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

                                   FORM 10KSB

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

For the fiscal year ended September 29,2001
                          -----------------

                                   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 $4,229,000 as of November 20, 2001.

There were 1,922,478 shares of the Registrant's Common Stock ($0.10) Par Value
outstanding as of September 29, 2001.

                       DOCUMENTS INCORPORATED BY REFERENCE

Information contained in the Registrant's 2002 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-KSB.


                         Exhibit Index Begins on Page 34


<PAGE>

                                     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 29, 2001, the Company operated 15
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
                                         YEAR         YEAR           NOTE
                                         2001         2000           NUMBER
TYPES OF UNITS
--------------------------------------------------------------------------------
Combination package and restaurant        4            4
Restaurant only                           7            6          (1)(2)(3)(4)
Package store only                        3            4          (5)(6)(7)
Clubs                                     1            1
--------------------------------------------------------------------------------
TOTAL - Company operated units           15           15

FRANCHISED - units                        7            7          (8)


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.

  (2) During the third quarter of fiscal year 2000, a limited partnership was
formed which 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 is the general
partner and has a 25 percent ownership interest in the

                                      -2-

<PAGE>

partnership. The restaurant opened for business during the first quarter of
fiscal year 2002 and is not included in the table of units.

  (3) During the 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, is located. It is also anticipated that the DOT will take title to
the hotel property during the second quarter of fiscal year 2002, at which time
the restaurant will be forced to close.

  (4) During the fourth quarter of fiscal year 2001, a limited partnership was
formed with the Company as general partner. The limited partnership entered into
a sublease agreement to operate an existing restaurant in Weston, Florida. The
limited partnership plans to raise funds to renovate the business premises for
operation as a "Flanigan's Seafood Bar and Grill" restaurant. The funds will not
be raised, nor will renovations begin until the sublessor has resolved several
zoning and related matters and it is currently impossible to determine when the
renovations will begin. Until additional limited partnership units are sold, the
Company owns 100% of the limited partnership which has been consolidated for
financial reporting purposes. This 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 and is not included in the table of units.

  (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.

  (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 plans to
file its building plans during the second quarter of fiscal year 2002 and
expects the building to be complete and the package liquor store open for
business during the fourth quarter of fiscal year 2002.


                                      -3-
<PAGE>


  (8) 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 9 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.

   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
CIC Investors #95, Ltd.                            Florida


                                      -4-
<PAGE>


   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-KSB.

   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 6 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. See Note 6 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.

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 two fiscal years ended 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.


                                      -5-
<PAGE>

   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.

Franchised Package Liquor Stores and Lounges
--------------------------------------------

   In March 1985, the Company embarked on 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. The franchisee purchased 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. The franchise agreement 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. The Company
suspended its franchise plan at the end of fiscal year 1986.

   As of the end of fiscal year 2001, 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 units that continue to be franchised are doing well
and continue to generate income for the Company.

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



                                      -6-
<PAGE>

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. Each franchisee was 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 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
----------------------------

   During the first quarter of fiscal year 1996, the Company began operating a
restaurant under the "Flanigan's Seafood Bar and Grill" servicemark as general
partner and fifty percent owner of a limited partnership established for such
purpose. The limited partnership agreement gives the limited partnership the
right to use the "Flanigan's Seafood Bar and Grill" servicemark only while the
Company acts as general partner.

   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 the necessary funds were raised 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.

   During the fourth quarter of fiscal year 1997, the Company formed a limited
partnership 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 three 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, the Company formed a limited
partnership which raised funds through a private


                                      -7-
<PAGE>

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, the Company formed a limited
partnership 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 entered into a sublease
agreement for a limited partnership to operate an existing restaurant in Weston,
Florida. The Company, as general partner, has been operating the restaurant
under its existing servicemark. The limited partnership plans to raise funds to
renovate the business premises for operating under the "Flanigan's Seafood Bar
and Grill " servicemark. The Company may also continue to own up to forty
percent of the limited partnership and other related partners, including but not
limited to officers and directors of the Company and their families, may also be
limited partners. 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 its gross sales from the operation of the restaurant while the Company
acts as general partner only. The raising of funds by the limited partnership
and the renovations to the business premises will not begin until the sublessor
resolves various zoning and related matters. Exactly how long it will take for
the sublessor to resolve the zoning and related matters is unknown. In the
interim, the Company will continue operating the restaurant under its existing
servicemark, as a wholly-owned subsidiary.

Clubs
-----

   As of the end of fiscal year 2001, the Company owned one club in Atlanta,
Georgia, which was operated by an unaffiliated third party, as discussed below.


                                      -8-
<PAGE>


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.

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.


                                      -9-
<PAGE>

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.

   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.

    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, where all but one of the total liquor licenses held
by the Company are, 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 are placed upon their transfer, the licenses have
purchase and resale value based upon supply and


                                      -10-
<PAGE>

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.

   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, and September 29, 2001, 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


                                      -11-
<PAGE>

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 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 and again in fiscal year 2001, 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 estimated liability claims 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.

                                      -12-
<PAGE>

   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.

   As previously noted, at September 29, 2001 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.

                                      -13-

<PAGE>

Employees
---------

   As of year end, the Company employed 417 employees, of which 303 were
full-time and 114 were part-time. Of these, 28 were employed at the corporate
offices. Of the remaining employees, 36 were employed in package liquor stores
and 353 in restaurants.

