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

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

                   For the fiscal year ended October 1, 2005

                                       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 if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. Yes [ ] No [X]

Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X]

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

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Registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [_]

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation S-K (ss.229.405 of this chapter) is not contained herein, and will
not be contained,  to the best of registrant's knowledge, in definitive proxy or
information  statements  incorporated by reference in Part III of this Form 10-K
or any amendment to this form 10-K. [_]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act. Yes [_] No [X]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act.) Yes [_] No [X]

The  aggregate  market value of the voting stock held by  non-affiliates  of the
registrant  was  $8,020,810  as of April 1, 2005,  the last  business day of the
registrant's most recently  completed second fiscal quarter,  at a closing price
of $7.98 per share on that day.

There were 1,879,835  shares of the  Registrant's  Common Stock $0.10 par value,
outstanding as of January 17, 2006

                       DOCUMENTS INCORPORATED BY REFERENCE

Information contained in the Registrant's 2006 definitive proxy material has
been  incorporated  by  reference  in Items 10, 11, 12, 13 and 14 of Part III of
this`Annual Report on Form 10-K.

                        Exhibit Index Begins on Page 41

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

         When  used  in  this  report,   the  words   "anticipate",   "believe",
"estimate",   "will",  "intend",   "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 October 1, 2005, the Company  operated 19
units, and had equity interests in seven additional units which have been

                                       2
<PAGE>

franchised  by the Company.  The table below  summarizes  the type and number of
units being operated during each of the last three fiscal years.

                         FISCAL  FISCAL  FISCAL
                         YEAR    YEAR    YEAR    NOTE
                         2005    2004    2003    NUMBER
TYPES OF UNITS
-------------------------------------------------------------------
Company Owned:
Combination package
  and restaurant          4       4       4
Restaurant only           2       2       2
Package store only        5       5       4      (1)

Company Managed
 Restaurants Only:
  Limited partnerships    6       5       4      (2)(3)
  Franchise               1       1       1

Company Owned Club:       1       1       1
-------------------------------------------------------------------
TOTAL - Company
  Owned/Operated Units:  19      18      16

FRANCHISED - units        7       7       7      (4)
                         --      --      --

Notes:

         (1) The corporate  offices  consist of a two (2) story  building,  with
space  initially set aside on the ground floor for a package  liquor store.  The
Company  filed suit  against  the  adjacent  shopping  center to  determine  the
Company's right to non-exclusive  parking in the shopping center.  During fiscal
year 2005, summary judgment was granted in favor of the adjacent shopping center
denying the Company non-exclusive parking rights in the shopping center, but the
Company is pursuing its claim against the seller,  its  individual  partners and
its attorney  for damages for failing to disclose  documents  pertaining  to the
release of the  non-exclusive  parking  rights.  The case is scheduled for trial
during the third quarter of fiscal year 2006. The Company no longer plans to use
the ground floor for a package  liquor store.  This package  liquor store is not
included in the table of units.

         (2) During the third  quarter of fiscal  year  2003,  the  Company,  as
general  partner of the  limited  partnership,  entered  into a Sale of Business
Agreement for the purchase of an existing business in Pinecrest,  Florida, which
transaction closed during the first quarter of fiscal year 2004. The Company, as
general  partner  of the  limited  partnership,  is  proceeding  with  necessary
structural  repairs,  while  preserving  its right to pursue a claim against the
landlord  for  its  contribution  to  the  additional   structural  repairs  and
reimbursement  of rent  paid  while  the  processing  of its  building  plans is
delayed. The structural repairs should be completed during the second quarter of
fiscal year 2006, after which it is anticipated  that the limited  partnership's
building plans will be processed by Pinecrest,  Florida, building permits issued
and the renovations  made to the business  premises.  It is anticipated that the
renovated restaurant will be open for business

                                       3
<PAGE>

during the third quarter of fiscal year 2006 and is not included in the table of
units.

         (3)  During  the  fourth   quarter  of  fiscal  year  2004,  a  limited
partnership  was  formed  with the  Company  as  general  partner.  The  limited
partnership  entered into a lease  agreement to own and operate a restaurant  in
Wellington,  Florida under the "Flanigan's  Seafood Bar and Grill" service mark.
During the first  quarter of fiscal year 2005,  the limited  partnership  raised
funds through a private offering to renovate the business premises for operation
as a "Flanigan's Seafood Bar and Grill" restaurant.  The Company acts as general
partner  and  owns a  twenty  six  percent  limited  partnership  interest.  The
restaurant opened for business on May 27, 2005.

         (4) The Company  manages the  restaurant  for one (1)  franchisee  with
respect to one (1) of the seven (7) franchised units. The franchised  restaurant
is  included in the table of units as a  restaurant  operated by the Company and
the franchise is also included as a unit  franchised by the Company and in which
the Company has an interest.

         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 81.5% 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
limited partnerships and wholly owned subsidiaries. The limited partnerships

                                       4
<PAGE>

and operating subsidiaries are as follows:

                                                       STATE OF       PERCENTAGE
               ENTITY                                ORGANIZATION       OWNED
               ------                                ------------       -----

Flanigan's Management Services, Inc.                   Florida           100
Flanigan's Enterprises, Inc. of Georgia                Georgia           100
Seventh Street Corp.                                   Florida           100
Flanigan's Enterprises, Inc. of Pa.                  Pennsylvania        100
CIC Investors #13, Limited Partnership                 Florida           100
CIC Investors #60, Limited Partnership                 Florida            42
CIC Investors #65, Limited Partnership                 Florida            26
CIC Investors #70, Limited Partnership                 Florida            40
CIC Investors #75, Limited Partnership                 Florida            12
CIC Investors #80, Limited Partnership                 Florida            25
CIC Investors #95, Limited Partnership                 Florida            28

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

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


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

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

         Financial information broken into these two principal industry segments
for the three fiscal years ended October 1, 2005,  October 2, 2004 and September
27,  2003 is set  forth  in the  consolidated  financial  statements  which  are
attached hereto, and incorporated herein by reference.

                                       5
<PAGE>

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

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

         The  Company's  restaurants  offer  full  food and  alcoholic  beverage
service  with  approximately  81.5% 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 Restaurants
------------------------------------------------

         In March 1985,  the  Company's  Board of  Directors  approved a plan to
sell, on a franchise basis, up to 26 of the Company's  package liquor stores and
lounges in the South  Florida  area.  The Company  had  limited  response to its
franchise  offering and suspended  its franchise  plan at the end of fiscal year
1986.  Many of the units that were  originally  offered as franchises  have been
sold outright and are no longer operated as Flanigan's or Big Daddy's stores. As
of the end of fiscal year 2005, seven units were franchised, of which five units
were  franchised  to  members  of the  family of the  Chairman  of the Board and
Officers and Directors of the Company.

         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  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  operation.  A franchisee is required to execute a new
franchise  agreement  for the balance of the term of its lease for the  business
premises,  extended by the  franchisee's  continued  occupancy  of the  business
premises thereafter,  whether by lease or ownership. The new

                                       6
<PAGE>

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

         The units that continue to be franchised are doing well and continue to
generate income for the Company.


Investment in Limited Partnerships
----------------------------------

         The Company  has  determined  that all but one (1) limited  partnership
discussed  below should be  consolidated  for  accounting  purposes by virtue of
control of the  limited  partnerships  by the  Company.  The  remaining  limited
partnership  in which the Company does not have control has been  accounted  for
utilizing the equity method.

         Beginning  with the limited  partnership  which owns the  restaurant in
Surfside, Florida and for all limited partnerships formed subsequent thereto for
the purpose of owning and operating a restaurant  under the "Flanigan's  Seafood
Bar and Grill"  servicemark,  a standard financial  arrangement has been used in
each limited partnership agreement. Under this financial arrangement,  until the
limited  partnership  has  received  an  aggregate  sum  equal  to  the  initial
investment of all limited partners from the net profit from the operation of the
restaurant,  the limited  partnership  receives an aggregate sum equal to 25% of
the  initial  investment  of all  limited  partners  first each  year,  with any
additional net profit  divided  equally  between the Company,  as manager of the
restaurant,  and the  limited  partnership.  Once the  limited  partnership  has
received  an  aggregate  sum  equal to the  initial  investment  of all  limited
partners  from the net profit  from the  operation  of the  restaurant,  the net
profit is divided equally between the Company, as manager of the restaurant, and
the limited  partnership.  As of October 1, 2005,  only the limited  partnership
which owns the  restaurant  in Kendall,  Florida has received an  aggregate  sum
equal to the initial investment of all limited partners from the net profit from
the operation of the restaurant and the Company  receives  one-half (1/2) of the
net profit as manager of the restaurant.  The Company plans to continue  forming
limited  partnerships  to raise funds to own and operate  restaurants  under the
"Flanigan's  Seafood  Bar  and  Grill"  servicemark  using  the  same  financial
arrangement.

         Each  limited  partnership   agreement,   excluding  only  the  limited
partnership agreement for the franchised restaurant in Fort Lauderdale,  Florida
which is governed by a franchise  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, while the Company
acts as general partner only.

Miami, Florida

         As of September 28, 2002, the Company, plus a wholly-owned  subsidiary,
owns one  hundred  (100%)  percent of the limited  partnership,  which owned and
operated the "Flanigan's Seafood Bar and Grill" restaurant in Miami, Florida. At
the end of the second quarter of fiscal year 2002, the hotel property upon

                                       7
<PAGE>

which the  restaurant  was located was "taken"  through  eminent  domain and the
restaurant closed.

         During the third quarter of fiscal year 2003,  the Company,  as general
partner of the limited  partnership,  entered into a Sale of Business  Agreement
for  the  purchase  of  an  existing  business  in  Pinecrest,   Florida,  which
transaction  closed during the first  quarter of fiscal year 2004.  The purchase
price of  approximately  $340,000  related to the  acquisition of a below market
lease and will  therefore be  recognized  as  additional  lease expense over the
remaining life of the lease once operation of the  restaurant  commences.  As of
October 1, 2005, the $340,000 is included in the  accompanying  balance sheet in
other assets. The Company agreed to  unconditionally  guaranty the lease for the
business  premises  in order to  procure  the  consent  of the  landlord  to the
assignment of the lease. During the second quarter of fiscal year 2004 and after
removing the interior  finishes in anticipation of completing its building plans
for the  renovation  of the  building  premises,  the  Company  found  numerous,
substantial  structural  deficiencies  which needed to be rectified prior to any
renovations being made.

         During the third quarter of fiscal year 2004,  the Company,  as general
partner of the limited partnership,  and the landlord agreed upon the structural
repairs  required,  as set  forth by the  landlord's  engineering  firm,  and to
equally  share  the  cost  thereof  in order to  minimize  further  delay to the
renovation of the business premises.  During fourth quarter of fiscal year 2004,
the structural repairs were made by the landlord's  contractor.  Upon submitting
its building plans to Pinecrest, Florida for review and the issuance of building
plans, the Company was advised that there were structural  problems that had not
been addressed and other structural  problems that were not adequately  repaired
and that its building plans would not be reviewed until the structural  problems
were rectified.  The Company, as general partner of the limited partnership,  is
proceeding with the necessary structural repairs,  while preserving its right to
pursue a claim  against the  landlord  for its  contribution  to any  additional
structural  repairs and  reimbursement  of rent paid while the processing of its
building  plans is  delayed.  During  the fourth  quarter  of fiscal  year 2005,
building  permits were issued to the limited  partnership to make the structural
repairs,  which structural repairs should be completed during the second quarter
of  fiscal  year  2006.  After  the  structural  repairs  are  completed,  it is
anticipated that the limited  partnership's  building plans will be processed by
Pinecrest,  Florida,  building  permits issued and the  renovations  made to the
business premises.  The limited partnership still intends to raise funds through
a private  offering to renovate the restaurant  once the  renovation  costs have
been  determined.  During  fiscal  year 2005,  the Company  advanced  the sum of
$525,000  to the limited  partnership,  the use of which  included,  but was not
limited  to,   architectural  and  engineering  fees  and  its  contribution  to
structural  repairs  made during the fiscal  year.  As of the end of fiscal year
2005, the Company had advanced the sum of $1,324,000 to the limited  partnership
for such uses and to close on the purchase of the existing business. The Company
continues  to act as general  partner and will also be the owner of up to thirty
three and one-third percent limited partnership interest. It is anticipated that
the renovated  restaurant  will be open for business during the third quarter of
fiscal year 2006.

                                       8
<PAGE>

Fort Lauderdale, Florida

         A related third party acts as general partner of a limited  partnership
which owns and  operates a franchised  restaurant  in Fort  Lauderdale,  Florida
under the  "Flanigan's  Seafood Bar and Grill"  service  mark.  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.  This joint  venture is not  consolidated  in the  accompanying
consolidated financial statements of the Company.

Surfside, Florida

         The Company acts as general partner of a limited partnership which owns
and operates a restaurant in Surfside, Florida under the "Flanigan's Seafood Bar
and Grill"  service  mark.  The Company is also a forty two 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. This restaurant opened
for business in the second  quarter of fiscal year 1998. As of the end of fiscal
year 2005, this limited partnership had received an aggregate sum equal to 94.7%
of the initial  investment of all limited  partners from the net profit from the
operation of the restaurant.

Kendall, Florida

         The Company acts as general partner of a limited partnership which owns
and operates a restaurant in Kendall,  Florida under the "Flanigan's Seafood Bar
and  Grill"  service  mark.  The  Company is also a forty  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. This restaurant opened
for  business  on April 9,  2000.  This  limited  partnership  has  received  an
aggregate sum equal to the initial  investment of all limited  partners from the
net profit from the operation of the restaurant.

West Miami, Florida

         The Company acts as general partner of a limited partnership which owns
and operates a restaurant in West Miami,  Florida under the "Flanigan's  Seafood
Bar and Grill"  service mark. The Company is also 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.  This  restaurant
opened for business on October 11, 2001. As of the end of fiscal year 2005, this
limited partnership had received an aggregate sum equal to 97.23% of the initial
investment of all limited partners from the net profit from the operation of the
restaurant.

Weston, Florida

         The Company  acts as general  partner of a limited  partnership,  which
owns and operates a restaurant in Weston,  Florida under the "Flanigan's Seafood
Bar and Grill"  service  mark.  The  Company  is also the owner of twenty  eight
percent of the limited partnership,  as are other related parties, including but
not limited to officers  and  directors of the Company and their  families.  The
restaurant  opened  for  business,  as a  "Flanigan's  Seafood  Bar  and  Grill"
restaurant on January 20, 2003. As of the end of fiscal year

                                       9
<PAGE>

2005, this limited partnership had received an aggregate sum equal to 45% of the
initial  investment  of all  limited  partners  from  the net  profit  from  the
operation of the restaurant.

Stuart, Florida

         The Company  acts as general  partner of a limited  partnership,  which
owns and operates a restaurant in a Howard  Johnson's  Hotel in Stuart,  Florida
under the  "Flanigan's  Seafood Bar and Grill" service mark. The Company is also
the owner of a twelve percent limited partnership interest, as are other related
parties,  including but not limited to officers and directors of the Company and
their  families.  The  renovated  restaurant  opened for business on January 11,
2004. As of the end of fiscal year 2005,  this limited  partnership had received
an aggregate sum equal to 20% of the initial  investment of all limited partners
from the net profit from the operation of the restaurant.

Wellington, Florida

         During the fourth  quarter of fiscal year 2004,  a limited  partnership
was formed  with the  Company  as general  partner,  which  limited  partnership
entered into a lease  agreement to own and operate a restaurant  in  Wellington,
Florida under the  "Flanigan's  Seafood Bar and Grill" service mark.  During the
first quarter of fiscal year 2005, the limited partnership completed its private
offering,  raising the sum of $1,850,000  to renovate the business  premises for
operation  as a  "Flanigan's  Seafood  Bar and Grill"  restaurant.  The  Company
continues  to act as  general  partner  and is also the  owner  of a twenty  six
percent limited partnership  interest,  as are other related parties,  including
but not limited to officers and directors of the Company and their families. The
restaurant  opened for  business on May 27,  2005.  As of the end of fiscal year
2005,  this limited  partnership had received an aggregate sum equal to 17.5% of
the  initial  investment  of all limited  partners  from the net profit from the
operation of the restaurant  (7.5%) and a tenant  allowance  (10%) received from
the landlord of the business premises.

Clubs
-----

         As of the end of  fiscal  year  2005,  the  Company  owned  one club in
Atlanta,  Georgia,  which  was  operated  by an  unaffiliated  third  party,  as
discussed below.

Operation of Unit by Unaffiliated Third Party
----------------------------------------------

         The Company has a Management Agreement with Mardi Gras Management, Inc.
for the  operation of the  Company's  club in Atlanta,  Georgia,  under an adult
entertainment  format doing business as "Mardi Gras", through the balance of the
term of the lease which  expires on April 30, 2006.  Pursuant to the  Management
Agreement, the Company receives an owner's fee equal to $150,000 per year versus
ten percent of gross sales from the club,  whichever is greater. The owner's fee
is paid at the rate of $12,500 per month subject to  adjustment  each year on or
about July 1st with an  additional  owner's  fee equal

                                       10
<PAGE>

to 10% of the gross sales  exceeding  $1,500,000  for the prior 12 month  period
being due the  Company.  The Company was holding a security  deposit of $200,000
from Mardi Gras Management,  Inc., but during fiscal year 2005,  $130,000 of the
security deposit was applied towards outstanding  additional owner's fee due the
Company.  As of October 1, 2005, the balance of the security deposit held by the
Company was $70,000,  which amount was approximately equal to the balance of the
rent due under the lease.

