
              stock outstanding - diluted     1,930,748     1,997,433     2,013,120     1,980,589
</TABLE>


<TABLE>
<CAPTION>

                                                                 Quarter Ended
                                            --------------------------------------------------------
                                             December 30,    March 31,     June 30,   September 29,
                                                2000           2001          2001         2001

           <S>                               <C>           <C>           <C>           <C>
           Revenues                          $6,655,000    $7,109,000    $6,456,000    $6,484,000
           Income from operations               643,000       787,000       319,000       255,000
           Net income                           436,000       584,000       222,000       287,000
           Net income per share - basic            0.23          0.31          0.12           .15
           Net income per share - diluted          0.23          0.31          0.11           .14
           Weighted average common
              stock outstanding - basic       1,861,314     1,904,500     1,922,478     1,922,478
           Weighted average common
              stock outstanding - diluted     1,875,706     1,914,460     1,939,467     2,050,773

</TABLE>


          *    Net income for the  quarter  includes  decreases  relating to the
               change in accounting  method of $160,000,  $106,000 net of income
               taxes, and a deferred tax adjustment of $169,000.


                                      F-26

<PAGE>



                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)


NOTE 15. QUARTERLY INFORMATION (UNAUDITED) (Continued)

     Quarterly   operating   results  are  not  necessarily   representative  of
     operations  for a full year for  various  reasons  including  the  seasonal
     nature of both the  restaurant  and  package  store  segments.  Each of the
     quarters includes thirteen weeks.






                                      F-27