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

                      EXECUTIVE OFFICERS OF THE REGISTRANT

                                                                   Office or
                        Positions and Offices                      Position
      Name              Currently Held                Age          Held Since
      ----              --------------                ---          ----------

Joseph G. Flanigan      Chairman of the Board         72              1959
                        of Directors, Chief
                        Executive Officer and
                        President

William Patton          Vice President                78              1975
                        Community Relations

Edward A. Doxey         Chief Financial Officer       60              1992
                        and Secretary

Jeffrey D. Kastner      Assistant Secretary           48              1995


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

                                      -14-
<PAGE>

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.

   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 2002 which includes expenditures in order to bring the stores into
compliance with ADA. See Item 7, "Liquidity and Capital Resources" for
discussion of the amounts spent in fiscal year 2001.

   The following table summarizes the Company's properties as of September 29,
2001 including franchise locations, a club and Company managed locations.

<TABLE>
<CAPTION>
                                Square                   License          Lease
Name and Location               Footage        Seats     Owned by         Terms
-----------------               -------        -----     --------         -----

<S>                             <C>            <C>       <C>              <C>
Big Daddy's Liquors #4          2,100          N/A       Company          3/1/01 to 2/28/26
Flanigan's Enterprises                                                    and Options to
Inc. (10)                                                                 2/28/36
703 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
</TABLE>

                                      -15-

<PAGE>

<TABLE>
<CAPTION>
                                        Square                   License          Lease
Name and Location                       Footage        Seats     Owned by         Terms
-----------------                       -------        -----     --------         -----
<S>                                     <C>            <C>       <C>              <C>
Flanigan's Legends                      5,000          180       Franchise        11/15/92 to
Seafood Bar and Grill                                                             11/15/02
#12 Galeon Tavern, Inc. (3)                                                       Option to
2401 Tenth Ave. North                                                             11/15/12
Lake Worth, FL

Flanigan's Seafood                      5,000          200       Joint            N/A
Bar & Grill #13                                                  Venture
CIC Investors #13 Ltd.
1549 NW LeJeune Rd
Miami, FL

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

Piranha Pats II-#15                     4.000          90        Joint            3/2/76 to 8/31/01
CIC Investors #15 Ltd.(3)(5)                                     Venture          Options 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 12/31/01
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 12/31/01
                                                                                  Annual options
                                                                                  until the Company
                                                                                  fails to exercise
</TABLE>


                                      -16-

<PAGE>

<TABLE>
<CAPTION>
                                        Square                   License          Lease
Name and Location                       Footage        Seats     Owned By         Terms
-----------------                       -------        -----     --------         -----
<S>                                     <C>            <C>       <C>              <C>
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

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 5/28/02
#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 11/30/02
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
</TABLE>


                                      -17-
<PAGE>

<TABLE>
<CAPTION>
                                        Square                   License          Lease
Name and Location                       Footage        Seats     Owned By         Terms
-----------------                       -------        -----     --------         -----
<S>                                     <C>            <C>       <C>              <C>
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          Option to 3/31/28
CIC Investors #70 Ltd.
12790 SW 88 St
Kendall, FL

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

The Sporting Brews                      5,700          235       Company          7/29/01 to 7/28/16
2460 Weston Road                                                                  Option to 7/28/31
Weston, FL

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

(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 foreclosure. 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.


                                      -18-

<PAGE>

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

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 and again in
fiscal year 2001, 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". The Company's insurance
coverage relating to this type of incident is limited. 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 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


                                      -19-
<PAGE>

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 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 will
receive $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


                                      -20-
<PAGE>


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.

  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 amend 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 the first quarter of fiscal year 2002,
the Company, including three (3) of its franchises, settled all active law suits
alleging ADA violations, although in two (2) such cases, the question of the
plaintiff's attorneys fees and costs are still in dispute. The cost to correct
the ADA violations is included in the budget for capital improvements during
fiscal year 2002.

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

   During the fourth quarter of fiscal year 2001 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 2001              Fiscal 2000
                          -----------              -----------

                         High      Low            High      Low

First quarter            4.38      3.75           6.25      4.25
Second quarter           4.65      3.75           5.63      4.13
Third quarter            5.00      4.06           4.75      3.75
Fourth quarter           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.


                                      -21-
<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.

Item 6.  Management's Discussion and Analysis of Financial Condition and
------------------------------------------------------------------------
Results of Operations.
----------------------

   As of September 29, 2001, the Company was operating fifteen units. The
Company had interests in an additional seven 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 three 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. The
closing of the restaurant resulted in a $22,000 loss to the Company. 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 was being operated by the
Company, under the restaurant's servicemark as of the end of fiscal year 2001,
with the intent to renovate the same for operation 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). Immediately subsequent to the end 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 29, 2001 and September 30, 2000:


                                      -22-
<PAGE>

                                                           Fiscal
                                                         Years Ended
                                                      2001         2000
                                                     ------       ------
                                                        (in thousands)

Net cash provided by operating activities           $ 1,311       $   558

Net cash used in investing activities                  (583)       (1,412)

Net cash used in financing activities                   (71)         (159)
                                                    -------       -------

Net increase (decrease) in cash                         657        (1,013)
and equivalents

Cash and equivalents, beginning of year                 739         1,752
                                                    -------       -------

Cash and equivalents, end of year                   $ 1,396       $   739
                                                    =======       =======

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

   Capital expenditures were $1,091,000 and $1,860,000 during fiscal years 2001
and 2000, respectively. The capital expenditures for both fiscal years were for
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 continued through fiscal year 2001. The budget for
fiscal year 2002 includes approximately $410,000 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
--------------