         During the third  quarter of fiscal year 2004,  Mardi Gras  Management,
Inc.  entered into a new lease agreement with the landlord of the Company's club
in Atlanta,  Georgia.  The new lease agreement is for a period of ten (10) years
commencing  when the current lease  expires on April 30, 2006,  with one (1) ten
(10) year renewal option.  The Company did not execute or guaranty the new lease
and has no liability on the same. Since Mardi Gras  Management,  Inc. will still
operate the club under the  Management  Agreement,  the Company will continue to
receive an owner's  fee of $150,000  per year versus ten (10%)  percent of gross
sales from the club, whichever is greater,  until the rental increases under the
new lease take  effect.  The Company  agreed that  one-half  (1/2) of the rental
increases  will be credited  against the  owner's  fee each year,  provided  the
owner's fee is never less than $150,000 per year.


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 five
area supervisors  responsible for package store,  restaurant and club operations
in specific geographic districts.

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


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

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

         All  Company  purchases  of  liquor  inventory  are  made  through  its
purchasing  department  from the  Company's  corporate  headquarters.  The major
portion of inventory is purchased under individual purchase orders with

                                       11
<PAGE>

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 alcoholic  beverage  control,  health,
sanitation,  safety and fire  department  agencies in the state or  municipality
where located.

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

         In the  State of  Florida,  which  represents  all but one of the total
liquor licenses held by the Company,  most of the Company's  liquor licenses are
issued on a "quota license"  basis.  Quota licenses are issued on the basis of a
population  count  established  from time to time  under the  latest  applicable
census.  Because the total  number of liquor  licenses  available  under a quota
license  system is limited  and  restrictions  placed upon their  transfer,  the
licenses  have  purchase  and resale  value  based upon supply and demand in the
particular  areas in which  they are  issued.  The  quota  licenses  held by the
Company  allow  the  sale of  liquor  for on and off  premises  consumption.  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

                                       12
<PAGE>

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.

         During  fiscal years 2003,  2004 and 2005 and through the present time,
no significant pending matters have been initiated by the Department of Alcohol,
Beverages and Tobacco  concerning  any of the Company's  licenses which might be
expected  to result in a  revocation  of a liquor  license or other  significant
actions against the Company.

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

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


Insurance
---------

         The  Company has  general  liability  insurance  which  incorporates  a
semi-self-insured  plan under  which the  Company  assumes  the full risk of the
first $50,000 of exposure per  occurrence.  The 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 2003,  fiscal  year 2004,  and again in fiscal year 2005 the
Company was able to purchase excess liability insurance at a reasonable premium,
whereby the Company's  excess  insurance  carrier is responsible  for $5,000,000
coverage above the Company's primary general liability insurance  coverage.  The
Company is un-insured against liability claims in excess of $6,000,000.

         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

                                       13
<PAGE>

incurred by the Company in defending a claim, including adjusters and attorney's
fees, are a part of the $50,000 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 in  general,  the
principal means of competition  among  restaurants  include  location,  type and
quality of facilities and type, quality and price of beverage and food served.

         The Company's package liquor stores compete directly or indirectly with
local retailers and discount "superstores". Due to the competitive nature of the
liquor  industry in South Florida,  the Company has had to adjust its pricing to
stay  competitive,  including  meeting  all  competitors'  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 October 1, 2005 the Company owned and operated
six  restaurants,  all of which had formerly been lounges and were  renovated to
provide full food service, operated one restaurant for a franchisee and operated
an additional six restaurants as general partner of limited partnerships.  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 and operated 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 two servicemarks;  "Big Daddy's
Liquors" and  "Flanigan's  Seafood Bar and Grill",  both of which are  federally
registered  trademarks  owned by the Company.  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

                                       14
<PAGE>

the settlement  agreement allow the Company to continue,  and expand, its use of
the "Big Daddy's"  servicemark in connection  with limited food and liquor sales
in Florida.  The consent decree further  contained a restriction upon all future
sales of distilled  spirits in Florida under the "Big Daddy's" name by the other
party who has a federally  registered  servicemark  for "Big Daddy's" use in the
restaurant  business.  The Federal Court  retained  jurisdiction  to enforce the
consent decree.  The Company has acquired a registered  Federal trademark on the
principal register for its "Flanigan's" servicemark.

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


Employees
---------

         As of year end, the Company  employed 691 employees,  of which 502 were
full-time and 189 were  part-time.  Of these,  37 were employed at the corporate
offices and 5 were employed in maintenance.  Of the remaining employees, 43 were
employed in package liquor stores and 606 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

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

James G. Flanigan       Chairman of the Board        41            2002
                        of Directors, Chief
                        Executive Officer and
                        President

August Bucci            Chief Operating Officer      61            2002
                        and Executive Vice
                        President

William Patton          Vice President               82            1975
                        Community Relations


Jeffrey D. Kastner      Chief Financial Officer      52            1995
                        General Counsel and
                        Secretary

Jean Picard             Vice President of            67            2002
                        Package Store
                        Operations

                                       15
<PAGE>

Flanigan's 401(k) Plan
----------------------

         Effective  July  1,  2004,  the  Company  began   sponsoring  a  401(k)
retirement   plan  covering   substantially   all  employees  who  meet  certain
eligibility  requirements.  Employees may contribute  elective  deferrals to the
plan up to amounts  allowed under the Internal  Revenue Code. The Company is not
required to contribute  to the plan but may make  discretionary  profit  sharing
and/or matching contributions. During the fiscal year ended October 1, 2005, the
Board  of  Directors  approved  discretionary  matching  contributions  totaling
$37,500 effective July 1, 2005.


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

(a) Hurricane Wilma:

         As the Company previously  disclosed in a press release on November 10,
2005, on October 24, 2005, Hurricane Wilma impacted South Florida. The corporate
office of the Company was the only  location  to suffer  significant  structural
damage,  including  the  loss of its  roof.  Contents  of the  corporate  office
sustained water damage. Structural repairs,  including the installation of a new
roof, have been completed and the corporate  offices are back in full operation.
The Company's books and records, including data systems, are all intact.

         Most  locations  owned  and/or  operated  by  the  Company,   including
franchises,  sustained minimal damage, but all locations lost electric power for
varying periods of time. With few exceptions,  the majority of damages consisted
of minimal roof damage,  lost mansard  shingles or tiles,  awnings,  signage and
landscaping.

         By  October  26,  2005,  the  second  day after  Hurricane  Wilma,  all
Company-owned  retail liquor stores were open for business  notwithstanding  the
loss of electric  power.  All franchised  retail package liquor stores were open
for business by October 29, 2005. Of the six (6) Company-owned restaurants,  two
(2) were re-opened by October 28, 2005,  three (3) restaurants were re-opened by
November 4, 2005, while the sixth (6th)  Company-owned  restaurant was re-opened
by November 10, 2005. Of the six (6) limited partnership  restaurants,  with the
exception of the restaurant  located in Surfside,  Florida,  which  re-opened on
November 3, 2005, all limited partnership  restaurants were re-opened by October
29, 2005.  Of the seven (7)  franchises,  with the  exception of the  franchised
restaurant in Fort Lauderdale, Florida, which re-opened on November 4, 2005, all
franchised restaurants were re-opened by October 31, 2005.

         The  Company  maintains   standard  and  customary  property  insurance
coverage,  as well as coverage for business  interruption.  These  coverages are
subject to certain  exclusions related to damages caused by windstorm and have a
deductible of $50,000 per occurrence.  The Company has begun  submitting  claims
for any and all damages that it concludes are not excluded and otherwise covered
by its insurance.  At this point, the Company cannot predict the extent to which
its damages and business interruption loss of revenue will ultimately be covered
by insurance, but the Company has received an advance of $250,000 ($300,000 less
the $50,000 deductible), from the insurance carrier on account of damages to the
corporate office alone.

                                       16
<PAGE>

         Hurricane  Wilma did not have a material  adverse  affect  upon  retail
package  revenues for the first quarter of fiscal 2006,  but did have a material
adverse affect upon restaurant food and bar revenues,  which lost  approximately
$550,000, (Company-owned restaurants - $350,000; limited partnership restaurants
- $200,000), in revenues for the same period.


(b) Purchase of Management Agreement:

         During the first quarter of fiscal 2006,  the Company also entered into
a management  agreement to operate an existing  restaurant  in Deerfield  Beach,
Florida  under its current  format,  "The  Whale's  Rib",  and to be entitled to
one-half  (1/2) of the net profit from the  operation  of the same.  The Company
agreed to pay  $500,000  for the  management  rights.  The  Company  assumed the
management of this restaurant at the start of the second quarter of fiscal 2006.
This  location  will not be  renovated to a  "Flanigan's  Seafood Bar and Grill"
restaurant, nor will it be owned by a limited partnership.


(c) Contract to Purchase New Restaurant Location:

         During the first  quarter of fiscal 2006,  the Company,  as agent for a
limited partnership to be formed, entered into a contract for the purchase of an
existing  restaurant in Davie,  Florida to renovate and operate as a "Flanigan's
Seafood  Bar and  Grill"  restaurant.  The  contract  is  subject  to  customary
contingencies,  including  but not  limited  to  landlord  approval  of  planned
renovations.  This location will be owned by a limited partnership and the funds
to purchase and renovate the same will be raised through a private offering.

Item 1A Risk Factors
--------------------

         An investment in the Company's  common stock involves a degree of risk.
These risks should be  considered  carefully  with the  uncertainties  described
below,  and all other  information  included in this Annual Report on Form 10-K,
before deciding whether to purchase the Company's common stock. Additional risks
and uncertainties not currently known to management or that management currently
deems immaterial may also become  important  factors that may harm the Company's
business, financial condition or results or operations. The occurrence of any of
the following risks could harm the Company's  business,  financial condition and
results of  operations.  The trading price of the  Company's  common stock could
decline  due to any of these risks and  uncertainties,  and you may lose part or
all of your investment.

         Certain statements in this report contain forward-looking  information.
In general,  forward-looking  statements  include  estimates of future revenues,
cash flows,  capital  expenditures,  or other  financial  items and  assumptions
underlying any of the foregoing. Forward-looking statements reflect management's
current expectations regarding future events and use words such as "anticipate",
"believe",   "expect",  "may",  "will"  and  other  similar  terminology.  These
statements  speak  only as of the date they  were  made and  involve a number of
risks and  uncertainties  that could cause actual  results to differ  materially
from those expressed in the forward-looking  statements.

                                       17
<PAGE>

Several factors,  many beyond the Company's control,  could cause actual results
to differ materially from management's expectations.


Planned Expansion May Not Be Successful
---------------------------------------

         The Company, as general partner of a limited partnership,  is currently
building  one (1) new  restaurant  in its  existing  South  Florida  market  and
expects,  at a minimum, to open this one (1) new restaurant in fiscal year 2006.
The Company's ability to open and profitably operate  restaurants and/or package
liquor  stores  is  subject  to  various  risks  such  as   identification   and
availability of suitable and economically  viable locations,  the negotiation of
acceptable leases or the purchase terms of existing locations,  the availability
of  limited  partner  investors,  the need to obtain all  required  governmental
permits  (including zoning approvals) on a timely basis, the need to comply with
other regulatory  requirements,  the  availability of necessary  contractors and
subcontractors,  the  availability  of  construction  materials  and labor,  the
ability to meet  construction  schedules  and budgets,  variations  in labor and
building  material  costs,  changes  in  weather or other acts of God that could
result in  construction  delays and adversely  affect the results of one or more
restaurants and/or package liquor stores for an indeterminate amount of time. If
the  Company  is unable to  unsuccessfully  manage  these  risks,  it could face
increased  costs and lower than  anticipated  revenues  and  earnings  in future
periods.


General Economic Factors May Adversely Affect Results of Operations
-------------------------------------------------------------------

         National,  regional and local economic conditions, such as recessionary
economic cycles, a protracted  economic slowdown or a worsening  economy,  could
adversely affect disposable consumer income and consumer confidence. Unfavorable
changes in these factors or in other business and economic  condition  affecting
the  Company's  customers  could reduce  customer  traffic in some or all of the
Company's  restaurants and/or package liquor stores,  impose practical limits on
pricing and increase  costs,  any of which could lower profit margins and have a
material effect on the Company's results of operations.


Changes in Customer Preferences for Casual Dining Styles Could Adversely Affect
Financial Performance
-------------------------------------------------------------------------------

         Changing customer preferences,  tastes and dietary habits can adversely
impact the Company's  business and financial  performance.  The Company offers a
large  variety of entrees,  side dishes and desserts and its  continued  success
depends, in part, on the popularity of our cuisine and casual style of dining. A
change  from this  dining  style  may have an  adverse  effect on the  Company's
business.

                                       18
<PAGE>

Labor Shortages, an Increase in Labor Costs, or Inability to Attract Employees
Could Harm Company Business
------------------------------------------------------------------------------

         The  Company's  employees are essential to the operation of the Company
restaurants and/or package liquor stores and the Company's ability to deliver an
enjoyable  dining  experience  to its  customers.  If the  Company  is unable to
attract and retain  enough  qualified  restaurant  and/or  package  liquor store
personnel at a reasonable  cost, and if they do not deliver an enjoyable  dining
experience,  the  Company's  results may be negatively  affected.  Additionally,
competition  for  qualified  employees  could  require the Company to pay higher
wages, which could result in higher labor costs.


Increases in Employee Minimum Wages by the Federal or State Government Could
Adversely Affect Business
----------------------------------------------------------------------------

         The Company  employees  are paid wages that relate to federal and state
minimum wage rates.  Any  increases in the minimum wage rates may  significantly
increase   labor  costs.   In  addition,   since  the   Company's   business  is
labor-intensive,  shortages  in the labor  pool or other  inflationary  pressure
could   increase  labor  costs,   which  could  harm  the  Company's   financial
performance.


Fluctuations in Commodity Prices and Availability of Commodities Including Pork,
Beef, Fish, Poultry and Dairy Could Affect Company Business
--------------------------------------------------------------------------------

         A  significant  component  of the  Company's  costs are related to food
commodities  including pork, beef, fish, poultry and dairy products. If there is
a substantial increase in prices for these products and the Company is unable to
offset the increases with changes in menu prices, the Company's results could be
negatively affected.


Due to the Company's  Geographic  Locations,  Restaurants are Subject to Climate
Conditions that Could Affect Operations
--------------------------------------------------------------------------------

         All but one (1) of the Company  restaurants  and package  liquor stores
are located in South Florida,  with the remaining  restaurant located in Central
Florida.  During hurricane  season,  (June 1st through November 30th each year),
the Company's  restaurants  and/or  package liquor stores may face harsh weather
associated with hurricanes and tropical storms.  These harsh weather  conditions
may make it more difficult for customers to visit the Company's  restaurants and
package liquor stores,  or may  necessitate the closure of the same for a period
of time.  If  customers  are unable to visit the  Company's  restaurants  and/or
package  liquor  stores,  Company sales and operating  results may be negatively
affected.

                                       19
<PAGE>

Inability to Attract and Retain Customers Could Affect Results of Operations
----------------------------------------------------------------------------

         The Company takes pride in its ability to attract and retain customers,
however,  if the Company does not deliver an enjoyable dining experience for its
customers, they may not return and results may be negatively affected.


The Company Faces  Competition in the Restaurant and Liquor  Industries,  and if
the  Company  is Unable to  Compete  Effectively,  its  Business  and  Financial
Performance will be Adversely Affected
--------------------------------------------------------------------------------

         The restaurant and liquor industries are intensely  competitive and are
affected  by changes in customer  tastes,  dietary  habits and by  economic  and
demographic trends. New menu items, concepts and trends are constantly emerging.
The Company competes on quality, variety, value, service, price and location. If
the Company is unable to compete effectively,  its business, financial condition
and results of operations will be materially adversely affected.


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.

         All of the Company's  units require  periodic  refurbishing in order to
remain  competitive.  The Company has  budgeted  $700,000  for its  refurbishing
program for fiscal year 2006. See Item 7, "Liquidity and Capital  Resources" for
discussion of the amounts spent in fiscal year 2005.

         The following table  summarizes the Company's  properties as of October
1, 2005 including franchise locations, a club and Company managed locations.


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

Big Daddy's Liquors #4     1,978      N/A     Company    3/1/02 to 2/28/27
Flanigan's Enterprises                                     and Options to
Inc. (10)                                                  2/28/37
7003 Taft Street
Hollywood, FL

                                       20
<PAGE>

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

Big Daddy's Liquors #7      1,450     N/A     Company      11/1/00 to 10/31/06
Flanigan's Enterprises                                       and Annual Options
Inc.                                                         to 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          4,300     130     Company      10/1/71 to 12/31/09
Bar and Grill #9                                             New lease 1/1/10
Flanigan's Enterprises                                       to 12/31/14
Inc. (1)                                                     Options to
1550 W. 84th Street                                          12/31/24
Hialeah, FL

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

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

Flanigan's Seafood          3,320      90     Franchise    6/1/79 to 6/1/09
Bar and Grill #14,                                           Options to 6/1/19
Big Daddy's #14, Inc.(2)(3)(5)(9)
2041 NE Second St.
Deerfield Beach, FL

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

Flanigan's Seafood          4,300     100     Franchise    2/15/72 to 12/31/10
Bar and Grill #18                                            Options to
Twenty Seven Birds                                            12/31/20
Corp. (2) (3) (5)                                            Option to purchase
2721 Bird Avenue
Miami, FL

                                       21
<PAGE>

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

Flanigan's Seafood          4,500     160     Company      3/1/72 to 12/31/10
Bar and Grill #19                                          Options to 12/31/20
Flanigan's Enterprises
Inc. (2)(4)
2505 N. University Dr.
Hollywood, FL

Flanigan's Seafood          5,100     140     Company      7/15/68 to 12/31/06
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 12/31/06
                                                           Annual options
                                                           until the Company
                                                           fails to exercise

Flanigan's Seafood          4,100     200     Company      12/16/68 to
Bar and Grill #22                                          12/31/10
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 12/31/10
Bar and Grill #31                                          Options to 12/31/20
Flanigan's Enterprises                                     Option to purchase
Inc. (2)(12)
4 N. Federal Highway
Hallandale, FL

Flanigan's Guppy's          4,620     130     Franchise    11/1/03 to 4/30/11
Seafood Bar and Grill #33
Guppies, Inc. (2)(3)(5)
45 S. Federal Highway
Boca Raton, FL

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

                                       22
<PAGE>

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

Flanigan's Seafood          4,600     140     Company      4/1/71 to 12/31/10
Bar and Grill #40                                          Options to 12/31/15
Flanigan's Enterprises
Inc. (2)
5450 N. State Road 7
Ft. Lauderdale, FL

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

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

Flanigan's Seafood          8,000     200     Limited      06/01/91 to 5/31/11
Bar and Grill #13, (11)                       Partnership  Options to 5/31/21
CIC Investors #13, Ltd
11415 S. Dixie Highway
Pinecrest, FL

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

Flanigan's Seafood          6,128     200     Limited      4/01/05 to 3/31/15
Bar and Grill #65                             Partnership  Options to 3/31/25
CIC Investors #65, Ltd
2335 State Road 7,Suite 100
Wellington, FL

Flanigan's Seafood          4,850     161     Limited      4/1/98 to 3/31/08
Bar and Grill #70                             Partnership  Options to 3/31/28
CIC Investors #70 Ltd.
12790 SW 88 St
Kendall, FL

Flanigan's Seafood          7,000     200     Limited      10/1/03 to 9/30/06
Bar and Grill #75                             Partnership  Options to 9/30/27
CIC Investors # 75 Ltd.
950 S. Federal Highway
Stuart, FL 34994

                                       23
<PAGE>


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

Flanigan's Seafood          5,000     165     Limited      6/15/01 to 12/14/19
Bar and Grill #80                             Partnership  Options to 12/14/39
CIC Investors #80 Ltd.
8695 N.W. 12th St
Miami, FL

Flanigan's Seafood          5,700     235     Limited      7/29/01 to 7/28/17
Bar and Grill #95                             Partnership  Options to 7/28/32
CIC Investors #95 Ltd.
2460 Weston Road
Weston, FL

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

 (1)     License subject to chattel mortgage.