   In order to ensure that the Company had adequate cash reserves in view of its
investment in joint ventures, and for other improvements, during the second
quarter of fiscal year 1997, the Board of Directors authorized the Company to
borrow up to $1,200,000 at an interest rate of twelve percent (12%) per annum


                                      -23-
<PAGE>


and fully amortized over five (5) years. During the fourth quarter of fiscal
year 1997, the Company borrowed $375,000 from investors, in units of $5,000,
which loan is fully secured with specific receivables owned by the Company. The
outstanding balance as of the end of fiscal year 2001 was $86,000

   The Company closed on its $1,000,000 loan with Bank of America (formerly
Nations Bank) during the second quarter of fiscal year 2000. The promissory note
earns 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 is secured by a security
interest in all assets of the Company, including the office building purchased
by the Company. The promissory note may be paid at any time, in whole or in
part, with any prepayments applying against the quarterly payment or payments of
principal next due. The outstanding balance as of the end of fiscal year 2001
was $680,000.

   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 8.62% 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 receive the fixed interest rate
(6.12%), 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 2001 was $893,000.

   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 $726,000 and $421,000 in fiscal years 2001 and 2000 respectively.

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

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


                                      -24-


<PAGE>


                                     Sept. 29         Sep. 30
Item                                   2001            2000
----                                 --------         ------
Current assets                     $ 4,514,000    $ 3,419,000
Current liabilities                  2,074,000      2,136,000
Working capital                      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
2002.

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 carryforwards to the extent that realization of said benefits
is more likely than not. For discussion regarding the Company's net operating
loss carryforwards refer to Note 7 to the consolidated financial statements for
fiscal year ended September 29, 2001.

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

   As noted above and in Note 6 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. 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%. See Note 6 to the consolidated financial
statements for the current payment schedule of these damages.


                                      -25-

<PAGE>


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.

   During the 2000 fiscal year, the Company received official notification from
the State of Florida, Department of Transportation, ("DOT"), that 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
is located. The suit for eminent domain was filed by DOT and an order of taking
entered during the fourth quarter of fiscal year 2001 which will effective
during the second quarter of fiscal year 2002 when DOT deposits the funds
representing its offer into the Registry of the Court. As of the end of fiscal
year 2001, an agreement had still not been reached by the partners as to the
value of the property taken and if an agreement cannot be reached, the value
will be decided by the court. A dispute has also arisen with the hotel owner
over the limited partnership's right to participate in an award paid by DOT. It
is the Company's position that the limited partnership has possession rights to
the restaurant property, which entitles it to substantial damages. If agreement
is not reached with the hotel owner upon equitable distribution of the
condemnation award, the issue will also be determined by the court. Eminent
domain cases are heard by the court on an expedited basis, moving to the top of
the jury calendar and the issue of the value of the property is scheduled for
jury trial during the second quarter of fiscal year 2002. The issue of an
equitable distribution of the condemnation award between the hotel owner and the
limited partnership will probably be tried at the same time. It is anticipated
that the DOT will take title to the hotel property by the end of the second
quarter of fiscal year 2002, at which time the restaurant will be forced to
close.

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

REVENUES (in thousands):

                             Fifty Two            Fifty Two
                            Weeks Ended          Weeks Ended
Sales                      Sept. 29, 2001       Sept. 30, 2000
-----                      --------------       --------------
Restaurant, food          $ 12,453  51.1%      $ 11,485  49.5%
Restaurant, bar              3,025  12.4%         2,859  12.3%
Package goods                8,907  36.5%         8,870  38.2%
                          ---------------      ---------------
Total                       24,385 100.0%        23,214 100.0%



                                      -26-
<PAGE>


                              Fifty Two           Fifty Two
                             Weeks Ended         Weeks Ended
Sales                       Sept. 29, 2001      Sept. 30, 2000
-----                       --------------      --------------
Franchise revenues               1,249                1,065
Owners fee                         269                  261
Joint venture income               571                  460
Other operating income             230                  160
                              --------             --------
Total Revenues                $ 26,704             $ 25,160



   As the table above illustrates, total revenues have increased for the fiscal
year ended September 29, 2001 when compared to the fiscal year ended 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 $183,000 for the fiscal year ended September 29, 2001 as
compared to the income of $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.

   During the third quarter of fiscal year 2000, the Company, as agent for a
limited partnership to be formed, entered into an agreement for the purchase of
an existing restaurant location in West Miami, Florida, to renovate and operate
under the "Flanigan's Seafood Bar and Grill" servicemark. The Company, as
general partner and twenty five percent owner of the limited partnership, closed
on the purchase of the restaurant location and began renovations during the
fourth quarter of fiscal year 2001. The renovations were completed and the
restaurant opened for business during the first quarter of fiscal year 2002.

   During the fourth quarter of fiscal year 2001, a limited partnership was
formed with the Company as general partner. The limited partnership entered into
a sublease agreement to operate an existing restaurant in Weston, Florida. The
Company immediately began operating the restaurant under its existing
servicemark and the limited partnership plans to raise funds to renovate the
business premises for operation as a "Flanigan's Seafood Bar and Grill"
restaurant. The funds will not be raised, nor will renovations begin, until the
sublessor has resolved


                                      -27-
<PAGE>

several zoning and related matters and it is currently impossible to determine
when renovations will begin.