 (2)     License pledged to secure lease rental.

 (3)     Franchised by Company.

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

 (5)     Lease assigned to franchisee

 (6)     The Company owns 48% of the underlying  leasehold from the unaffiliated
         third parties to whom the lease had been assigned and subleased back.

 (7)     Location managed by an unaffiliated third party.

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

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

(10)     Ground lease executed by the Company on September 25, 2001. The Company
         constructed a building of 4,120 square feet,  1,978 square feet is used
         by the  Company for the  operation  of a package  liquor  store and the
         other  2,142  square feet is  subleased  as retail  space.  The package
         liquor store opened for business on November 17, 2003.

(11)     Location  estimated  to open for business  during the third  quarter of
         fiscal year 2006.

                                       24
<PAGE>

(12)     During the fourth  quarter of fiscal year 2004,  the Company  exercised
         its option purchase the real property and for an assignment of a ground
         lease of this location  pursuant to an option to purchase  contained in
         the Sublease Agreement.


Exercise of Option to Purchase.
-------------------------------

         During the fourth  quarter of fiscal year 2004,  the Company  exercised
the option to purchase  contained in the Sublease  Agreement for the combination
restaurant  and  package  liquor  store  located  at 4  North  Federal  Highway,
Hallandale,  Florida,  (Store #31). The purchase  includes real property and the
assignment of a ground lease for a small  portion of the  property.  The Company
has procured  financing  for this  purchase.  The option to purchase  contains a
formula  whereby each party  retains an appraiser to determine  the "fair market
value" for the purchase of the property and if the two  appraisers  cannot agree
upon the same, then a third appraiser is selected,  whose  determination  of the
"fair market price" is binding.  During the fourth  quarter of fiscal year 2005,
the parties agreed upon a third appraiser to determine the purchase price. It is
anticipated  that the transaction will close during the second quarter of fiscal
year 2006.


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

         Certain  states  have liquor  liability  (dram shop) laws which allow a
person  injured  by an  "obviously  intoxicated  person"  to bring a civil  suit
against the business (or social host) who had served intoxicating  liquors to an
already  "obviously  intoxicated  person".  Dram shop  claims  normally  involve
traffic  accidents and the Company  generally does not learn of dram shop claims
until  after a claim is filed  and then the  Company  vigorously  defends  these
claims on the grounds that its employee did not serve an "obviously  intoxicated
person".  Damages in most dram shop cases are substantial.  At the present time,
there are no dram shop cases pending against the Company.  The Company maintains
general liability  insurance.  See Item 1, "Insurance" on page 13 of this annual
report of Form 10-K for a discussion of general liability insurance.

         There is no material  pending  legal  proceedings,  other than ordinary
routine litigation incident to the business,  none of which the Company believes
is material.


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

         During  the  fourth  quarter of fiscal  year 2005 the  Company  did not
submit any matter to a vote of the security holders.

                                       25
<PAGE>

                                     PART II
                                     -------

Item 5. Market for Registrant's  Common Equity,  Related Stockholder Matters and
Issuer Purchases of Equity Securities.
--------------------------------------------------------------------------------

                    Fiscal 2005     Fiscal 2004    Fiscal 2003
                    -----------     -----------    -----------
                    High    Low     High    Low    High    Low
                    ----    ---     ----    ---    ----    ---

First quarter       7.35    6.20    6.85    6.00    6.10   4.90
Second quarter      9.35    6.97    6.90    6.13    6.10   5.50
Third quarter       9.40    7.16    6.70    6.20    6.37   5.99
Fourth quarter      9.90    8.90    6.65    6.21    6.60   6.00


         On December 18, 2003 the Company  declared a cash  dividend of 30 cents
per share payable on January 15, 2004 to  shareholders of record on December 30,
2003.

         On December 9, 2004,  the Company  declared a cash dividend of 32 cents
per share payable on January 28, 2005 to  shareholders  of record on January 14,
2005.

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


Item 6. Selected Financial Data.
--------------------------------
-----------------------------------------------------------------------------
              2001         2002         2003         2004         2005
-----------------------------------------------------------------------------
                            Statement of Operations Data
-----------------------------------------------------------------------------
Revenue   $36,038,000  $39,124,000  $40,253,000  $45,933,000   $49,032,000

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

Income from Operations

          $ 2,583,000  $ 2,788,000  $ 2,024,000  $1,273,000     $2,166,000

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

Net income $1,529,000  $ 1,383,000    $ 888,000   $ 440,000       $1,107,000
-----------------------------------------------------------------------------
Earnings per share $  0.80    $ 0.71      $ 0.46      $ 0.23           $ 0.58
-----------------------------------------------------------------------------

                               Balance Sheet Data
-----------------------------------------------------------------------------
Total assets $16,728,000  $17,367,000  $18,733,000  $19,774,000  $20,844,000
-----------------------------------------------------------------------------

                                       26
<PAGE>

Long term liabilities
             $ 2,010,000  $ 1,593,000  $ 1,314,000  $ 1,217,000  $ 1,383,000
-----------------------------------------------------------------------------
Net working capital
             $ 2,436,000  $ 2,980,000  $ 2,093,000  $ 2,131,000  $ 2,151,000
-----------------------------------------------------------------------------
Stockholders' equity
             $ 8,968,000  $ 9,957,000  $10,351,000  $10,101,000  $10,273,000
-----------------------------------------------------------------------------
Dividends declared
             $   231,000  $   499,000  $   520,000  $   581,000  $   609,000
-----------------------------------------------------------------------------

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

Overview
--------

         The Company owns and/or  operates  restaurants  with  lounges,  package
liquor stores and an adult  entertainment  oriented club. As of October 1, 2005,
the Company operated  nineteen units. The Company had interests in an additional
seven units which were  franchised  by the  Company,  including  the  franchised
restaurant  managed by the Company.  Of the units operated by the Company,  four
were combination package liquor store and restaurant, nine were restaurants only
and five were  package  liquor  stores only.  There was one club  operated by an
unaffiliated third party under a management agreement.  During fiscal year 2001,
the Company entered into a ground lease and constructed a building in Hollywood,
Florida for the  operation of a package  liquor store from one half (1/2) of the
building and to sublease retail space from the other one half (1/2). The package
liquor store opened for  business  during the first  quarter of fiscal year 2004
and the retail  space was  subleased  during the second  quarter of fiscal  year
2004.  At the start of the second  quarter of fiscal  year  2004,  a  restaurant
located in Stuart,  Florida, owned by a limited partnership of which the Company
acts as general  partner,  opened for  business.  During  fiscal year 2004,  the
Company  entered into a lease  agreement and  renovated a restaurant  located in
Wellington, Florida, owned by a limited partnership of which the Company acts as
general partner. The restaurant opened for business on May 27, 2005.

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

THE FISCAL YEARS ENDING OCTOBER 1, 2005, ("FISCAL 2005") AND SEPTEMBER 27, 2003,
("FISCAL  2003"),  WERE FIFTY TWO WEEK  FISCAL  YEARS.  THE FISCAL  YEAR  ENDING
OCTOBER 2, 2004,  ("FISCAL  2004"),  WAS A FIFTY  THREE WEEK FISCAL YEAR AND THE
EXTRA WEEK IN FISCAL YEAR 2004 CONTRIBUTED TO INCREASES IN REVENUES AND EXPENSES
FOR THE FISCAL YEAR WHEN  COMPARING THEM TO REVENUES AND EXPENSES FOR THE FISCAL
YEARS 2005 and 2003,  WITH THE  EXCEPTION  OF THE  WEEKLY  AVERAGE OF SAME STORE
SALES.

                                       27
<PAGE>

REVENUES (in thousands):
-------------------------------------------------------------------------------
                     Fifty Two           Fifty Three               Fifty Two
                    Weeks Ended          Weeks Ended              Weeks Ended
                    Oct. 1, 2005         Oct. 2, 2004           Sept. 27, 2003
Sales
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
Restaurant, food   $29,219   61.3%      $26,347   59.1%         $22,489   57.7%
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
Restaurant, bar      6,610   13.9%        7,351   16.5%           6,705   17.2%
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
Package goods       11,810   24.8%       10,911   24.4%           9,777   25.1%
-------------------------------------------------------------------------------

Total               47,639  100.0%       44,609  100.0%          38,971  100.0%
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
Franchise revenues     984                  958                     904
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
Owners fee             261                  265                     260
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
Other operating
  income               148                  101                     118
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
Total Revenues     $49,032              $45,933                 $40,253
-------------------------------------------------------------------------------

Comparison of Fiscal Years Ended October 1, 2005 and October 2, 2004
--------------------------------------------------------------------

         As  the  table  above  illustrates,  total  revenues  for  fiscal  2005
increased by 6.7% when compared to fiscal 2004.  The increase in total  revenues
for fiscal 2005 was  primarily  due to the  restaurant  in  Wellington,  Florida
opening  during the third  quarter of fiscal  2005,  the  restaurant  in Stuart,
Florida and the package  store in  Hollywood,  Florida being open for the entire
fiscal  2005,  increases  in same store sales and menu price  increases.  During
fiscal year 2006,  ("fiscal  2006"),  total  revenues  are  expected to continue
increasing primarily due to the restaurant in Wellington, Florida being open for
the entire fiscal year, the anticipated  opening of the restaurant in Pinecrest,
Florida at the start of the third quarter of fiscal 2006,  increased  volume and
menu price increases.

                                       28
<PAGE>

         Restaurant food sales  represented 61.3% of total sales for fiscal 2005
as compared to 59.1% of total sales for fiscal 2004.  The weekly average of same
store  restaurant food sales,  which now includes three (3) limited  partnership
restaurants  instead of one (1),  was  $444,000  for fiscal  2005 as compared to
$404,000 for fiscal 2004, an increase of 9.9%.  The weekly average of restaurant
food sales increased for fiscal 2005 as compared to fiscal 2004 due to increased
volume and menu price  increases.  The  percentage of  restaurant  food sales to
total  sales  increased  due to the  opening of the  restaurant  in  Wellington,
Florida  during  fiscal 2005 and is expected to increase  further  during fiscal
2006 due to the  anticipated  opening of the  restaurant in  Pinecrest,  Florida
during the third quarter of fiscal 2006.

         Restaurant bar sales  represented  13.9% of total sales for fiscal 2005
as compared to 16.5% of total sales for fiscal 2004.  The weekly average of same
store  restaurant  bar sales was $99,000 for fiscal 2005 as compared to $101,000
for fiscal  2004,  a decrease of 2.0%.  During  fiscal  2005 the  Company  began
offering promotions at the bars only, during limited hours. With this promotion,
the  decrease  in the  weekly  average  of same  store  restaurant  bar sales is
expected to be  reversed,  but  management  is careful to preserve  and continue
promoting the Company's perception as a family restaurant.

         Package store sales represented 24.8% of total sales for fiscal 2005 as
compared to 24.4% of total  sales for fiscal  2004.  The weekly  average of same
store  package  sales was  $192,000  for fiscal 2005 as compared to $180,000 for
fiscal 2004,  an increase of 6.7%.  The increase was  primarily due to increased
volume.  During fiscal 2006, package store sales are expected to increase due to
the continued increase in the weekly average of same store package sales.

         The gross profit margin for restaurant  sales was 65.1% for fiscal 2005
as compared to 64.4% for fiscal 2004. The Company offset  increased costs during
fiscal 2005 with menu price  increases,  which  resulted in an  increased  gross
profit margin for  restaurant  sales when  compared to fiscal 2004.  The Company
expects  costs to continue  increasing  during  fiscal 2006 and will continue to
offset increasing costs by menu price increases,  where competitively  possible,
during fiscal 2006.

         The gross  profit  margin for package  goods sales was 28.6% for fiscal
2005 as compared to 27.9% for fiscal  2004.  For fiscal  2005,  the  increase in
gross  profit  is  attributed  to the  purchase  of  "close  out" and  inventory
reduction  merchandise  from wholesalers and the continued  implementation  of a
training  program for  package  store  employees.  The gross  profit  margin for
package good sales is expected to remain constant during fiscal 2006.

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

         Operating  costs and  expenses  for  fiscal  2005 were  $46,866,000  as
compared to $44,660,000 for fiscal 2004. Operating expenses are comprised of the
cost of  merchandise  sold,  payroll  and  related  costs,  occupancy  costs and
selling, general and administrative  expenses.  Operating costs and expenses for
fiscal 2005  increased by 4.9% as compared to  operating  costs and expenses for
fiscal 2004.  The  increase in operating  costs and expenses for fiscal

                                       29
<PAGE>

2005 was  primarily  due to the  opening of the new  restaurant  in  Wellington,
Florida  during the third  quarter of fiscal  2005,  the  restaurant  in Stuart,
Florida and the package  store in  Hollywood,  Florida being open for the entire
fiscal  year,  as well as a general  increase  in  overall  operating  costs and
expenses.  During  fiscal  2006,  operating  costs and  expenses are expected to
continue increasing primarily due to the restaurant in Wellington, Florida being
open for the entire  year,  the  anticipated  opening of the new  restaurant  in
Pinecrest,  Florida  during  the  third  quarter  of  fiscal  2006 and a general
increase in overall operating costs and expenses.

         Payroll and related costs were $13,636,000 for fiscal 2005, as compared
to $12,523,000 for fiscal 2004,  representing increases of 8.9%. The increase in
payroll and related  costs for fiscal 2005 was  primarily  due to the opening of
the new  restaurant in  Wellington,  Florida  during the third quarter of fiscal
2005,  the new  Florida  minimum  wage which went into  effect  during the third
quarter of fiscal  2005 and the  restaurant  in Stuart,  Florida and the package
store in Hollywood,  Florida being open for the entire fiscal year.  Payroll and
related costs are expected to increase during fiscal 2006 due to the anticipated
opening of the restaurant in Pinecrest,  Florida and the increase in the Florida
minimum wage by a cost of living increase effective January 1, 2006.

         Occupancy costs,  which include rent, common area maintenance,  repairs
and taxes were  $2,853,000  for fiscal 2005 as compared to $2,740,000 for fiscal
2004.  The increase in occupancy  costs during  fiscal 2005 was due primarily to
the payment of rent for the new restaurant in Wellington, Florida.

         Selling, general and administrative expenses were $9,439,000 for fiscal
2005 as compared to $9,525,000 for fiscal 2004. Excluding non-recurring expenses
and/or adjustments in selling, general and administrative expenses during fiscal
2004, which expenses and adjustments totaled $467,000,  the increase in selling,
general and administrative  expenses during fiscal 2005 was primarily due to the
opening of the new restaurant in Wellington, Florida during the third quarter of
fiscal 2005 and the  restaurant  in Stuart,  Florida  and the  package  store in
Hollywood, Florida having been open the entire fiscal year. Selling, general and
administrative  expenses are expected to increase  during fiscal 2006 due to the
anticipated opening of the restaurant in Pinecrest, Florida.

         During  fiscal  2004,  the  following   non-recurring  expenses  and/or
adjustments in selling,  general and  administrative  expense adversely effected
earnings:

First Quarter Fiscal Year 2004:


            a       Adjustment for store supplies                       $104,000

Second Quarter Fiscal Year 2004:

            a.      Adjustment for allocations of insurance
                    premiums related to franchises:                     $178,000

            b.      Past Due Real Property Taxes                         $52,000

                                       30
<PAGE>

            c.      Excess opening costs of joint venture                $74,000
                    restaurant in Stuart, Florida

Third Quarter Fiscal Year 2004:

            a.      Past Due Real Property Taxes                         $59,000

                                                                   -------------
                                                                 Total: $467,000

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

         Other  income  and  expenses,   which  include  minority   interest  in
consolidated limited partnerships, were an expense of ($516,000) for fiscal 2005
as compared to  ($663,000)  for fiscal 2004.  Other income and expense of fiscal
2005  includes  the expense of $121,000  relating  to the  abandonment  of fixed
assets, as compared to the expense of $367,000 for fiscal 2004.


Comparison of Fiscal Years Ended October 2, 2004 and September 27, 2003
-----------------------------------------------------------------------

         As the table above also  illustrates,  total  revenues  for fiscal 2004
increased when compared to fiscal year 2003.

         Restaurant food sales  represented 59.1% of total sales for fiscal 2004
as compared to 57.7% of total sales for fiscal 2003.  The weekly average of same
store restaurant food sales was $404,000 for fiscal 2004 as compared to $388,000
for fiscal 2003,  an increase of 4.1%.  The weekly  average of  restaurant  food
sales  increased  for the fiscal as  compared  to fiscal  2003 due to menu price
increases and increased volume.

         Restaurant bar sales  represented  16.5% of total sales for fiscal 2004
as compared to 17.2% of total sales for fiscal 2003.  The weekly average of same
store  restaurant bar sales was $101,000 for fiscal 2004 as compared to $104,000
for fiscal 2003, a decrease of 2.9%.  The decrease in the weekly average of same
store  restaurant bar sales is expected to continue as the Company's  perception
as a family restaurant continues to grow.

         Package  store  sales  represented  24.4% of total sales for the fiscal
2004 as compared to 25.1% of total sales for fiscal 2003.  The weekly average of
same store  package  sales was  $180,000 for fiscal 2004 as compared to $177,000
for fiscal  2003,  an  increase  of 1.7%.  The  increase  was  primarily  due to
increased volume.

         The gross profit margin for restaurant  sales was 64.4% for fiscal 2004
as compared to 65.8% for fiscal  2003.  The gross profit  margin for  restaurant
sales for fiscal 2004 was adversely  affected by increasing  costs.  The Company
has offset increased costs by price increases.

         The gross  profit  margin for package  goods sales was 27.9% for fiscal
2004 as compared to 27.0% for fiscal  2003.  For fiscal  2004,  the  increase in
gross  profit  is  attributed  to the  purchase  of  "close  out" and  inventory

                                       31
<PAGE>

reduction  merchandise from wholesalers and the implementation of a new training
program for package store employees.

         Overall  gross profits were 55.5% for fiscal 2004, as compared to 56.1%
for fiscal 2003.  The decline in overall gross profits was primarily  attributed
to increasing costs and a higher percentage of restaurant food and package sales
versus a decline in restaurant  beverage sales.  During fiscal 2004, the Company
began offsetting the decline in overall gross profits by price increases.


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

         Operating  costs and  expenses  for  fiscal  2004 were  $44,660,000  as
compared to $38,229,000 for fiscal 2003. Operating expenses are comprised of the
cost of  merchandise  sold,  payroll  and  related  costs,  occupancy  costs and
selling, general and administrative  expenses.  Operating costs and expenses for
fiscal 2004  increased by 16.8% as compared to operating  costs and expenses for
fiscal  2003,  primarily  due to the  opening of the new  restaurant  in Stuart,
Florida on January 11, 2004,  the opening of the new package store in Hollywood,
Florida on November 17, 2003 and the  restaurant  in Weston,  Florida being open
for the entire fiscal year ended October 2, 2004, as well as a general  increase
in overall operating costs and expenses.

         Payroll and related costs were $12,523,000 for fiscal 2004, as compared
to  $11,423,000  for fiscal  2003.  Payroll  and  related  costs for fiscal 2004
increased as compared to payroll and related  costs for fiscal  2003,  primarily
due to the opening of the new restaurant in Stuart, Florida on January 11, 2004,
the opening of the new package store in Hollywood,  Florida on November 17, 2003
and the restaurant in Weston, Florida being open for the entire fiscal 2004.

         Occupancy costs,  which include rent, common area maintenance,  repairs
and taxes were  $2,740,000  for fiscal 2004 as compared to $2,158,000 for fiscal
2003.  The increase in occupancy  costs during  fiscal 2004 was due primarily to
the payment of rent for the restaurant in Weston,  Florida for the entire fiscal
year,  the  payment of rent for the new  restaurant  in Stuart,  Florida and the
payment of rent for a new restaurant  location in Pinecrest,  Florida commencing
at the start of the second quarter of fiscal 2004.

         Selling, general and administrative expenses were $9,525,000 for fiscal
2004 as compared to $7,534,000 for fiscal 2003. The increase in selling, general
and  administrative  expenses  during  fiscal  2004  was  primarily  due  to the
restaurant in Weston, Florida being open for the entire fiscal year, the opening
of the new restaurant in Stuart,  Florida on January 11, 2004 and the opening of
the new package store in Hollywood, Florida on November 11, 2003.

New Limited Partnership Restaurants
-----------------------------------

         As the Company  opens new  limited  partnership  restaurants  on a more
regular basis, the Company's  income from operations will be adversely

                                       32
<PAGE>

affected by the higher costs  associated with the opening of the same. To insure
that a new  restaurant  opens with the high  quality  of  service  for which the
Company is known,  the Company has a select  group of  employees,  known as "new
restaurant  openers",  who  travel to new  restaurants  for that  purpose.  "New
restaurant openers" may spend up to 90 days at a new restaurant.  In the case of
a new  limited  partnership  restaurant  which  is not  local,  lodging  must be
provided for the "new restaurant  openers",  which may increase the opening cost
significantly  over  the  opening  cost  of  local  restaurants.   In  addition,
immediately  prior to the opening of a new  restaurant and in order to provide a
"test  run" for the same,  the  Company  sponsors  pre-opening  parties  for its
limited partners and the Company employees. By way of illustration,  the opening
of the limited partnership restaurants in Wellington,  Florida,  Stuart, Florida
and Weston, Florida during fiscal 2005, 2004 and 2003 respectively, incurred the
following pre-opening and opening expenses:

                    #65- Wellington, Fl    #75- Stuart, Fl.   #95- Weston, Fl.
                    -------------------    ----------------   ----------------

Pre-Opening Rent:          $18,000             $17,000            $72,000
Pre-Opening Payroll:       $90,000*            $22,000**          $36,000
Post-Opening Increased
Payroll Costs (90 days):   $22,000*            $42,000**          $18,000
Promotional Costs:         $ 3,000             $ 7,000            $ 9,000
                           ---------           ---------          ---------
Total:                     $133,000            $88,000            $135,000

*   excludes  lodging and per diem  allowances,  ($51,000),  for new  restaurant
    openers incurred due to proximity of this location.
**  excludes  lodging and per diem  allowances,  ($74,000),  for new  restaurant
    openers incurred due to the proximity of this location.

         The pre-opening rent is generally less for new leases,  rather than the
purchase of an existing  location  which  includes the assumption of an existing
lease.  In the  negotiation  of a new lease,  there is  normally a  construction
period  before  which the rent  begins.  In the case of the limited  partnership
restaurant in Wellington,  Florida, the lease agreement, as amended,  included a
two hundred ten (210) day period for  renovations,  although the  restaurant did
not open for seven and one half (7 1/2) months from the date  possession  of the
business premises was turned over to the limited  partnership to begin its build
out.  Since the  opening of the  limited  partnership  restaurant  in  Surfside,
Florida,  the pre-opening rent expense for limited  partnership  restaurants has
ranged from $17,000 - $137,000. The pre-opening rent expense for the new limited
partnership  restaurant  in  Pinecrest,  Florida  has  already  proven  to be an
exception to the customary  pre-opening  rent expense due to structural  repairs
which had to be made to the business premises prior to renovations beginning. As
of October 1, 2005,  pre-opening rent was $357,000 and continuing at $17,000 per
month.  The  Company  has  preserved  its  right to assert a claim  against  the
landlord that some of the pre-opening rent is not due while  structural  repairs
have delayed its renovations.

         During fiscal 2005, the limited  partnership  restaurant in Wellington,
Florida  reported a loss of $364,000,  thus  contributing  to a reduction in the
operating income for fiscal 2005.  During fiscal 2006,  operating income will be
adversely  affected by continued  opening  costs of the new limited  partnership
restaurant in Pinecrest, Florida.

                                       33
<PAGE>

Trends
------

         During the next twelve months,  management expects continued  increases
in restaurant sales due primarily to the restaurant in Wellington, Florida being
open for the entire fiscal year, the  anticipated  opening of the new restaurant
in  Pinecrest,  Florida,  and continued  increases in same store sales.  Package
goods sales are also  expected to increase  due to  continued  increases in same
store  sales.  Franchise  royalties  are  expected  to  increase  due to the new
restaurant in Wellington, Florida, the anticipated opening of the new restaurant
in  Pinecrest,  Florida  and  continued  increases  in same store  sales for the
limited partnerships and franchises.  At the same time,  management also expects
higher food costs and  overall  expenses to  increase  generally,  although  the
Company  will  continue to raise its menu prices to offset the higher food costs
and overall expenses wherever competitively possible.

         The  Company  intends  to  open  additional   restaurants  as  suitable
locations  become  available,  using  limited  partnerships,  of which it is the
general partner, to raise funds to own and operate the same.

         The Company is not actively  searching  for locations for the operation
of a package store,  but if an appropriate  location for a package store becomes
available, the Company will consider the same.

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

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

         The following table is a summary of the Company's cash flows for fiscal
years 2005, 2004 and 2003:
------------------------------------------------------------------------
                                  Fiscal Years
------------------------------------------------------------------------
                                2005                2004          2003
------------------------------------------------------------------------
                                       (in thousands)
------------------------------------------------------------------------
Net cash provided by
operating activities            $2,664             $3,411        $4,418
------------------------------------------------------------------------
Net cash used in
investing activities            (2,054)            (1,289)       (3,269)
------------------------------------------------------------------------

                                       34
<PAGE>

Net cash used in
financing activities              (872)              (773)         (705)
------------------------------------------------------------------------

Net increase (decrease)
in cash and equivalents           (262)             1,349           444
------------------------------------------------------------------------
Cash and equivalents.
beginning of year                2,936              1,587         1,143
------------------------------------------------------------------------
Cash and equivalents.
end of year                     $2,674             $2,936        $1,587
------------------------------------------------------------------------

Capital Expenditures
--------------------

         Capital expenditures were $2,095,000,  $1,532,000 and $3,028,000 during
fiscal years 2005,  2004 and 2003,  respectively.  During fiscal year 2005,  the
Company also purchased  three (3) vehicles,  for an aggregate  purchase price of
$302,000,  which vehicles were 100% financed.  The capital expenditures for each
fiscal year included  upgrading  existing units serving food and improvements to
package liquor stores.  The capital  expenditures  for fiscal year 2005 included
renovations  to the  business  premises  by the  joint  venture  in  Wellington,
Florida, ($1,280,000).


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

Long-term debt                    1,557,000     174,000    1,383,000
Operating leases                 17,957,000   2,337,000    7,962,000   7,658,000
Rib Contract                      3,280,000   3,280,000
                                 ----------   ---------    ---------   ---------

Total                            22,794,000   5,791,000    9,345,000   7,658,000
                                 ==========   =========    =========   =========

         All of the Company's  units require  periodic  refurbishing in order to
remain competitive.  The budget for fiscal 2006 includes  approximately $700,000
for this purpose,  which is not included in the above table. The table also does
not  include  any lease  guarantees  for  franchisees,  which  guarantees  total
approximately  $2,970,000.  The Company expects the funds for these improvements
to be provided  from  operations.  In addition,  it is  anticipated  that during
fiscal 2006, one new limited  partnership,  (Pinecrest,  Florida),  will require
approximately $2,000,000 in capital expenditures to complete its renovations and
preparation  for opening as a  "Flanigan's  Seafood  Bar and Grill"  restaurant,
which funds will be raised through a private offering. The private offering will
also raise funds to  reimburse  the Company for funds  advanced in excess of its
planned investment in this limited partnership.

                                       35
<PAGE>

Purchase Commitments
--------------------

         Effective  December  1,  2005,  the  Company  entered  into a  purchase
agreement with its rib supplier.  The terms of the agreement  stipulate that the
Company will purchase approximately $3,280,000 of baby back ribs during calendar
year 2006 at a fixed cost.  The Company  contracts for the purchase of baby back
ribs on an  annual  basis to fix the cost and  ensure  adequate  supply  for the
calendar year. The Company purchases all of its rib supply from this vendor, but
management  believes that several other  alternative  vendors are available,  if
needed.


Purchase of Company Common Stock
--------------------------------

         Pursuant to a  discretionary  plan  approved by the Board of Directors,
during fiscal 2005, the Company  purchased 42,720 shares of its common stock for
an aggregate purchase price of $353,000.


Long Term Debt
--------------

         During the fourth quarter of fiscal 2005,the  Company financed the full
purchase price of a 2006 Craftsmen  Limbusine for $238,500.  The purpose for the
purchase of this vehicle is advertising  and to promote  employee  welfare.  The
2006 Craftsmen Limbusine is covered with the Company servicemarks and logos. The
promissory  note bears  interest  at the rate of 9.25% per annum,  is payable in
sixty (60) equal monthly payments of principal and interest,  each in the amount
of $4,450, at which time the unpaid principal  balance of $45,000,  plus accrued
interest will be due in full.  The  promissory  note is secured by a lien on the
2006 Craftsmen Limbusine.

         As of the end of  fiscal  2005,  the  Company  had  long  term  debt of
$1,557,000,  as compared to  $1,314,000  and  $1,592,000 as of the end of fiscal
2004 and 2003,  respectively,  an  increase of 18.5% from the end of fiscal 2004
and a  decrease  of 2.2%  from the end of  fiscal  2003,  respectively.  The net
increase  in long term debt as of the end of fiscal  2005,  as  compared to long
term debt as of the end of fiscal 2004,  includes the  unsecured  loan from Bank
Atlantic,  two (2) secured auto loans and the secured 2006  Craftsmen  Limbusine
loan.

         The Company  repaid long term debt,  including the Bank of America note
payable, the Bank Atlantic note payable, auto loans, mortgages and capital lease
obligations  in the amount of  $309,000,  $278,000  and $346,000 in fiscal 2005,
2004 and 2003 respectively.

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

         The table below summarizes the current assets,  current liabilities and
working capital for the fiscal years ending 2005, 2004 and 2003:

                                       36
<PAGE>

                                           Oct. 1         Oct. 2      Sept. 27
                                            2005           2004         2003

Current assets                           $6,091,000    $5,889,000    $4,958,000

Current liabilities                       3,940,000     3,758,000     2,865,000

Working capital                           2,151,000     2,131,000     2,093,000

         Working  capital  for fiscal 2005  increased  by 0.9% and 2.8% from the
working capital for fiscal 2004 and 2003, respectively.  The increase in working
capital  would have been greater had the Company not  continued to advance funds
for capital  improvements and on-going  expenses for the limited  partnership in
Pinecrest,  Florida,  ($525,000).  During fiscal 2006 and the  completion of the
private offering by the limited  partnership owning the restaurant in Pinecrest,
Florida,  the Company  will be  reimbursed  for  advances  made in excess of its
investment  ($700,000  investment  at  a  minimum),  thereby  improving  working
capital.

         Management  believes  that  positive  cash  flow from  operations  will
adequately fund operations,  debt reductions and planned capital expenditures in
fiscal 2006.  However,  it is also anticipated that during fiscal 2006,  working
capital will be  adversely  affected by the annual  dividend,  repair of damages
caused  by  Hurricane  Wilma  pending  reimbursement  of  insured  losses by the
insurance  carrier,  investments  and/or  advances  made by the  Company  to the
limited partnership in Pinecrest, Florida pending reimbursement of advances made
by the  Company in excess of its  investment  once the  private  offering by the
limited  partnership  is  completed  and the closing on the purchase of the real
property and ground lease of one location currently leased by the Company.

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

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

Estimated Useful Lives of Property and Equipment
------------------------------------------------

         The estimate of useful lives for property and equipment are significant
estimates.  Expenditures  for the leasehold  improvements  and

                                       37
<PAGE>

equipment  when a restaurant is first  constructed  are  material.  In addition,
periodic  refurbishing  takes  place and  those  expenditures  can be  material.
Management estimates the useful life of those assets by considering, among other
things, expected use, life of the lease on the building, and warranty period, if
applicable.  The assets are then  depreciated  using a straight line method over
those  estimated  lives.  These estimated  lives are reviewed  periodically  and
adjusted if necessary.  Any necessary adjustment to depreciation expense is made
in the income  statement of the period in which the  adjustment is determined to
be necessary.

Consolidation of Limited Partnerships
-------------------------------------

         The Company  operates (6) restaurants as general partner of the limited
partnerships  that own the operations of these  restaurants.  Additionally,  the
Company  expects that any expansion which takes place in opening new restaurants
will also result in the Company operating the restaurants as general partner. In
addition to the general partnership  interest the Company also purchases limited
partnership units ranging from 12% to 42% of the total units  outstanding.  As a
result of these controlling  interests,  the Company consolidates the operations
of these  limited  partnerships  with those of the Company  despite the fact the
Company does not own in excess of 50% of the equity interests.  All intercompany
transactions  are  eliminated in  consolidation.  The minority  interests in the
earnings of these limited  partnerships  are removed from net income and are not
included in the calculation of earnings per share.

Income Taxes
------------

         Financial  Accounting Standards Board Statement No. 109, Accounting for
Income Taxes  requires,  among other things,  recognition of future tax benefits
measured at enacted  rates  attributable  to  deductible  temporary  differences
between  financial  statement and income tax bases of assets and liabilities and
to tax net  operating  loss and tip  credit  carryforwards  to the  extent  that
realization of said benefits is more likely than not. For  discussion  regarding
the  Company's  carryforwards  refer  to  Note 7 to the  consolidated  financial
statements for fiscal 2005.

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

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

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

                                       38
<PAGE>

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

         The Company does not ordinarily hold market risk sensitive  instruments
for trading purposes,  but as of October 1, 2005 holds one equity security, at a
cost of  $303,000,  for  dividend  payments.  Even if the  price  of the  equity
securities  decreased  by 10% below its cost,  results  of  operations  would be
reduced by $30,000, an amount management considers immaterial.

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

         At October 1, 2005, the Company has two debt arrangements  which have a
variable  interest  rate.  For one of these  instruments,  a mortgage  note, the
Company has entered into an interest  rate swap  agreement to hedge the interest
rate risk. The mortgage note has an outstanding  principal balance at October 1,
2005 of $813,000. For the other instrument,  an unsecured promissory note in the
principal amount of $100,000, the variable interest rate is at prime, so even if
interest rates increased by 10%,  results of operations would be reduced by less
than $10,000, an amount management also considers immaterial.