   Restaurant food sales represented 51.1% of total sales in the fiscal year
ended September 29, 2001 as compared to 49.5% in the fiscal year ended September
30, 2000. The weekly average of same store restaurant food sales was $220,080
and $206,653 for the fiscal year ended September 29, 2001 and the fiscal year
ended September 30, 2000 respectively, an increase of 6.5%.

   Restaurant bar sales represented 12.4% of total sales in the fiscal year
ended September 29, 2001 as compared to 12.3% in the fiscal year ended September
30, 2000. The weekly average of same store restaurant bar sales was $55,936 and
$54,981 for the fiscal year ended September 29, 2001 and the fiscal year ended
September 30, 2000 respectively, an increase of 1.7%.

   Package store sales increased as same store weekly sales averaged $167,524
and $154,203 for the fiscal year ended September 29, 2001 and the fiscal year
ended September 30, 2000 respectively, an increase of 8.6%.

   Franchise revenue increased to $1,249,000 for the fiscal year ended September
29, 2001 as compared to $1,065,000 for the fiscal year ended September 30, 2000.
The increase in franchise revenue resulted from higher sales for the franchises,
and the operation of one of the joint ventures for the entire 2001 fiscal year
as compared with less than one-half of the fiscal year 2000.

   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 $269,000 for the fiscal year ended September 29, 2001
as compared to $261,000 for the fiscal year ended September 30, 2000.

   The gross profit margin for restaurant sales were 62.8% and 63.9% for fiscal
years 2001 and 2000 respectively.

   The gross profit margin for package goods sales were 27.2% and 26.4%, for
fiscal years 2001 and 2000 respectively.

   Overall gross profits were 49.8% and 49.5% for the fiscal years 2001 and 2000
respectively.

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

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


                                      -28-
<PAGE>

   Payroll and related costs which include workers compensation insurance
premiums were $7,446,000 and $6,724,000 for fiscal years 2001 and 2000,
respectively. The 10.7 % increase 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 $1,084,000 and $1,050,000 for fiscal years 2001 and 2000
respectively. The 3.2% increase was attributable to increases in property
maintenance.

   Selling, general and administrative expenses were $3,926,000 for the fiscal
year ended September 29, 2001 and $3,889,000 for the fiscal year ended ___
September 30, 2000. The 1.0% increase in selling, ___ general and administrative
expenses is due to a general increase in prices.

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

   Other income and expense were $14,000 for the fiscal year ended September 29,
2001 as compared with a loss of $75,000 for the fiscal year ended September 30,
2000. The increase in other income is mainly attributable to substantial
increases in rebates from purveyors

   For fiscal year 2001 the Company's interest expense was $187,000 as compared
with $177,000 for the fiscal year ended September 30, 2000.

   The category "Other, net" was $129,000 for the fiscal year ended September
29, 2001 and $44,000 for the fiscal year ended September 30, 2000. Other, net in
the consolidated statements of income consists of the following for the fiscal
years ended September 29, 2001 and September 30, 2000:

                                               Fiscal
                                             Years Ended
                                        --------------------
                                           2001       2000
                                        ========    ========
Non-franchise related rental income     $ 37,000    $ 31,000
Gain on sale of liquor license                 -       8,000
Gain on write-off of capital leases       76,000           -
Gain on sale of assets                    70,000           -
Loss on abandonment of assets            (55,000)          -
Miscellaneous                              1,000       5,000
                                        --------    --------
Other Net                              $ 129,000   $  44,000
                                       =========   =========


                                      -29-
<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
increasing 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 2001 and 2000.
The provision for income taxes was $489,000 for fiscal year ended September 29,
2001 as compared with $341,000 for the fiscal year ended September 30, 2000.

  The Company intends to add additional restaurants and package stores as cash
becomes available.

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

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

   The Company does not believe that inflation has had any material effect
during the past two 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 7. Financial Statements.
-----------------------------

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


                                      -30-
<PAGE>



                                    PART III

Item 8. 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 2002 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
2002 Proxy Statement), is incorporated herein by reference. See also "Executive
Officers of the Registrant" included in Part I hereof.

Item 9. Executive Compensation.
-------------------------------

   The information set forth in the 2002 Proxy Statement under the caption
"Executive Compensation" is incorporated by reference.

Item 10. 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 2002 Proxy Statement is incorporated by
reference.

Item 11. Certain Relationships and Related Transactions.
--------------------------------------------------------

   The information set forth under the caption "Election of Directors - Certain
Relationships and Related Transactions" in the 2002 Proxy Statement is
incorporated by reference.

Item 12. 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 2001 or subsequent to year end.


                                      -31-
<PAGE>


                                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).

(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).


                                      -32-
<PAGE>


(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).

(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.

(13) Registrant's Form 10-KSB constitutes the Annual Report to Shareholders for
the fiscal year ended September 30, 2000.

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


                                      -33-
<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: JOSEPH G. FLANIGAN            Date:  12/13/01
                                -----------------------              --------
                                Chief Executive Officer

   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.


JOSEPH G. FLANIGAN     Chairman of the Board,        Date:  12/13/01
------------------     Chief Executor Officer,              --------
Joseph G. Flanigan     and President

EDWARD A. DOXEY        Chief Financial Officer       Date:  12/13/01
---------------        Secretary and Director               --------
Edward A. Doxey

MICHAEL ROBERTS        Director                      Date:  12/13/01
---------------                                             --------
MICHAEL ROBERTS


GERMAINE M. BELL       Director                      Date:  12/13/01
----------------                                            --------
Germaine M. Bell


CHARLES E. MCMANUS     Director                      Date:  12/13/01
------------------                                          --------
Charles E. McManus


JEFFREY D. KASTNER     Assistant Secretary           Date:  12/13/01
------------------     and Director                         --------
Jeffrey D. Kastner

WILLIAM PATTON         Vice President, Public        Date:  12/13/01
--------------         Relations and Director               --------
William Patton


JAMES G. FLANIGAN      Director                      Date:  12/13/01
-----------------                                           --------
James G. Flanigan

PATRICK J. FLANIGAN    Director                      Date:  12/13/01
-------------------                                         --------
Patrick J. Flanigan


                                      -34-


<PAGE>


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

                        CONSOLIDATED FINANCIAL STATEMENTS

                               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 Sheet                                                       F-2

   Statements of Income                                                F-3

   Statements of Stockholders' Equity                                  F-4

   Statements of Cash Flows                                         F-5 - F-6

   Notes to Financial Statements                                    F-7 - F-24



<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  sheet of  Flanigan's
Enterprises,  Inc. and  Subsidiaries  as of September 29, 2001,  and the related
consolidated  statements of income,  stockholders' equity and cash flows for the
two  years  then  ended.  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  29,  2001,  and  the
consolidated  results of their operations and their cash flows for the two years
then ended in conformity with accounting  principles  generally  accepted in the
United States.


                            RACHLIN COHEN & HOLTZ LLP


Fort Lauderdale, Florida
November 21, 2001

                                       F-1
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET

                               SEPTEMBER 29, 2001

<TABLE>
<CAPTION>

                                     ASSETS
                                     ------
<S>                                                                <C>
Current Assets:
    Cash and cash equivalents                                      $  1,396,000
    Notes and mortgages receivable, current maturities, net             120,000
    Due from franchisees                                                683,000
    Other receivables                                                   311,000
    Inventories                                                       1,337,000
    Prepaid expenses                                                    349,000
    Deferred tax assets                                                 318,000
                                                                   ------------
       Total current assets                                           4,514,000
                                                                   ------------

Property and Equipment                                                5,650,000
                                                                   ------------

Investments in Joint Ventures                                         1,684,000
                                                                   ------------

Other Assets:
    Liquor licenses, net                                                266,000
    Notes and mortgages receivable, net                                  71,000
    Deferred tax assets                                                 338,000
    Other                                                               234,000
                                                                   ------------
          Total other assets                                            909,000
                                                                   ------------
          Total assets                                             $ 12,757,000
                                                                   ============
</TABLE>


                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      ------------------------------------
Current Liabilities:
    Accounts payable and accrued expenses                          $  1,564,000
    Due to franchisees                                                  131,000
    Current portion of long-term debt                                   262,000
    Damages payable on terminated or rejected leases                    117,000
                                                                   ------------
          Total current liabilities                                   2,074,000
                                                                   ------------

Long-Term Debt, Net of Current Maturities                             1,715,000
                                                                   ------------

Commitments, Contingencies, Other Matters and Subsequent Event             --

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

                                       F-2

<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                        CONSOLIDATED STATEMENTS OF INCOME

              YEARS ENDED SEPTEMBER 29, 2001 AND SEPTEMBER 30, 2000

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

Income from Operations                                            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         (141,000)         (131,000)
    Interest income                                                  68,000            54,000
    Recognition of deferred gains                                     4,000             4,000
    Other                                                           129,000            44,000
                                                               ------------      ------------
                                                                     14,000           (75,000)
                                                               ------------      ------------

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

Provision (Credit) for Income Taxes:
    Current                                                         483,000           373,000
    Deferred                                                          6,000           (32,000)
                                                               ------------      ------------
                                                                    489,000           341,000
                                                               ------------      ------------

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

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

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


                                      F-3
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

              YEARS ENDED SEPTEMBER 29, 2001 AND SEPTEMBER 30, 2000


<TABLE>
<CAPTION>
                                                                                                                         Notes
                                                                   Common Stock                                        Receivable
                                                                   ------------           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)
                                                             ===========    =========    ===========    ===========    =========
</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
                                                           ===========    ===========    ===========
</TABLE>


                                      F-4

<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

              YEARS ENDED SEPTEMBER 29, 2001 AND SEPTEMBER 30, 2000

<TABLE>
<CAPTION>
                                                                             2001             2000
                                                                             ----             ----
<S>                                                                      <C>              <C>
Cash Flows from Operating Activities:
    Net income                                                           $ 1,529,000      $ 1,364,000
    Adjustments to reconcile net income to net cash provided by
      operating activities:
        Depreciation and amortization                                        758,000          681,000
        Deferred income taxes                                                  6,000          (32,000)
        Recognition of deferred gains and other deferred income               (4,000)          (4,000)
        Gain on disposal of property, equipment and liquor licenses          (21,000)          (8,000)
        Joint venture income                                                (571,000)        (460,000)
        Changes in operating assets and liabilities:
          (Increase) decrease in:
             Due from franchisees                                           (433,000)        (139,000)
             Other receivables                                               (47,000)        (144,000)
             Inventories                                                      45,000           46,000
             Prepaid expenses                                                (31,000)          84,000
             Other assets                                                    (37,000)          (4,000)
          Increase (decrease) in:
             Accounts payable and accrued expenses                           500,000          (80,000)
             Due to franchisees                                               67,000         (746,000)
                                                                         -----------      -----------
               Net cash provided by operating activities                   1,311,000          558,000
                                                                         -----------      -----------