            At October 1, 2005,  the Company's  cash  resources earn interest at
variable rates. Accordingly,  the Company's return on these funds is affected by
fluctuations  in interest  rates.  Any  decrease  in interest  rates will have a
negative effect on the Company's earnings.

         There is no assurance  that  interest  rates will  increase or decrease
over the next fiscal year.


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

         Financial statements of the Company at October 1, 2005, October 2, 2004
and  September  27,  2003,  which  include each of the three years in the period
ended October 1, 2005 and the independent  certified public  accountants' report
thereon, are included herein.

Item 9A. Controls and Procedures.
--------------------------------

(a)  Evaluation of Disclosure Controls and Procedures

         Within the ninety  (90) day  period  prior to the end of the  reporting
period,  our Chief Executive  Officer and Chief Financial Officer have, with the
participation  of management and the  assistance of an  independent  third party
expert retained during fiscal 2005,  evaluated the  effectiveness  of the design
and operation of the Company's  "disclosure controls and procedures" (as defined
in the  Securities  Exchange  Act of 1934  ("Exchange  Act") Rule  13a-15(e)  or
15d-15(e))  as of October 1, 2005. It is the  conclusion of our Chief  Executive
Officer and Chief Financial Officer that such disclosure controls and procedures
operate such that  important  information  flows to  appropriate

                                       39
<PAGE>

collection  and  disclosure  points  in a timely  manner  and are  effective  in
ensuring that material information is accumulated and communicated to management
and made  known to the  Chief  Executive  Officer  and Chief  Financial  Officer
particularly   during  the  period  in  which  this  report  was  prepared,   as
appropriate, to allow timely decisions regarding timely disclosure. In designing
and evaluating the disclosure  controls and  procedures,  management  recognizes
that any system of controls  and  procedures,  no matter how well  designed  and
operated,  is subject to limitations,  including the exercise of our judgment in
evaluating the same. As a result,  there can be no assurance that our disclosure
controls and procedures will prevent all errors.

(b)  Change in Internal Control over Financial Reporting

         During fiscal 2005, the Company  continued to assess the  effectiveness
of its  "internal  controls over  financial  reporting" on an account by account
basis  as a part of our  on-going  accounting  and  financial  reporting  review
process.  The assessments were made by management,  under the supervision of our
Chief Financial Officer.  During fiscal 2005, the Company filled a newly created
corporate  controller  position.  Otherwise,  the Company made no changes in its
internal  control over financial  reporting  during fiscal 2005 that  materially
affected,  or are reasonably likely to materially affect, the Company's internal
control over financial  reporting.  Notwithstanding,  the  effectiveness  of our
system of internal  control over financial  reporting is subject to limitations,
including  the exercise of our  judgment in  evaluating  the same.  As a result,
there can be no assurance  that our internal  control over  financial  reporting
will prevent all errors.

                                    PART III

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

         The information set forth under the caption  "Election of Directors" in
the  Company's  definitive  Proxy  Statement  for its  2006  Annual  Meeting  of
Shareholders,  filed with the  Securities  and Exchange  Commission  pursuant to
regulation  14A under the  Securities  and Exchange Act of 1934, as amended (the
2006 Proxy Statement),  is incorporated herein by reference. See also "Executive
Officers of the Registrant" included in Part I hereof.


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

         The information set forth in the 2006 Proxy Statement under the caption
"Executive Compensation" is incorporated by reference.


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

         The  information  set forth under the caption  "Security  Ownership  of
Certain  Beneficial  Owners  and  Management"  in the 2006  Proxy  Statement  is
incorporated by reference.

                                       40
<PAGE>

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

         The  information  set forth under the caption  "Election  of  Directors
-Certain  Relationships and Related Transactions" in the 2006 Proxy Statement is
incorporated by reference.


Item 14.  Principal Accountant Fees and Services.
-------------------------------------------------

         The information set forth in the 2006 Proxy Statement under the caption
"Audit Fee" and "All Other Fees" is incorporated by reference.

                                    PART IV

Item 15. 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 2005 or subsequent to year end.

                                Index to Exhibits
                                Item (15) (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).

                                       41
<PAGE>

(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).

(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

                                       42
<PAGE>

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.  (Item 14(a) (10)(y) of
Form 1--KSB dated September 29, 2001 is incorporated herein by reference.)

(10)(z)  Limited  Partnership  Agreement of CIC Investors #95, Ltd.,  dated July
2001,  between  Flanigan's  Enterprises,  Inc., as General  Partner and numerous
limited  partners,  including  Flanigan's  Enterprises,  Inc. as limited partner
owning twenty eight percent of the limited  partnership.(Item  14 (a) (10)(z) of
Form 10-KSB dated September 29, 2001 is incorporated herein by reference.)

(10)(aa)  Limited  Partnership  Agreement of CIC Investors #75, Ltd., dated June
17, 2003, between Flanigan's Enterprises, Inc., as General Partner, and numerous
limited  partners,  including  Flanigan's  Enterprises,  Inc. as limited partner
owning twelve percent of the limited partnership.

(10)(bb)  Limited  Partnership  Agreement of CIC Investors #65, Ltd., dated June
24, 2004, between Flanigan's Enterprises, Inc., as General Partner, and numerous
limited  partners,  including  Flanigan's  Enterprises,  Inc. as limited partner
owning twenty six percent of the limited partnership.

(13)  Registrant's  Form 10-K  constitutes the Annual Report to Shareholders for
the fiscal year ended October 1, 2005.

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

31.1     CERTIFICATION  PURSUANT TO 302 OF  SARBANES-OXLEY  ACT OF 2002 OF CHIEF
EXECUTIVE OFFICER

31.2     CERTIFICATION  PURSUANT TO 302 OF  SARBANES-OXLEY  ACT OF 2002 OF CHIEF
FINANCIAL OFFICER

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

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

                                       43
<PAGE>

                                   SIGNATURES

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


                            Flanigan's Enterprises, Inc.
                            Registrant

                            By: /s/ JAMES G. FLANIGAN II
                                ------------------------
                                JAMES G. FLANIGAN II
                                Chief Executive Officer
                                Date: 1/17/06



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

/s/ JAMES G. FLANIGAN II      Chairman of the Board,        Date: 1/17/06
----------------------        Chief Executor Officer,
James G. Flanigan II            and Director


/s/ JEFFREY D. KASTNER        Chief Financial Officer       Date: 1/17/06
----------------------        Secretary and Director
Jeffrey D. Kastner


/s/ MICHAEL ROBERTS           Director                      Date: 1/17/06
----------------------
MICHAEL ROBERTS


/s/ GERMAINE M. BELL          Director                      Date: 1/17/06
----------------------
Germaine M. Bell


/s/ CHARLES E. MCMANUS        Director                      Date: 1/17/06
----------------------
Charles E. McManus


/s/ AUGIE BUCCI               Chief Operating Officer       Date: 1/17/06
----------------------        and Director
Augie Bucci


/s/ MICHAEL B. FLANIGAN       Director                      Date: 1/17/06
----------------------
Michael B. Flanigan

                                       44
<PAGE>

/s/ PATRICK J. FLANIGAN       Director                      Date: 1/17/06
-----------------------
Patrick J. Flanigan

/s/ BARBARA J. KRONK          Director                      Date: 1/17/06
-----------------------
Barbara J. Kronk


                                       45
<PAGE>

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








                 FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                        CONSOLIDATED FINANCIAL STATEMENTS

             OCTOBER 1, 2005, OCTOBER 2, 2004 AND SEPTEMBER 27, 2003








================================================================================
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

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


                                                                         PAGE
                                                                         ----



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                  F-1


CONSOLIDATED FINANCIAL STATEMENTS

   Balance Sheets                                                        F-2

   Statements of Income                                                  F-3

   Statements of Stockholders' Equity                                    F-4

   Statements of Cash Flows                                              F-5

   Notes to Financial Statements                                      F-6 - F-30



<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
             -------------------------------------------------------


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

We have  audited the  accompanying  consolidated  balance  sheets of  Flanigan's
Enterprises,  Inc. and  Subsidiaries  as of October 1, 2005 and October 2, 2004,
and the related consolidated statements of income, stockholders' equity and cash
flows for each of the years in the  three-year  period  ended  October  1, 2005.
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 the standards of the Public  Company
Accounting Oversight Board (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.  The Company is not  required to
have,  nor were we engaged to perform,  an audit of its  internal  control  over
financial reporting.  Our audit included  consideration of internal control over
financial  reporting  as  a  basis  for  designing  audit  procedures  that  are
appropriate  in the  circumstances,  but not for the  purpose of  expressing  an
opinion on the  effectiveness  of the Company's  internal control over financial
reporting.  Accordingly,  we express  no such  opinion.  An audit also  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial   statements,   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 consolidated  financial statements referred to above present
fairly,  in all  material  respects,  the  consolidated  financial  position  of
Flanigan's Enterprises,  Inc. and Subsidiaries as of October 1, 2005 and October
2, 2004, and the  consolidated  results of their operations and their cash flows
for  each of the  years  in the  three-year  period  ended  October  1,  2005 in
conformity with accounting principles generally accepted in the United States.


                            RACHLIN COHEN & HOLTZ LLP


Fort Lauderdale, Florida
December 21, 2005

                                      F-1
<PAGE>
                        FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                                 CONSOLIDATED BALANCE SHEETS

                             OCTOBER 1, 2005 AND OCTOBER 2, 2004

<TABLE>
<CAPTION>
                                                                       2005           2004
                                                                       ----           ----
<S>                                                               <C>             <C>
                                 ASSETS
                                 ------
Current Assets:
    Cash and cash equivalents                                     $  2,674,000    $  2,936,000
    Investments                                                        353,000         328,000
    Notes and mortgages receivable, current maturities, net             16,000          25,000
    Other receivables                                                  189,000         271,000
    Inventories                                                      1,990,000       1,650,000
    Due from franchisees                                               119,000              --
    Prepaid expenses                                                   721,000         565,000
    Deferred tax assets                                                 29,000         114,000
                                                                  ------------    ------------
      Total current assets                                           6,091,000       5,889,000
                                                                  ------------    ------------

Property and Equipment                                              12,872,000      12,091,000
                                                                  ------------    ------------

Investment in Limited Partnership                                      122,000         124,000
                                                                  ------------    ------------

Other Assets:
    Liquor licenses, net                                               347,000         347,000
    Notes and mortgages receivable, net                                116,000         128,000
    Deferred tax assets                                                435,000         368,000
    Other                                                              861,000         827,000
                                                                  ------------    ------------
         Total other assets                                          1,759,000       1,670,000
                                                                  ------------    ------------
         Total assets                                             $ 20,844,000    $ 19,774,000
                                                                  ============    ============


                LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
    Accounts payable and accrued expenses                         $  3,211,000    $  2,824,000
    Due to franchisees                                                 493,000         767,000
    Current portion of long-term debt                                  174,000          97,000
    Deferred gain                                                       62,000          70,000
                                                                  ------------    ------------
         Total current liabilities                                   3,940,000       3,758,000
                                                                  ------------    ------------

Long-Term Debt, Net of Current Maturities                            1,383,000       1,217,000
                                                                  ------------    ------------

Minority Interests in Equity of Consolidated Limited Partnership     5,248,000       4,698,000
                                                                  ------------    ------------

Commitments, Contingencies and Other Matters                                --              --

Stockholders' Equity:
    Common stock, $.10 par value; 5,000,000 shares authorized;
      4,197,642 shares issued                                          420,000         420,000
    Capital in excess of par value                                   6,148,000       6,147,000
    Retained earnings                                                9,472,000       8,974,000
    Accumulated other comprehensive income                              50,000          25,000
    Treasury stock, at cost, 2,323,047 and 2,280,817 shares         (5,817,000)     (5,465,000)
                                                                  ------------    ------------
         Total stockholders' equity                                 10,273,000      10,101,000
                                                                  ------------    ------------
         Total liabilities and stockholders' equity               $ 20,844,000    $ 19,774,000
                                                                  ============    ============
</TABLE>

                         See notes to consolidated financial statements

                                             F-2
<PAGE>
<TABLE>
<CAPTION>

                               FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                                     CONSOLIDATED STATEMENTS OF INCOME

                    YEARS ENDED OCTOBER 1, 2005, OCTOBER 2, 2004 AND SEPTEMBER 27, 2003

                                                                 2005            2004             2003
<S>                                                          <C>             <C>             <C>

Revenues:
    Restaurant food sales                                    $ 29,219,000    $ 26,347,000    $ 22,489,000
    Restaurant beverage sales                                   6,610,000       7,351,000       6,705,000
    Package goods sales                                        11,810,000      10,911,000       9,777,000
    Franchise-related revenues                                    984,000         958,000         904,000
    Owner's fee                                                   261,000         265,000         260,000
    Other operating income                                        148,000         101,000         118,000
                                                             ------------    ------------    ------------
                                                               49,032,000      45,933,000      40,253,000
                                                             ------------    ------------    ------------
Costs and Expenses:
    Cost of merchandise sold:
       Restaurants and lounges                                 12,502,000      12,002,000       9,978,000
       Package goods                                            8,436,000       7,870,000       7,136,000
    Payroll and related costs                                  13,636,000      12,523,000      11,423,000
    Occupancy costs                                             2,853,000       2,740,000       2,158,000
    Selling, general and administrative expenses                9,439,000       9,525,000       7,534,000
                                                             ------------    ------------    ------------
                                                               46,866,000      44,660,000      38,229,000
                                                             ------------    ------------    ------------

Income from Operations                                          2,166,000       1,273,000       2,024,000
                                                             ------------    ------------    ------------

Other Income (Expense):
    Interest expense                                             (116,000)       (136,000)       (140,000)
    Minority interests in earnings of consolidated
       limited partnerships                                      (403,000)       (301,000)       (599,000)
    Interest income                                                48,000          56,000          45,000
    Limited partnership income                                     18,000           6,000          20,000
    Other income                                                   58,000          79,000          80,000
    Loss on abandonment of property and equipment                (121,000)       (367,000)             --
                                                             ------------    ------------    ------------
                                                                 (516,000)       (663,000)       (594,000)
                                                             ------------    ------------    ------------

Income Before Provision for Income Taxes                        1,650,000         610,000       1,430,000
                                                             ------------    ------------    ------------

Provision for Income Taxes:
    Current                                                       525,000         332,000         375,000
    Deferred                                                       18,000        (162,000)        167,000
                                                             ------------    ------------    ------------
                                                                  543,000         170,000         542,000
                                                             ------------    ------------    ------------

Net Income                                                   $  1,107,000    $    440,000    $    888,000
                                                             ============    ============    ============

Net Income Per Common Share:
    Basic                                                    $       0.58    $       0.23    $       0.46
                                                             ============    ============    ============
    Diluted                                                  $       0.58    $       0.23    $       0.45
                                                             ============    ============    ============

Weighted Average Shares and Equivalent Shares Outstanding:
    Basic                                                       1,895,000       1,922,000       1,926,000
                                                             ============    ============    ============
    Diluted                                                     1,923,000       1,933,000       1,955,000
                                                             ============    ============    ============

                              See notes to consolidated financial statements

                                                   F-3
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                            FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                                           CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                                 YEARS ENDED OCTOBER 1, 2005, OCTOBER 2, 2004 AND SEPTEMBER 27, 2003

                                                                                 Accumulated
                                      Common Stock      Capital in                 Other          Treasury Stock
                                                         Excess of    Retained  Comprehensive
                                    Shares     Amount    Par Value    Earnings     Income        Shares      Amount        Total
                                ----------- ----------- ----------- -----------  -----------  -----------  -----------  -----------
<S>                              <C>       <C>         <C>         <C>          <C>            <C>        <C>          <C>
Balance, September 28, 2002       4,197,642 $   420,000 $ 6,103,000 $ 8,747,000  $        --    2,271,172  $(5,313,000) $ 9,957,000

Year Ended September 27, 2003:
    Comprehensive income:
       Net income                        --          --          --     888,000           --           --           --      888,000
       Net unrealized gain on
        securities                       --          --          --          --       26,000           --           --       26,000
                                ----------- ----------- ----------- -----------  -----------  -----------  -----------  -----------
                                         --          --          --     888,000       26,000           --           --      914,000

    Dividends paid ($0.27 per
      share)                             --          --          --    (520,000)          --           --           --     (520,000)
                                ----------- ----------- ----------- -----------  -----------  -----------  -----------  -----------

Balance, September 27, 2003       4,197,642     420,000   6,103,000   9,115,000       26,000    2,271,172   (5,313,000)  10,351,000
                                ----------- ----------- ----------- -----------  -----------  -----------  -----------  -----------

Year Ended October 2, 2004:
    Comprehensive income:
       Net income                        --          --          --     440,000           --           --           --      440,000
       Net unrealized loss on
         securities                      --          --          --          --       (1,000)          --           --       (1,000)
                                ----------- ----------- ----------- -----------  -----------  -----------  -----------  -----------
                                         --          --          --     440,000       (1,000)          --           --      439,000

    Purchase of treasury stock           --          --          --          --           --       30,400     (201,000)    (201,000)
    Exchange of shares -
      exercise of stock options          --          --      44,000          --           --      (20,755)      49,000       93,000
    Dividends paid ($0.30 per
      share)                             --          --          --    (581,000)          --           --           --     (581,000)
                                ----------- ----------- ----------- -----------  -----------  -----------  -----------  -----------

Balance, October 2, 2004          4,197,642     420,000   6,147,000   8,974,000       25,000    2,280,817   (5,465,000)  10,101,000

Year Ended October 1, 2005:
    Comprehensive income:
       Net income                        --          --          --   1,107,000           --           --           --    1,107,000
       Net unrealized gain on
        securities                       --          --          --          --       25,000           --           --       25,000
                                ----------- ----------- ----------- -----------  -----------  -----------  -----------  -----------
                                         --          --          --   1,107,000       25,000           --           --    1,132,000