Cash Flows from Investing Activities:
    Collections on notes and mortgages receivable                             79,000           36,000
    Purchase of property and equipment                                    (1,091,000)      (1,860,000)
    Distributions from joint ventures                                        640,000          401,000
    Collections on notes receivable, sale of common stock                     12,000           11,000
    Investment in limited partnership                                       (223,000)            --
                                                                         -----------      -----------
               Net cash used in investing activities                        (583,000)      (1,412,000)
                                                                         -----------      -----------

Cash Flows from Financing Activities:
    Borrowings of long-term debt                                             895,000          950,000
    Payments of long-term debt                                              (373,000)         (79,000)
    Payments of obligations under capital leases                             (70,000)         (70,000)
    Payments of damages payable on terminated or rejected leases            (283,000)        (272,000)
    Purchase of treasury stock                                               (18,000)        (492,000)
    Dividends paid                                                          (231,000)        (215,000)
    Proceeds from exercise of stock options                                    9,000           19,000
                                                                         -----------      -----------
               Net cash used in financing activities                         (71,000)        (159,000)
                                                                         -----------      -----------

Net Increase (Decrease) in Cash and Cash Equivalents                         657,000       (1,013,000)

Cash and Cash Equivalents, Beginning                                         739,000        1,752,000
                                                                         -----------      -----------

Cash and Cash Equivalents, Ending                                        $ 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 29, 2001 AND SEPTEMBER 30, 2000
                                   (Continued)

<TABLE>
<CAPTION>
                                                                    2001         2000
                                                                    ----         ----
<S>                                                              <C>           <C>
Supplemental Disclosure of Cash Flow Information:
    Cash paid during the year for:
      Interest                                                   $ 181,000     $177,000
                                                                 =========     ========
      Income taxes                                               $ 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               $    --       $ 35,000
                                                                 =========     ========
</TABLE>


                                      F-6

<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                    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 29, 2001, the Company owned and/or
     operated seven  full-service  restaurants,  three 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 five of the eleven  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 cost (first in, first out) or market.


                                      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 29, 2001.  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 29,
     2001,  the Company had  deposits in excess of federally  insured  limits of
     approximately $1,390,000.  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

     In  the  fourth  quarter  of  fiscal  2001  the  Company  entered  into  an
     understanding  with a major  supplier,  which  entitles  the  Company is to
     receive certain purchase discounts and advertising allowances.  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 29, 2001 and September 30, 2000 were $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.

Recently Issued Accounting Pronouncements

     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.

                                      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 (Continued)

     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. The
     Company  does not  believe  that the  adoption  of SFAS No. 141 will have a
     material effect on the Company's consolidated financial statements.

     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,

                                      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)

     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  29, 2001, a hedging
     relationship existed for the mortgage obligation described in Note 8.

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.

                                      F-11
<PAGE>


                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Continued)

NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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.


NOTE 2.  NOTES AND MORTGAGES RECEIVABLES

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

<TABLE>
<CAPTION>
<S>                                                                                  <C>
     Notes and mortgages receivable from unrelated parties, bearing interest at
        rates ranging from 9% to 15% and due in varying installments through
        2004                                                                          $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                                                                           150,000
                                                                                     ---------
                                                                                       271,000
     Less deferred gains                                                                80,000
                                                                                     ---------
                                                                                       191,000
     Amount representing current portion                                               120,000
                                                                                     ---------
                                                                                     $  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.  During fiscal 2001 and 2000,  approximately  $4,000 of deferred
     gains were recognized on collections of such notes receivable.

                                      F-12
<PAGE>


                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Continued)

NOTE 2.  NOTES AND MORTGAGES RECEIVABLES (Continued)

     Future scheduled  payments on the receivables at September 29, 2001 consist
     of the following:

     2002                                                   $120,000
     2003                                                      7,000
     2004                                                     53,000
     2005                                                      9,000
     2006                                                     11,000
     2007                                                     71,000
                                                            --------
                                                            $271,000
                                                            ========


NOTE 3.  PROPERTY AND EQUIPMENT

     Furniture and equipment                                $  6,287,000
     Leasehold interests and improvements                      5,256,000
     Land and land improvements                                1,007,000
     Building and improvements                                 1,208,000
     Vehicles                                                    186,000
                                                            ------------
                                                              13,944,000
     Less accumulated depreciation and amortization            8,294,000
                                                            ------------
                                                            $  5,650,000
                                                            ============


NOTE 4.  INVESTMENTS IN JOINT VENTURES

Miami, Florida

     The Company  operates 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.

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.

                                      F-13
<PAGE>


                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Continued)

NOTE 4.  INVESTMENTS IN JOINT VENTURES (Continued)

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.

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  subsequent to September  29, 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.

Summary

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

                                                         2001             2000
                                                         ----             ----
     Financial Position:
      Current assets                                  $  632,000      $  403,000
      Non-current assets                               6,120,000       4,590,000
      Current liabilities                                679,000         588,000
      Non-current liabilities                            489,000         538,000

     Operating Results:
      Revenues                                        12,429,000      10,208,000
      Gross profit                                     7,866,000       6,480,000
      Net income                                       1,258,000       1,192,000


                                      F-14
<PAGE>


                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Continued)

NOTE 5.  ACCOUNTS PAYABLE AND ACCRUED EXPENSES

     Accounts payable                                                 $1,664,000
     Lease security deposit                                              200,000
     Salaries and wages                                                  130,000
     Property taxes                                                      128,000
     Potential uninsured claims                                           91,000
     Franchisee advance funds                                             14,000
     Other                                                                87,000
                                                                      ----------
                                                                      $2,314,000
                                                                      ==========

     Franchisee  advance funds  represent cash advances by the  franchisees  for
     inventory purchases to be made as part of the Company-sponsored cooperative
     buying program.