    Purchase of treasury stock           --          --          --          --           --       42,720     (353,000)    (353,000)
    Exchange of shares -
      exercise of stock options          --          --       1,000          --           --         (490)       1,000        2,000
    Dividends paid ($0.32 per
      share)                             --          --          --    (609,000)          --           --           --     (609,000)
                                ----------- ----------- ----------- -----------  -----------  -----------  -----------  -----------

Balance, October 1, 2005          4,197,642 $   420,000 $ 6,148,000 $ 9,472,000  $    50,000    2,323,047  $(5,817,000) $10,273,000
                                =========== =========== =========== ===========  ===========  ===========  ===========  ===========

                                           See notes to consolidated financial statements

                                                                F-4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                                     FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                                         CONSOLIDATED STATEMENTS OF CASH FLOWS

                          YEARS ENDED OCTOBER 1, 2005, OCTOBER 2, 2004 AND SEPTEMBER 27, 2003



                                                                                 2005           2004          2003
                                                                                 ----           ----          ----
<S>                                                                          <C>            <C>            <C>

Cash Flows from Operating Activities:
   Net income                                                                $ 1,107,000    $   440,000    $   888,000
   Adjustments to reconcile net income to net cash provided by
     operating activities:
       Depreciation and amortization                                           1,543,000      1,545,000      1,187,000
       Loss on abandonment of property and equipment                             121,000        367,000             --
       Deferred income taxes                                                      18,000       (162,000)       167,000
       Minority interests in earnings of consolidated limited partnerships       403,000        301,000        599,000
       Recognition of deferred revenues                                           (8,000)            --         (5,000)
       Limited partnership income                                                (18,000)        (6,000)       (20,000)
       Changes in operating assets and liabilities:
         (Increase) decrease in:
           Due from franchisees                                                 (119,000)            --        140,000
           Other receivables                                                      82,000        106,000         84,000
           Inventories                                                          (340,000)      (288,000)        60,000
           Prepaid expenses                                                     (156,000)       316,000       (346,000)
           Refundable deposit, major supplier                                         --         77,000        902,000
           Other assets                                                          (82,000)      (359,000)       199,000
         Increase (decrease) in:
           Accounts payable and accrued expenses                                 387,000        716,000        203,000
           Due to franchisees                                                   (274,000)       358,000        360,000
                                                                             -----------    -----------    -----------
             Net cash provided by operating activities                         2,664,000      3,411,000      4,418,000
                                                                             -----------    -----------    -----------

Cash Flows from Investing Activities:
   Collections on notes and mortgages receivable                                  21,000         19,000         80,000
   Purchase of property and equipment                                         (2,095,000)    (1,532,000)    (3,028,000)
   Proceeds from redemption of certificate of deposit                                 --        354,000             --
   Investment in certificate of deposit                                               --             --         (4,000)
   Investment in marketable securities                                                --       (144,000)      (159,000)
   Deposit on investment                                                              --             --       (188,000)
   Distributions from unconsolidated limited partnership                          20,000         14,000         30,000
                                                                             -----------    -----------    -----------
             Net cash used in investing activities                            (2,054,000)    (1,289,000)    (3,269,000)
                                                                             -----------    -----------    -----------

Cash Flows from Financing Activities:
   Payments of long-term debt                                                   (309,000)      (278,000)      (346,000)
   Proceeds from long-term debt                                                  250,000             --             --
   Distributions to limited partnerships' minority partners                   (1,218,000)    (1,131,000)      (987,000)
   Proceeds from limited partnership interests                                 1,365,000      1,325,000      1,148,000
   Purchase of treasury stock                                                   (353,000)      (201,000)            --
   Dividends paid                                                               (609,000)      (581,000)      (520,000)
   Proceeds from exercise of stock options                                         2,000         93,000             --
                                                                             -----------    -----------    -----------
             Net cash used in financing activities                              (872,000)      (773,000)      (705,000)
                                                                             -----------    -----------    -----------

Net Increase (Decrease) in Cash and Cash Equivalents                            (262,000)     1,349,000        444,000

Cash and Cash Equivalents, Beginning                                           2,936,000      1,587,000      1,143,000
                                                                             -----------    -----------    -----------

Cash and Cash Equivalents, Ending                                            $ 2,674,000    $ 2,936,000    $ 1,587,000
                                                                             ===========    ===========    ===========


Supplemental Disclosure of Cash Flow Information:
   Cash paid during the year for:
     Interest                                                                $   115,649    $   136,000    $   140,000
                                                                             ===========    ===========    ===========
     Income taxes                                                            $   225,000    $   173,000    $   425,000
                                                                             ===========    ===========    ===========

   Non-Cash Financing and Investing Activities:
     Purchase of vehicles in exchange for debt                               $   302,000    $        --    $        --
                                                                             ===========    ===========    ===========

                                    See notes to consolidated financial statements

</TABLE>

                                                         F-5
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

             OCTOBER 1, 2005, OCTOBER 2, 2004 AND SEPTEMBER 27, 2003

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. Restaurant food and beverage
             sales make up the  majority of total  revenue.  At October 1, 2005,
             the Company owned and operated two full-service  restaurants,  five
             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 seven limited  partnerships  as general  partner.  The
             Company owns 100% of one of the limited partnerships as a result of
             an eminent  domain action (see Note 5). 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.  Fiscal  years  2005  and 2003 are each
             comprised of a 52-week period,  while fiscal year 2004 is comprised
             of a 53-week period.

         Principles of Consolidation

             The consolidated  financial  statements include the accounts of the
             Company and its  subsidiaries,  all of which are wholly owned,  and
             the accounts of the seven limited partnerships in which the Company
             acts  as  general  partner  and  has  controlling  interests.   All
             significant  intercompany   transactions  and  balances  have  been
             eliminated in consolidation.

         Use of Estimates

             The consolidated  financial  statements and related disclosures are
             prepared in conformity with U.S. accounting principles.  Management
             is  required  to make  estimates  and  assumptions  that affect the
             reported  amounts  of assets and  liabilities,  the  disclosure  of
             contingent  assets  and  liabilities  at the date of the  financial
             statements,  and revenue and expenses  during the period  reported.
             These  estimates  include  assessing the estimated  useful lives of
             tangible assets and liability  reserves for personal injury claims.
             Estimates and assumptions are reviewed periodically and the effects
             of revisions  are  reflected  in the  financial  statements  in the
             period  they  are  determined  to  be  necessary.   Although  these
             estimates are based on management's knowledge of current events and
             actions it may undertake in the future,  they may ultimately differ
             from actual results.

                                      F-6
<PAGE>
                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         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.

         Investments

             In accordance with Statement of Financial  Accounting Standards No.
             115,  "Accounting  for Certain  Debt and Equity  Securities"  (SFAS
             115),  securities are  classified  into three  categories:  held-to
             maturity, available-for-sale, and trading.

             The   Company's    marketable    securities   are   classified   as
             available-for-sale,  which  means they may be sold in  response  to
             changes in interest rates, liquidity needs, and for other purposes.
             Available-for-sale securities are reported at fair value.

             Unrealized  holding gains and losses are excluded from earnings and
             reported,  net of any income tax effect, as a separate component of
             stockholders'  equity.  Realized  gains and losses are  reported in
             earnings based on the adjusted cost of the specific security sold.

         Inventories

             Inventories,  which consist  primarily of package liquor  products,
             are stated at the lower of average cost or market.

         Liquor Licenses

             In accordance with Statement of Financial  Accounting Standards No.
             142,  "Goodwill and Other  Intangible  Assets"  (SFAS 142),  liquor
             licenses are no longer being amortized, but are tested annually for
             impairment (see Note 6).

         Property and Equipment

             Property and equipment are stated at cost.  Expenditures  for major
             improvements  are  capitalized.  Depreciation  commences  when  the
             assets are placed in service. Maintenance and repairs, which do not
             improve or extend the life of the respective assets, are charged to
             expense as incurred.  Upon disposal of assets, the cost and related
             accumulated depreciation are removed from the accounts and any gain
             or loss is  included  in  income.  Depreciation  is  recorded  on a
             straight-line   basis  over  the  estimated  useful  lives  of  the
             respective assets.

             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 term of the lease up to
             a maximum of 15 years.  Leasehold  improvements are currently being
             amortized  over the life of the lease up to a maximum  of 20 years.
             The office building and building improvements are being depreciated
             over forty years.

                                      F-7
<PAGE>
                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         Investment in Limited Partnerships

             The Company uses the  consolidation  method of accounting  when the
             Company has a controlling  interest in other  companies and limited
             partnerships. The Company uses the equity method of accounting when
             the  Company  has an interest  between  twenty to fifty  percent in
             other  companies  and limited  partnerships,  but does not exercise
             control. 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,
             investments and notes and mortgages receivable.

         Cash and Cash Equivalents

             From time to time  during the year,  the  Company  had  deposits in
             financial  institutions in excess of the federally  insured limits.
             At October 1, 2005, the Company had deposits in excess of federally
             insured limits of approximately  $2,637,000.  The Company maintains
             its cash  with  high  quality  financial  institutions,  which  the
             Company believes limits these risks.

         Investments

             The  Company  maintains  an  investment  account  with a  financial
             institution  that is not insured by the FDIC.  These  funds,  which
             were invested in marketable  securities at October 1, 2005,  may be
             subject  to  insurance  by  SIPC,  Securities  Investor  Protection
             Corporation,  subject to various  limitations.  At October 1, 2005,
             approximately $147,000 was held in this account.

         Notes and Mortgages Receivable

             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.

         Major Supplier

             Throughout  fiscal  years  2005 and  2004,  the  Company  purchased
             substantially  all of its food  products  from its  major  supplier
             pursuant to a master  distribution  agreement  which  entitled  the
             Company  to  receive  certain  purchase   discounts,   rebates  and
             advertising  allowances.  Management  believes  that several  other
             alternative vendors are available, if necessary.

                                      F-8
<PAGE>
                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         Revenue Recognition

             The Company records  revenues from normal  recurring sales upon the
             sale of food and beverages and the sale of package 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 restaurant and generally  include payroll costs associated
             with the "new restaurant  openers" (a team of select  employees who
             travel  to new  restaurants  to  ensure  that  the  Company's  high
             standards  for  quality  are  met),  rent  and  promotional  costs.
             Pre-opening  costs are  expensed  as  incurred.  Pre-opening  costs
             incurred  for the fiscal  years ended  October 1, 2005,  October 2,
             2004 and September 27, 2003 were approximately  $416,000,  $315,000
             and $135,000, respectively.

         Advertising Costs

             Advertising  costs are  expensed  as  incurred.  Advertising  costs
             incurred for the years ended  October 1, 2005,  October 2, 2004 and
             September  27,  2003  were  approximately  $375,000,  $319,000  and
             $296,000, 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, investments, notes and mortgages
             receivable,  other  receivables,   accounts  payables  and  accrued
             expenses.  Fair values were assumed to approximate  carrying values
             for those financial instruments,  which are short-term in nature or
             are receivable or payable on demand.

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

         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 variable  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
             October 1, 2005,  a hedging  relationship  existed for the mortgage
             obligation described in Note 8.

                                      F-9
<PAGE>
                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         Income Taxes

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

         Comprehensive Income

             The Company  reports  comprehensive  income in accordance  with the
             Statement of  Financial  Accounting  Standard  No. 130,  "Reporting
             Comprehensive  Income"  ("SFAS 130").  This  statement  establishes
             standards for the reporting and display of comprehensive income and
             its  components  in  a  full  set  of   general-purpose   financial
             statements.  Comprehensive  income generally represents all changes
             in stockholders' equity during the year except those resulting from
             investments by, or distributions to, stockholders.

         Stock-Based Compensation

             Statement   of   Financial   Accounting   Standards   No.   123(R),
             "Share-Based Payment",  issued in December, 2004, revised Statement
             of  Financial   Accounting   Standards  No.  123,  "Accounting  for
             Stock-Based  Compensation"  and  requires  companies to expense the
             fair value of stock  options on the grant date and is effective for
             interim  or annual  periods  beginning  after  December  15,  2005.
             Accordingly,  the  Company is  required  to  recognize  the expense
             attributed to stock options granted or vested subsequent to January
             1, 2006.

             The  Company  has adopted  the  disclosure-only  provision  of SFAS
             123(R) until January 2006.

             Had compensation  cost for the options been determined based on the
             fair value at the grant date during  fiscal  years  2005,  2004 and
             2003, consistent with SFAS 123, the Company's net income would have
             been as follows:
<TABLE>
<CAPTION>
                                                             2005           2004           2003
                                                             ----           ----           ----
<S>                                                      <C>            <C>            <C>
             Net income, as reported                     $ 1,107,000    $   440,000    $   888,000
             Deduct:  Total stock-based employee
                compensation expense determined
                under fair value based method for
                all awards, net of related tax effects       (88,000)       (25,000)       (52,000)
                                                         -----------    -----------    -----------

             Pro forma net income                        $ 1,019,000    $   415,000    $   836,000
                                                         ===========    ===========    ===========
</TABLE>

                                      F-10
<PAGE>
                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         Stock-Based Compensation (Continued)
                                       2005         2004        2003
                                       ----         ----        ----
             Earnings Per Share:
                Basic:
                   As reported         $0.58       $0.23       $0.46
                   Pro forma           $0.54       $0.22       $0.43
                Diluted:
                   As reported         $0.58       $0.23       $0.45
                   Pro forma           $0.53       $0.21       $0.43

             The  Company  used  the  Black-Scholes   option-pricing   model  to
             determine  the fair value of grants made in 2004.  For  purposes of
             disclosure,  the  estimated  fair  value of the  options  are being
             amortized to expense over the options  vesting  period of one year.
             The following assumptions were applied in determining the pro forma
             compensation cost:
                                                                   2004
                                                                   ----

              Risk Free Interest Rate                              3.1%
              Expected Dividend Yield                              5.0%
              Expected Option Life                              5 years
              Expected Stock Price Volatility                       24%

         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 determine the fair value of the asset by making an estimate of
             expected  future  cash  flows  over  the  remaining  lives  of  the
             respective  assets and  compare  that fair value with the  carrying
             value  of  the  assets  in  measuring  their   recoverability.   In
             determining  the  expected  future cash  flows,  the assets will be
             grouped at the lowest level for which there are cash flows,  at the
             individual store level.

         Reclassifications

             Certain  amounts in the prior year financial  statements  have been
             reclassified  to conform to the  presentation of the 2005 financial
             statements.

                                      F-11
<PAGE>
                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         Recently Issued Accounting Pronouncements

             In May 2005, the FASB issued SFAS No. 154,  "Accounting for Changes
             and Error Corrections, a Replacement of APB Opinion No. 20 and FASB
             Statement  No. 3" SFAS 154  applies  to all  voluntary  changes  in
             accounting  principle  and requires  retrospective  application  to
             prior  periods'  financial  statements  of  changes  in  accounting
             principle.   This   statement   also  requires  that  a  change  in
             depreciation,  amortization,  or depletion  method for  long-lived,
             non-financial  assets be  accounted  for as a change in  accounting
             estimate  effected by a change in  accounting  principle.  SFAS 154
             carries  forward  without change the guidance  contained in Opinion
             No.  20 for  reporting  the  correction  of an error in  previously
             issued  financial  statements and a change in accounting  estimate.
             This statement is effective for accounting  changes and corrections
             of errors made in fiscal years  beginning  after December 15, 2005.
             The Company does not expect the adoption of this standard to have a
             material impact on its financial condition,  results of operations,
             or liquidity.

             In March 2005, the Financial Accounting Standards Board issued FASB
             Interpretation No. 47, "Accounting for Conditional Asset Retirement
             Obligations,  an  Interpretation  of FASB  Statement No. 143." This
             Interpretation clarifies that the term conditional asset retirement
             obligation  refers  to a  legal  obligation  to  perform  an  asset
             retirement  activity  in  which  the  timing  and  (or)  method  of
             settlement are conditional on a future event that may or may not be
             within  the  control  of the  entity.  Accordingly,  an  entity  is
             required  to  recognize  a  liability  for  the  fair  value  of  a
             conditional  asset  retirement  obligation if the fair value can be
             reasonably  estimated.  This  Interpretation  is effective no later
             than the end of fiscal years ending  after  December 15, 2005.  The
             Company  does not expect the  adoption  of this  standard to have a
             material impact on its financial condition,  results of operations,
             or liquidity.

             In December  2004,  the FASB issued  SFAS No. 123  (revised  2004),
             "Share-Based  Payment."  SFAS No.  123(R) is a revision of SFAS No.
             123, "Accounting for Stock-Based  Compensation," and supersedes APB
             Opinion  No.  25,  "Accounting  for  Stock  Issued  to  Employees."
             Statement No. 123(R) will require the fair value of all stock based
             awards  issued to  employees  to be recorded as an expense over the
             related vesting period. The statement also requires the recognition
             of  compensation  expense for the fair value of any unvested  stock
             based awards  outstanding  at the date of adoption.  This statement
             becomes  effective  the  beginning  of the first  interim or annual
             reporting  period that  begins  after  December  15,  2005.  We are
             currently  evaluating  the impact on our results from adopting SFAS
             No. 123(R).

             In December  2004,  the FASB issued  SFAS No.  153,  "Exchanges  of
             Non-monetary  Assets, an Amendment of APB Opinion No. 29." SFAS No.
             153 requires  exchanges of productive assets to be accounted for at
             fair value,  rather than at carryover basis, unless (1) neither the
             asset received nor the asset  surrendered  has a fair value that is
             determinable  within reasonable limits or (2) the transactions lack
             commercial substance.  This Statement is effective for non-monetary
             asset  exchanges  occurring in fiscal periods  beginning after June
             15, 2005. The Company does not expect the adoption of this standard
             to have a material  impact on its financial  condition,  results of
             operations, or liquidity.