NOTE 6.  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  is  approximately   $117,000.   All  damages  payable  on
     terminated and rejected leases mature in fiscal year ending 2002.


                                      F-15
<PAGE>


                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Continued)

NOTE 7.  INCOME TAXES

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

                                                            2001         2000
                                                            ----         ----
     Current:
        Federal                                           $366,000     $284,000
        State                                              117,000       89,000
                                                         ---------     --------
                                                           483,000      373,000
                                                         ---------     --------
     Deferred:
        Federal                                              6,000      (31,000)
        State                                                   --       (1,000)
                                                          --------     --------
                                                             6,000      (32,000)
                                                          --------     --------
                                                          $489,000     $341,000
                                                          ========     ========

     A  reconciliation  of income tax computed at the statutory  federal rate to
     income tax expense (benefit) is as follows:
                                                          2001          2000
                                                          ----          ----
     Tax provision at the statutory rate of 34%         $686,000     $ 580,000
     State income taxes, net of federal income tax        61,000        51,000
     Net operating loss utilization                           --       (41,000)
     Tip credit utilization                             (256,000)     (199,000)
     Other                                                (2,000)      (50,000)
                                                        --------     ---------
                                                        $489,000     $ 341,000
                                                        ========     =========

     At September 29, 2001,  the Company has available tip credit  carryforwards
     of  approximately  $213,000,  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,  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.

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

     Current:
        Tip credit carryforward                                         $213,000
        Alternative minimum tax credit                                    74,000
        Accruals for potential uninsured claims                           31,000
                                                                        --------
                                                                        $318,000
                                                                        ========
     Long-Term:
        Book/tax differences in property and equipment                  $327,000
        Joint venture investments                                         11,000
                                                                        --------
                                                                        $338,000
                                                                        ========



                                      F-16
<PAGE>



                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Continued)

NOTE 8.  LONG-TERM DEBT
<TABLE>
<CAPTION>

     <S>                                                                                 <C>
     Mortgage payable to bank; secured by first mortgage on a building;  payable
     $1,463 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,  under which the Company
     pays a fixed rate of interest of 8.62%.  The interest  rate swap  agreement
     hedges the interest rate risk of the mortgage payable.                                $893,000

     Note payable to bank,  secured by general  assets of the  Company;  bearing
     interest  at 6%  payable  in  monthly  installments;  principal  is  due in
     quarterly  installments  of  $50,000  for 8  quarters  then  $75,000  for 8
     quarters, maturing in April 2004                                                       680,000

     Mortgage  payable,  secured by land,  bearing  interest  at 8%;  payable in
     monthly  installments  of principal  and  interest,  maturing in April 2007            325,000

     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
                                                                                         ----------
                                                                                          1,977,000
     Less current portion                                                                   262,000
                                                                                         ----------
                                                                                         $1,715,000
                                                                                         ==========

     Long-term debt at September 29, 2001 matures as follows:

     2002                                                                                $  262,000
     2003                                                                                   329,000
     2004                                                                                   255,000
     2005                                                                                    31,000
     2006                                                                                    33,000
     Thereafter                                                                           1,067,000
                                                                                         ----------
                                                                                         $1,977,000
                                                                                         ==========
</TABLE>

NOTE 9.  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.

                                      F-17
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Continued)

NOTE 9.  COMMITMENTS, CONTINGENCIES AND OTHER MATTERS

Legal Matters (Continued)

     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 Company has  retained an ADA expert,  who is in the
     process of inspecting all locations, including the limited partnerships and
     franchises,  and will provide a report setting forth ADA  violations  which
     need  to be  corrected.  It is the  Company's  intent  to  correct  all ADA
     violations noted by its ADA expert and then vigorously  defend the lawsuits
     arguing that all locations are in compliance. The Company estimates it will
     cost  approximately  $10,000  per  location  to bring  the  locations  into
     compliance.

Leases

     The Company  leases a substantial  portion of the land and building used in
     its operations  under leases with initial terms  expiring  between 2001 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  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.  The  lease  is  subject  to
     cancellation  if the sublessor  fails to resolve several zoning and related
     matters.  Upon  resolution of these  matters,  the Company has committed to
     renovate the restaurant for total cost of approximately $750,000.

     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  plans to file its  building  plans  during the  second  quarter of
     fiscal year 2002 and expects  the  building to be complete  and the package
     liquor  store open for  business  during the fourth  quarter of fiscal year
     2002.  The  estimated  construction  cost of this building has not yet been
     determined.

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

     2002                                  $1,193,000
     2003                                   1,075,000
     2004                                   1,034,000
     2005                                     922,000
     2006                                     606,000
     Thereafter                             4,292,000
                                           ----------
        Total                              $9,122,000
                                           ==========

                                      F-18
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Continued)

NOTE 9.  COMMITMENTS, CONTINGENCIES AND OTHER MATTERS (Continued)

Leases (Continued)

     Total  rent  expense  for all  operating  leases  (including  those with an
     initial term of less than one year and net of  subleases)  was $758,000 and
     $703,000 in 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 $2,967,000.