                                      F-12
<PAGE>
                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         Recently Issued Accounting Pronouncements (Continued)

             In December 2003, the Financial  Accounting  Standards Board issued
             FASB Interpretation Number 46-R "Consolidation of Variable Interest
             Entities."  FIN  46-R,  which  modifies   certain   provisions  and
             effective  dates  of FIN 46,  sets for the  criteria  to be used in
             determining  whether an  investment in a variable  interest  entity
             should be  consolidated.  These provisions are based on the general
             premise that if a company controls another entity through interests
             other than voting  interests,  that company should  consolidate the
             controlled  entity.  The adoption of this  statement did not have a
             significant  impact of the Company's  financial position or results
             of operations.

             In May 2003, the Financial  Accounting  Standards Board issued SFAS
             No.  150,  "Accounting  for  Certain  Financial   Instruments  with
             Characteristics  of Both  Liabilities  and  Equity."  SFAS No.  150
             affects the  issuer's  accounting  for three types of  freestanding
             financial  instruments.  One type is mandatorily redeemable shares,
             which the issuing  company is obligated to buy back in exchange for
             cash or other assets. A second type, which includes put options and
             forward  purchase  contracts,  involves  instruments that do or may
             require the issuer to buy back some of its shares in  exchange  for
             cash or other  assets.  The third type of  instrument  consists  of
             obligations that can be settled with shares,  the monetary value of
             which is fixed,  tied solely or predominantly to a variable such as
             a market index, or varies  inversely with the value of the issuers'
             shares.  SFAS No.  150 does not  apply to  features  embedded  in a
             financial instrument that is not a derivative in its entirety. SFAS
             No.  150  also  requires  disclosures  about  alternative  ways  of
             settling  the  instruments  and the capital  structure of entities,
             whose shares are  mandatorily  redeemable.  Most of the guidance in
             SFAS No. 150 is effective  for all  financial  instruments  entered
             into or modified  after May 31,  2003,  and  otherwise is effective
             from the start of the first interim period beginning after June 15,
             2003. The adoption of this standard did not have a material  impact
             on the Company's results of operations or financial position.

             In April 2003, the Financial Accounting Standards Board issued SFAS
             No. 149,  "Amendment  of Statement  133 on  Derivative  Instruments
             Hedging Activities." This statement amends and clarifies accounting
             for   derivative   instruments,    including   certain   derivative
             instruments embedded in other contracts, and for hedging activities
             under SFAS No. 133. SFAS No. 149 became effective during the fourth
             quarter of fiscal  2003 and did not have a  material  impact on the
             Company's results of operations or financial position.

                                      F-13
<PAGE>
                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)


NOTE 2.  INVESTMENTS

         Cost and fair value of investments available for sale are as follows:

                                                               2005       2004
                                                               ----       ----

         Cost - equity instruments                           $303,000   $303,000
         Gross unrealized gains                                50,000     25,000
                                                             --------   --------
         Total                                               $353,000   $328,000
                                                             ========   ========

         All funds are invested in marketable securities of one entity


NOTE 3.  NOTES AND MORTGAGES RECEIVABLE

         Receivables,  net of allowances for uncollectible  amounts,  consist of
         the following at October 1, 2005 and October 2, 2004:
<TABLE>
<CAPTION>
                                                                                      2005       2004
                                                                                      ----       ----
<S>                              <C>                                               <C>        <C>
         Notes and mortgages receivable from unrelated parties, bearing interest
            at rates ranging from 10.5% to 15% and due in varying
            installments through 2013                                              $ 51,000   $ 60,000

         Notes and mortgages  receivable from related parties,  bearing interest
            at rates ranging from 10% to 14% and due in varying installments
            through 2007                                                             81,000     93,000
                                                                                   --------   --------
                                                                                    132,000    153,000
         Current portion                                                             16,000     25,000
                                                                                   --------   --------
                                                                                   $116,000   $128,000
                                                                                   ========   ========
</TABLE>

         The majority of the notes and mortgages  receivable  represent  amounts
         owed to the  Company  for store  operations  which were sold.  Unless a
         significant  amount of cash is received on the sale, a pro rata portion
         of the gain is deferred  and  recognized  only as payments on the notes
         and  mortgages  are  received  by the  Company.  Any losses on sales of
         stores are recognized currently.  Approximately $8,000 of deferred gain
         was  recognized  on  collections  of such notes  receivable  during the
         fiscal year ended  October 1, 2005,  $6,000 and $5,000 were  recognized
         during the fiscal years ended  October 2, 2004 and  September 27, 2003,
         respectively.

         Future scheduled payments on the receivables at October 1, 2005 consist
         of the following:

          2006                                          $ 16,000
          2007                                            71,000
          2008                                                 -
          2009                                                 -
          2010                                                 -
          Thereafter                                      45,000
                                                        --------
                                                        $132,000

                                      F-14
<PAGE>
                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)


NOTE 4.  PROPERTY AND EQUIPMENT
                                                            2005         2004
                                                            ----         ----

         Furniture and equipment                         $ 7,367,000 $ 7,436,000
         Leasehold interests and improvements             13,054,000  12,016,000
         Land and land improvements                        1,024,000   1,013,000
         Building and improvements                         1,168,000   1,159,000
         Vehicles                                            585,000     247,000
         Construction in progress                            260,000     133,000
                                                         ----------- -----------
                                                          23,458,000  22,004,000
         Less accumulated depreciation and amortization   10,586,000   9,913,000
                                                         ----------- -----------
                                                         $12,872,000 $12,091,000
                                                         =========== ===========

NOTE 5.  INVESTMENTS IN LIMITED PARTNERSHIPS

         The  Company  has  determined  that  all  but one  limited  partnership
         discussed  below  should  be  consolidated  by  virtue  of  control  as
         evidenced by general  partnership  interests held by the Company.  As a
         result, the accompanying  consolidated financial statements reflect the
         limited  partnerships  in which the Company  has a general  partnership
         interest on a consolidated  basis. The remaining limited partnership in
         which  the  Company  does  not have  control  has  been  accounted  for
         utilizing the equity method.

         Beginning  with the limited  partnership  which owns the  restaurant in
         Surfside,  Florida and for all limited  partnerships  formed subsequent
         thereto for the purpose of owning and operating a restaurant  under the
         "Flanigan's  Seafood Bar and Grill"  servicemark,  a standard financial
         arrangement has been used in each limited partnership agreement.  Under
         this financial arrangement,  until the limited partnership has received
         an  aggregate  sum  equal  to the  initial  investment  of all  limited
         partners from the net profit from the operation of the restaurant,  the
         limited  partnership  receives  an  aggregate  sum  equal to 25% of the
         initial  investment of all limited  partners first each year,  with any
         additional net profit divided equally  between the Company,  as manager
         of the  restaurant,  and the  limited  partnership.  Once  the  limited
         partnership  has  received  an  aggregate  sum  equal  to  the  initial
         investment  of all  limited  partners  from  the net  profit  from  the
         operation of the restaurant,  the net profit is divided equally between
         the Company, as manager of the restaurant, and the limited partnership.
         As of October  1, 2005,  only the  limited  partnership  which owns the
         restaurant  in Kendall,  Florida has received an aggregate sum equal to
         the initial investment of all limited partners from the net profit from
         the operation of the restaurant and the Company receives one-half (1/2)
         of the net profit as manager of the  restaurant.  The Company  plans to
         continue forming limited partnerships to raise funds to own and operate
         restaurants  under the "Flanigan's  Seafood Bar and Grill"  servicemark
         using the same financial arrangement.

                                      F-15
<PAGE>
                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)


NOTE 5.  INVESTMENTS IN LIMITED PARTNERSHIPS (Continued)

         Pinecrest, Florida

             The  Company  operated a  restaurant  in Miami,  Florida  under the
             "Flanigan's  Seafood  Bar  and  Grill"  servicemark  pursuant  to a
             limited partnership  agreement.  The Company is the general partner
             and had a fifty percent limited partnership  interest.  The Company
             closed the  restaurant in the second quarter of 2002 as a result of
             an eminent domain action. The partnership  received $700,000 in the
             eminent domain action and the unrelated  limited  partner  received
             $350,000 in full settlement of their interest.  As of September 28,
             2002, the Company and a wholly owned subsidiary control 100% of the
             limited partnership.

             During the third  quarter  of fiscal  year 2003,  the  Company,  as
             general partner of the limited partnership,  entered into a Sale of
             Business  Agreement  for the purchase of an existing  restaurant in
             Pinecrest,  Florida.  The purchase price of approximately  $340,000
             related  to the  acquisition  of a  below  market  lease  and  will
             therefore  be  recognized  as  additional  lease  expense  over the
             remaining  life  of the  lease  once  operation  of the  restaurant
             commences.  As of October 1, 2005,  the $340,000 is included in the
             accompanying balance sheet in other assets.

             During the first  quarter  of fiscal  year 2004,  the  Company,  as
             general  partner  of  the  limited   partnership,   closed  on  the
             transaction with the Company agreeing to  unconditionally  guaranty
             the lease for the  business  premises  (see Note 9), as required by
             the landlord in order to procure its consent to the  assignment  of
             the  lease.   This  entity  is  consolidated  in  the  accompanying
             financial statements.

             The  limited  partnership  plans  to  raise  equity  funds  in  the
             approximate  amount of  $3,200,000  to renovate  the  premises  and
             provide working capital to begin operations. The Company expects to
             retain a 33% limited partnership  interest at a minimum, as well as
             its general partnership interest.  The Company anticipates that the
             restaurant  will open no sooner  than the third  quarter  of fiscal
             2006.

         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.   This  entity  is  consolidated  in  the   accompanying
             financial statements.

                                      F-16
<PAGE>
                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 5.  INVESTMENTS IN LIMITED PARTNERSHIPS (Continued)

         Kendall, Florida

             The Company  owns 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. The Company
             is the general partner and has a forty percent limited  partnership
             interest.  As of April 1, 2003,  the limited  partners had received
             distributions from the limited  partnership equal to their original
             investment and pursuant to the limited partnership  agreement,  the
             Company  thereafter  receives  fifty percent of the net profit from
             the operation of the restaurant as a management fee. This entity is
             consolidated in the accompanying financial statements.

         West Miami, Florida

             The Company  owns 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 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.  This  entity is
             consolidated in the accompanying financial statements.

         Weston, Florida

             The Company  owns an  investment  in a limited  partnership,  which
             acquired,  renovated  and  now  operates  a  restaurant  under  the
             "Flanigan's Seafood Bar and Grill" servicemark in Weston,  Florida.
             The Company is the general  partner and has a twenty-eight  percent
             limited partnership interest. Other related parties, including, but
             not limited to,  officers  and  directors  of the Company and their
             families are also  investors.  This entity is  consolidated  in the
             accompanying financial statements.

         Stuart, Florida

             The Company  owns an  investment  in a limited  partnership,  which
             acquired,  renovated  and  now  operates  a  restaurant  under  the
             "Flanigan's Seafood Bar and Grill" servicemark in Stuart,  Florida.
             The Company is the general partner and has a twelve percent limited
             partnership  interest.  Other related parties,  including,  but not
             limited  to,  officers  and  directors  of the  Company  and  their
             families are also  investors.  This entity is  consolidated  in the
             accompanying financial statements.

                                      F-17
<PAGE>
                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 5.  INVESTMENTS IN LIMITED PARTNERSHIPS (Continued)

         Wellington, Florida

             During  fiscal  year 2005,  the  Company  made an  investment  in a
             limited partnership,  which renovated and now operates a restaurant
             under  the  "Flanigan`s  Seafood  Bar  and  Grill"  servicemark  in
             Wellington,  Florida. The restaurant opened for business on May 27,
             2005.  The  Company  is the  general  partner  and has a twenty six
             percent  limited  partnership  interest.   Other  related  parties,
             including but not limited to, officers and directors of the Company
             and their  families  are also  investors.  The Company had incurred
             approximately  $191,000 of construction  costs  associated with the
             new location on behalf of the limited partnership, which costs were
             repaid. The limited  partnership,  in a private  placement,  raised
             $1,850,000 of investment capital as of October 1, 2005. This entity
             is consolidated in the accompanying financial statements.

         Fort Lauderdale, Florida

             The Company has a franchise  agreement  with a limited  partnership
             which  owns a  restaurant  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.  This entity is
             reported  using the  equity  method in the  accompanying  financial
             statements.

             The  following  is  a  summary  of  condensed  unaudited  financial
             information   pertaining  to  the  Company's  limited   partnership
             investment in Fort Lauderdale, Florida:

                                             2005        2004         2003
                                             ----        ----         ----
             Financial Position:
               Current assets            $   47,000   $  109,000   $   63,000
               Non-current assets           544,000      483,000      492,000
               Current liabilities          134,000      118,000       26,000
               Non-current liabilities       81,000       91,000       99,000

             Operating Results:
               Revenues                   2,111,000    2,244,000    2,165,000
               Gross profit               1,378,000    1,438,000    1,401,000
               Net income                    72,000       25,000      125,000

                                      F-18
<PAGE>
                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 6.  LIQUOR LICENSES

         The Company  stopped  amortizing  liquor  licenses  September 29, 2002.
         Liquor  licenses are tested for  impairment in September of each fiscal
         year.  The fair value of liquor  licenses at October 1, 2005,  exceeded
         the carrying amount; therefore, no impairment loss was recognized.  The
         fair  value of the liquor  licenses  was  evaluated  by  comparing  the
         carrying  value to recent  sales for  similar  liquor  licenses  in the
         County issued.  At October 1, 2005, the total carrying amount of liquor
         licenses  was  approximately  $347,000.  There were no liquor  licenses
         acquired in fiscal year 2005 which require capitalization.


NOTE 7.  INCOME TAXES

         The  components of the Company's  provision for income taxes for fiscal
         years 2005, 2004 and 2003 are as follows:

                                             2005         2004         2003
                                             ----         ----         ----
          Current:
             Federal                      $ 407,000    $ 252,000    $ 284,000
             State                          118,000       80,000       91,000
                                          ---------    ---------    ---------
                                            525,000      332,000      375,000
                                          ---------    ---------    ---------
          Deferred:
             Federal                         21,000     (146,000)     160,000
             State                           (3,000)     (16,000)       7,000
                                          ---------    ---------    ---------
                                             18,000     (162,000)     167,000
                                          ---------    ---------    ---------
                                          $ 543,000    $ 170,000    $ 542,000
                                          =========    =========    =========

         A reconciliation  of income tax computed at the statutory  federal rate
         to income tax expense is as follows:
<TABLE>
<CAPTION>
                                                            2005         2004         2003
                                                            ----         ----         ----
<S>                                                      <C>          <C>          <C>
         Tax provision at the statutory rate of 34%      $ 561,000    $ 207,000    $ 485,000
         State income taxes, net of federal income tax      76,000       40,000       43,000
         Tax benefit of tip credit generated              (118,000)    (125,000)     (99,000)
         Other                                             (24,000)     (48,000)     113,000
                                                         ---------    ---------    ---------
                                                         $ 543,000    $ 170,000    $ 542,000
                                                         =========    =========    =========
</TABLE>

         At October 1, 2005, the Company has available  alternative  minimum tax
         credit carryforwards of approximately $ 61,000, 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,  investments in limited  partnerships,
         and accruals for  potential  uninsured  claims  recorded for  financial
         reporting purposes but not recognized for tax purposes.

                                      F-19
<PAGE>
                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 7.  INCOME TAXES (Continued)

         The components of the deferred tax assets were as follows at October 1,
         2005 and October 2, 2004:

                                                               2005       2004
                                                               ----       ----

         Current:
            Tip credit carryforward                          $     --   $ 94,000
            Accruals for potential uninsured claims            29,000     20,000
                                                             --------   --------
                                                             $ 29,000   $114,000
                                                             ========   ========
         Long-Term:
            Book/tax differences in property and equipment   $351,000   $265,000
            Alternative minimum tax credit                     61,000     74,000
            Limited partnership investments                    23,000     29,000
                                                             --------   --------
                                                             $435,000   $368,000
                                                             ========   ========
<TABLE>
<CAPTION>

NOTE 8.  LONG-TERM DEBT
                                                                                           2005            2004
                                                                                           ----            ----
<S>                                                                                      <C>             <C>
             Mortgage payable to bank;  secured by first mortgage on a building;
             payable $1,594 per month, plus interest through maturity in August,
             2008, at which time the unpaid principal of approximately  $736,000
             plus unpaid  interest  becomes due. The Company has entered into an
             interest rate swap agreement for a notional amount of approximately
             $895,000.  The  interest  rate swap  agreement  hedges the variable
             interest rate of the mortgage payable to a fixed rate of 8.62%.
                                                                                         $813,000        $836,000

             Note  payable,  chattel  mortgage  secured by  general  assets of a
             limited  partnership,  bearing  interest at 8%, payable  monthly in
             installments  of principal  and interest of  approximately  $6,100.
             note pre-paid in
             full, with discount, in February 2005.                                            --         189,000

             Note  payable to bank by limited  partnership,  unsecured,  bearing
             interest at 6.5%, payable in monthly  installments of principal and
             interest of approximately $4,600, maturing in March 2008
                                                                                          127,000              --

             Mortgage payable,  secured by land, bearing interest at 8%; payable
             in monthly installments of principal and interest of approximately
             $3,000, maturing in April 2007.                                              275,000         289,000

             Notes  payable to bank,  secured by vehicles,  bearing  interest at
             0.9% payable in monthly  installments  of principal and interest of
             approximately $1,800 per month, maturing in October 2007.
                                                                                           46,000              --
</TABLE>

                                      F-20
<PAGE>
                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)
<TABLE>
<CAPTION>

NOTE 8.  LONG-TERM DEBT (Continued)
                                                                                           2005            2004
                                                                                           ----            ----
<S>                                                                                     <C>             <C>
             Note  payable  to finance  company,  secured  by  vehicle,  bearing
             interest  at  approximately   9.5%,   payable  monthly  in  monthly
             installments  of  principal  and interest of  approximately  $4,500
             through  maturity in July 2010, at which time the unpaid  principal
             of $45,000 becomes
             due.                                                                         227,000              --

             Note payable to bank,  unsecured,  bearing interest at prime (6.75%
             at October 1, 2005);  payable in monthly  installments of principal
             and interest of approximately $3,100 maturing in October 2007.
                                                                                           69,000              --
                                                                                       ----------      ----------

                                                                                        1,557,000       1,314,000
             Less current portion                                                         174,000          97,000
                                                                                       ----------      ----------
                                                                                       $1,383,000      $1,217,000
                                                                                       ==========      ==========

         Long-term debt at October 1, 2005 matures as follows:

             2006                                                                      $  174,000
             2007                                                                         431,000
             2008                                                                         829,000
             2009                                                                          43,000
             2010                                                                          80,000
                                                                                       ----------
                                                                                       $1,557,000
</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.