Franchise Programs

     At September 29, 2001,  the Company  operated  seven units under  franchise
     agreements  and five  units  under  joint  venture  agreements.  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  due  to's and  from's  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.  Of the  seven  franchised  stores,  five are owned or  operated  by
     related  parties.  The Company is not  currently  offering or accepting new
     franchises.

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.  Bonuses for fiscal  years 2001 and 2000
     amounted to approximately $228,000 and $150,000, respectively. In addition,
     the agreement  provides 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 expires January 8, 2002.

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.


                                      F-19
<PAGE>




                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Continued)

NOTE 9.  COMMITMENTS, CONTINGENCIES AND OTHER MATTERS (Continued)

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, contains 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,  is located. It is anticipated that the DOT will take title to
     the hotel property  during the second quarter of fiscal year 2002, at which
     time the restaurant will be forced to close.


NOTE 10. COMMON STOCK

Treasury Stock

   Purchase of Common Shares

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

   Sale of Common Shares

     During 2001, the Company sold an aggregate of 70,000 shares of common stock
     pursuant  to the  exercise  of options to certain  employee/officers  for a
     total of approximately $131,000.  These  employee/officers  purchased their
     shares,  in part, by means of notes of  approximately  $122,000,  which are
     non-interest bearing and are due on demand. The notes are non-recourse, and
     are secured by the shares owned by the employee/officers. Effective October
     1, 2001, the notes become interest bearing at 5%.

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.

                                      F-20
<PAGE>




                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Continued)

NOTE 10. COMMON STOCK (Continued)

Key Employee Incentive Stock Option Plan (Continued)

     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 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.

     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.

     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:

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

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

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

     Risk Free Interest Rate                                               6%
     Expected Dividend Yield                                              $.11
     Expected Option Life                                                5 Years
     Expected Stock Price Volatility                                       75%

                                      F-21
<PAGE>




                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Continued)

NOTE 10. COMMON STOCK (Continued)

Stock Options (Continued)

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

                                                           2001         2000
                                                           ----         ----

     Outstanding at beginning of year                     233,045      276,295
     Options granted                                       57,800           --
     Options exercised                                    (70,000)     (12,000)
     Options expired                                      (13,250)     (31,250)
                                                          -------      -------
     Outstanding at end of year                           207,595      233,045
                                                          -------      -------
     Exercisable at end of year                           149,795      233,045
                                                          -------      -------

     Weighted  average option  exercise price  information for fiscal years 2001
     and 2000 is as follows:
                                                               2001       2000
                                                               ----       ----

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

     Significant  options  groups  outstanding at September 29, 2001 and related
     weighted average price and life information are as follows:

      Grant       Options        Options     Exercise     Remaining
       Date     Outstanding    Exercisable    Price     Life (Years)
       ----     -----------    -----------    -----     ------------

     1/08/97        72,395         72,395       3.25        .25
      7/3/99        77,400         77,400       4.50       2.5
      4/2/01        57,800              -       4.16       4.5


NOTE 11. 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>

                                                                2001             2000
                                                                ----             ----
<S>                                                         <C>               <C>
     Basic weighted average shares                          $1,903,000        1,856,000
     Incremental shares relating to outstanding options         19,000           75,000
                                                            ----------        ---------
     Diluted weighted average shares                        $1,922,000        1,931,000
                                                            ==========        =========

</TABLE>

                                      F-22
<PAGE>


                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Continued)

NOTE 12. RELATED PARTY TRANSACTIONS

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

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

     Also  see  Notes  2,  4,  5,  8, 9,  and 10 for  additional  related  party
     transactions.


NOTE 13. 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 29, 2001 and 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>

                                                                   2001            2000
                                                                   ----            ----
     Operating Revenues:
<S>                                                             <C>             <C>
        Restaurants                                             $15,478,000     $14,344,000
        Equity in the net income of restaurant investees            571,000         460,000
        Retail package stores                                     8,907,000       8,870,000
        Other revenues                                            1,748,000       1,486,000
                                                                -----------     -----------
           Total operating revenues                             $26,704,000     $25,160,000
                                                                ===========     ===========

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

</TABLE>

                                      F-23
<PAGE>




                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Continued)

NOTE 13. BUSINESS SEGMENTS (Continued)

                                                     2001            2000
                                                     ----            ----
     Identifiable Assets:
        Restaurants                              $ 3,707,000    $  3,969,000
        Retail package store                       1,943,000       2,066,000
                                                 -----------     -----------
                                                   5,650,000       6,035,000
        Corporate                                  8,294,000       7,398,000
                                                 -----------     -----------
     Consolidated Totals                         $13,944,000     $13,433,000
                                                 ===========     ===========

     Capital Expenditures:
        Restaurants                              $   565,000     $   967,000
        Retail package stores                         34,000          67,000
                                                 -----------      ----------
                                                     599,000       1,034,000
        Corporate                                    492,000         826,000
                                                 -----------      ----------
     Total Capital Expenditures                  $ 1,091,000      $1,860,000
                                                 ===========      ==========

                                                      2001            2000
                                                      ----            ----
     Depreciation and Amortization:
        Restaurants                                 $478,000        $438,000
        Retail package stores                         89,000          97,000
                                                    --------        --------
                                                     567,000         535,000
        Corporate                                    191,000         146,000
                                                    --------        --------
     Total Depreciation and Amortization            $758,000        $681,000
                                                    ========        ========

                                      F-24