         Leases

             The Company leases a substantial  portion of the land and buildings
             used in its  operations  under leases with initial  terms  expiring
             between 2006 and 2049. Renewal options are available on many of the
             leases.  Most of the  leases  are  fixed  rent  agreements.  In two
             instances,  lease  rentals are subject to sales  overrides  ranging
             from 1.75% to 4% of annual  sales in excess of  between  $1,162,000
             and $1,200,000. Rent expense is recognized on a straight line basis
             over the term of the lease.  Certain  of the leases are  subject to
             fair  market  rental  appraisals  at the time of  renewal.  Certain
             properties are subleased through various expiration dates.

                                      F-21
<PAGE>
                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

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

         Leases (Continued)

             During the fourth quarter of fiscal year 2001, the Company  entered
             into a ground lease for an out parcel in  Hollywood,  Florida.  The
             Company constructed a building on the out parcel, one-half (1/2) of
             which is used by the Company for the operation of a package  liquor
             store and the other  one-half (1/2) was subleased by the Company as
             retail space during the second quarter of fiscal 2004. Rent for the
             retail space  commenced  January 1, 2005, and income of $31,400 was
             derived from this source during fiscal year ending October 1, 2005.

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

              2006                                         $ 2,337,000
              2007                                           2,165,000
              2008                                           2,021,000
              2009                                           1,974,000
              2010                                           1,801,000
              Thereafter                                     7,658,000
                                                           -----------
                 Total                                     $17,956,000
                                                           ===========

             Total rent  expense  for all  operating  leases  was  approximately
             $2,158,000,  $1,957,000 and  $1,632,000 in fiscal years 2005,  2004
             and 2003, respectively, and is included in "Occupancy costs" in the
             accompanying  consolidated  statements  of income.  This total rent
             expense is comprised of the following:
                                         2005         2004         2003
                                         ----         ----         ----

             Minimum                  $2,055,000   $1,856,000   $1,468,000
             Contingent                  103,000      101,000      164,000
                                      ----------   ----------   ----------
             Total                    $2,158,000   $1,957,000   $1,632,000
                                      ==========   ==========   ==========

             The Company  guarantees  various leases for franchisees.  Remaining
             rental  payments  required  under these leases total  approximately
             $2,970,000.

         Exercise of Option to Purchase

             During  the  fourth  quarter  of  fiscal  year  2004,  the  Company
             exercised an option to purchase contained in a Sublease  Agreement.
             The purchase  includes real property and the assignment of a ground
             lease for a small portion of the property. The Company has procured
             financing  for this  purchase.  The option to  purchase  contains a
             formula  whereby each party  retains an appraiser to determine  the
             "fair market value" for the purchase of the property and if the two
             appraisers  cannot agree upon the same,  then a third  appraiser is
             selected,  whose  determination  of  the  "fair  market  price"  is
             binding. During the fourth quarter of fiscal year 2005, the parties
             agreed upon a third  appraiser to determine the purchase  price. It
             is anticipated  that the  transaction  will close during the second
             quarter of fiscal year 2006.

                                      F-22
<PAGE>
                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

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

         Purchase Commitments

             Effective  December 1, 2005,  the Company  entered  into a purchase
             agreement  with  its  rib  supplier.  The  terms  of the  agreement
             stipulate that the Company will purchase  approximately  $3,280,000
             of baby back ribs  during the 2006  calendar  year at a fixed cost.
             The  Company  contracts  for the  purchase  of baby back ribs on an
             annual  basis to fix the cost and  ensure  adequate  supply for the
             calendar  year.  The Company  purchases  all of its rib supply from
             this vendor, but management believes that several other alternative
             vendors are available, if necessary.

         Franchise Program

             At October 1, 2005,  the Company was the  franchisor of seven units
             under franchise  agreements.  Of the seven franchised stores,  four
             are owned and  operated  by related  parties.  Under the  franchise
             agreements,  the  Company  agrees to provide  guidance,  advice and
             management assistance to the franchisees.  In addition, the Company
             acts as  fiscal  agent  for the  franchisees  whereby  the  Company
             collects all revenues and pays all expenses and distributions.  The
             Company also,  from time to time,  advances  funds on behalf of the
             franchisees  for the cost of  renovations.  The  resulting  amounts
             receivable  from and payable to these  franchisees are reflected in
             the accompanying consolidated balance sheet as either an asset or a
             liability.   The   Company   also  agrees  to  sponsor  and  manage
             cooperative  buying  groups on behalf  of the  franchisees  for the
             purchase  of  inventory.   The  franchise  agreements  provide  for
             royalties to the Company of  approximately  3% of gross sales.  The
             Company is not currently offering or accepting new franchises.

         Employment Agreement/Bonuses

             On December 31, 2004, the Company renewed the employment  agreement
             with its former Chief Executive  Officer,  Joseph G. Flanigan,  for
             calendar year 2005. The agreement provided, among other things, for
             a base annual salary not to exceed $150,000 and a performance bonus
             equal  to  20%  of  pre-tax  net  income  before  depreciation  and
             amortization in excess of $650,000, 10% of which is to be allocated
             to other members of management. The employment agreement terminated
             upon the death of Joseph G.  Flanigan on January 28, 2005.  Bonuses
             for fiscal years 2005, 2004 and 2003 under the employment agreement
             amounted to approximately $0, $224,000 and $156,000, respectively.

             As of October 1, 2005, the Company had no employment agreements.

             During  the  second  quarter  of  fiscal  year  2005,  the Board of
             Directors approved a performance bonus, with 14% of the pre-tax net
             income before  depreciation  and amortization in excess of $650,000
             paid to the Chief Executive Officer and 6% paid to other members of
             management. Bonuses for fiscal year 2005 amounted to $448,000.

                                      F-23
<PAGE>
                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

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

         Management Agreement

             During fiscal years 2005,  2004 and 2003,  the Company  received an
             owner's fee pursuant to a management  agreement  with a non-related
             company  which  operates a club in Atlanta,  Georgia,  owned by the
             Company.  The management  agreement provided for a security deposit
             of $200,000,  but during fiscal year 2005, $130,000 of the security
             deposit was applied towards outstanding  additional owner's fee due
             the  Company.  As of October 1, 2005,  the balance of the  security
             deposit  held by the  Company  was  $70,000,  which is  included in
             accounts  payable and accrued  expenses.  The Company  receives the
             greater of $150,000 or 10% of gross sales,  as defined,  calculated
             annually,  paid monthly.  In fiscal years 2005,  2004 and 2003, the
             owner's  fee  earned  was   $261,000,   $265,000,   and   $260,000,
             respectively.

NOTE 10. COMMON STOCK

         Treasury Stock

             Purchase of Common Shares

                During fiscal years 2005 and 2004, the Company purchased a total
                of  42,720  and  30,400   shares  of   Company   common   stock,
                respectively,  at a total  cost of  approximately  $353,000  and
                $201,000, respectively, under a repurchase program authorized by
                the Board of Directors.  The Company did not purchase any shares
                of Company common stock during fiscal year 2003.

             Sale of Common Shares

                During fiscal years 2005 and 2004, the Company sold an aggregate
                of 490 and 20,755 shares of common stock, respectively, pursuant
                to the  exercise of options to certain  employee/officers  for a
                total of  approximately  $2,000 and $93,000,  respectively.  The
                Company did not sell any common shares in fiscal year 2003.

         Stock Options

             There were no options granted during fiscal years 2005 and 2003.

             In May 2004, the Company  granted options to purchase 50,000 shares
             of Company  common stock to certain  employees.  The options vested
             one  year  from the  grant  date,  have a  five-year  life,  and an
             exercise  price of $6.35 per share,  the then  market  price of the
             common stock. At October 1, 2005, options to purchase 50,000 shares
             remain outstanding and exercisable.

             In October 2003,  the Company  granted  options to purchase  16,550
             shares of Company  common stock to certain  employees.  The options
             vested one year from the grant date,  have a five-year life, and an
             exercise  price of $6.14 per share,  the then  market  price of the
             common stock. At October 1, 2005, options to purchase 13,350 shares
             remain outstanding and exercisable.

                                      F-24
<PAGE>
                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 10. COMMON STOCK (Continued)

         Stock Options (Continued)

             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,  as the exercise price is equal to
             fair market value at date of grant.

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

                                                  2005       2004       2003
                                                  ----       ----       ----

             Outstanding at beginning of year    101,900    122,660    128,900
             Options granted                          --     66,550         --
             Options exercised                      (490)   (20,755)        --
             Options expired                        (600)   (66,555)    (6,240)
                                                --------   --------   --------
             Outstanding at end of year          100,810    101,900    122,660
                                                --------   --------   --------
             Exercisable at end of year          100,810     51,900    122,660
                                                ========   ========   ========

             Weighted average option exercise price information for fiscal years
             2005, 2004 and 2003 is as follows:

                                                  2005       2004       2003
                                                  ----       ----       ----

             Outstanding at beginning of year   $   5.77   $   4.61   $   4.69
                                                ========   ========   ========
             Granted during the year            $     --   $   6.30   $     --
                                                ========   ========   ========
             Exercised during the year          $   4.56   $   4.50   $     --
                                                ========   ========   ========
             Outstanding at end of year         $   5.75   $   5.77   $   4.61
                                                ========   ========   ========
             Exercisable at end of year         $   5.75   $   5.20   $   4.61
                                                ========   ========   ========

             Significant  option  groups  outstanding  at  October  1,  2005 and
             related weighted average price and life information are as follows:

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

              4-2-01         24,860         24,860      $4.16           0.5
              4-2-02         12,600         12,600      $6.10           1.5
             10-1-03         13,350         13,350      $6.14           3.0
             5-20-04         50,000         50,000      $6.35           3.5



                                      F-25
<PAGE>
                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

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>
                                                        2005        2004        2003
                                                        ----        ----        ----

<S>                                                   <C>         <C>         <C>
         Basic weighted average shares                1,895,000   1,922,000   1,926,000
         Incremental shares relating to outstanding
           options                                       28,000      11,000      29,000
                                                      ---------   ---------   ---------
         Diluted weighted average shares              1,923,000   1,933,000   1,955,000
                                                      =========   =========   =========
</TABLE>

NOTE 12. RELATED PARTY TRANSACTIONS

         The  Company's  Chief  Executive  Officer  manages one of the Company's
         franchised stores.

         During fiscal years 2004 and 2003,  the Company  incurred legal fees in
         the form of salary of approximately $55,000 and $153,000  respectively,
         for  services  provided  by a member of the Board of  Directors.  These
         legal fees ceased during fiscal year 2004 when this Board member became
         a  full-time  employee  and  the  associated  salary  was  included  in
         officers' payroll.

         The Company paid  approximately  $109,000 and $248,000 in lease rentals
         to an entity owned and  controlled  by a former  member of its Board of
         Directors  during  fiscal  years  2004 and 2003,  respectively.  During
         fiscal year 2004, the related party sold all related property.

         Also  see  Notes  3,  5,  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 retail package stores consists
         of retail liquor sales.

         Information concerning the revenues and operating income for the fiscal
         years ended 2005,  2004 and 2003, and  identifiable  assets for the two
         segments  in which the  Company  operates,  are shown in the  following
         table.  Operating income is total revenue less cost of merchandise sold
         and operating expenses relative to each segment. In computing operating
         income,  none of the  following  items  have  been  included:  interest
         expense,  other  non-operating  income and  expense  and income  taxes.
         Identifiable  assets by segment  are those  assets that are used in the
         Company's operations in each segment.  Corporate assets are principally
         cash,  notes and mortgages  receivable,  real  property,  improvements,
         furniture,  equipment  and  vehicles.  The  Company  does  not have any
         operations  outside of the United States and intersegment  transactions
         are not material.

                                      F-26
<PAGE>
                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 13. BUSINESS SEGMENTS (Continued)

<TABLE>
<CAPTION>
                                                                   2005             2004           2003
                                                                   ----             ----           ----
<S>                                                            <C>             <C>             <C>
         Operating Revenues:
            Restaurants                                        $ 35,829,000    $ 33,698,000    $ 29,194,000
            Package goods sales                                  11,810,000      10,911,000       9,777,000
            Other revenues                                        1,393,000       1,324,000       1,282,000
                                                               ------------    ------------    ------------
               Total operating revenues                        $ 49,032,000    $ 45,933,000    $ 40,253,000
                                                               ============    ============    ============

         Operating Income Reconciled to Income
           before Income Taxes:
               Restaurants                                     $  3,457,000    $  3,023,000    $  3,432,000
               Retail package stores                                744,000         348,000         409,000
                                                               ------------    ------------    ------------
                                                                  4,201,000       3,371,000       3,841,000
               Corporate expenses, net of other revenues         (2,035,000)     (2,098,000)     (1,817,000)
                                                               ------------    ------------    ------------
               Operating income                                   2,166,000       1,273,000       2,024,000
               Equity in net income of limited partnership           18,000           6,000          20,000
               Minority interest in earnings of consolidated
                  limited partnership                              (403,000)       (301,000)       (599,000)
               Interest expense, net of interest income             (68,000)        (80,000)        (95,000)
               Other                                                 58,000          79,000          80,000
             Loss on abandonment of property and
                  equipment                                        (121,000)       (367,000)             --
                                                               ------------    ------------    ------------
                     Income Before Income Taxes                $  1,650,000    $    610,000    $  1,430,000
                                                               ============    ============    ============

         Identifiable Assets:
            Restaurants                                        $ 10,022,000    $ 10,033,000    $  9,513,000
            Retail package store                                  3,527,000       2,505,000       1,958,000
                                                               ------------    ------------    ------------
                                                                 13,549,000      12,538,000      11,471,000
            Corporate                                             7,295,000       7,236,000       7,262,000
                                                               ------------    ------------    ------------
         Consolidated Totals                                   $ 20,844,000    $ 19,774,000    $ 18,733,000
                                                               ============    ============    ============

         Capital Expenditures:
            Restaurants                                        $  1,848,000    $    897,000    $  1,794,000
            Retail package stores                                   251,000         211,000         434,000
                                                               ------------    ------------    ------------
                                                                  2,099,000       1,108,000       2,228,000
            Corporate                                               298,000         334,000         800,000
                                                               ------------    ------------    ------------
         Total Capital Expenditures                            $  2,397,000    $  1,532,000    $  3,028,000
                                                               ============    ============    ============

         Depreciation and Amortization:
            Restaurants                                        $  1,166,000    $  1,208,000    $    822,000
            Retail package stores                                   163,000         133,000         116,000
                                                               ------------    ------------    ------------
                                                                  1,329,000       1,341,000         938,000
            Corporate                                               214,000         204,000         249,000
                                                               ------------    ------------    ------------
         Total Depreciation and Amortization                   $  1,543,000    $  1,545,000    $  1,187,000
                                                               ============    ============    ============
</TABLE>

                                      F-27
<PAGE>
                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 14. QUARTERLY INFORMATION (UNAUDITED)

         The following is a summary of the Company's unaudited quarterly results
         of operations for the quarters in fiscal years 2005 and 2004.
<TABLE>
<CAPTION>
                                                             Quarter Ended
                                          -----------------------------------------------------
                                           January 1,     April 2,      July 2,      October 1,
                                              2005          2005          2005          2005
                                              ----          ----          ----          ----
<S>                                       <C>           <C>           <C>           <C>
         Revenues                         $11,825,000   $12,449,000   $12,342,000   $12,416,000
         Income from operations               339,000       598,000       716,000       513,000
         Net income (loss)                    240,000       327,000       499,000        41,000
         Net income (loss) per share -
           basic                                 0.13          0.17          0.26          0.02
         Net income (loss) per share -
           diluted                               0.12          0.17          0.26          0.02
         Weighted average common
            stock outstanding - basic       1,915,000     1,905,000     1,885,000     1,874,000
         Weighted average common
            stock outstanding - diluted     1,929,000     1,933,000     1,912,000     1,914,000
</TABLE>

         The  following  is  a  summary  of  the   significant   fourth  quarter
         adjustments for fiscal year 2005:

         Additional accrual for officers' bonuses           $250,000
         Adjusting estimated income taxes to actual          100,000
         Abandonment of property and equipment               121,000
                                                            --------
                                                            $471,000

<TABLE>
<CAPTION>
                                                               Quarter Ended
                                          ---------------------------------------------------------
                                           December 27,    March 27,      June 26,       October 2,
                                              2003           2004           2004           2004
                                              ----           ----           ----           ----
<S>                                       <C>           <C>           <C>           <C>

         Revenues                         $ 10,627,000   $ 12,301,000   $ 11,335,000   $ 11,670,000
         Income from operations                348,000        382,000        137,000        406,000
         Net income (loss)                     227,000        252,000          7,000        (46,000)
         Net income (loss) per share -
           basic                                  0.12           0.13           0.00          (0.02)
         Net income (loss) per share -
           diluted                                0.11           0.13           0.00          (0.02)
         Weighted average common
            stock outstanding - basic        1,936,000      1,928,000      1,926,000      1,916,000
         Weighted average common
            stock outstanding - diluted      2,022,000      1,960,000      1,958,000      1,926,000
</TABLE>

         Each of the first three quarters  includes  thirteen  weeks,  while the
         fourth quarter includes fourteen weeks for fiscal year 2004.

                                      F-28
<PAGE>
                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 14. QUARTERLY INFORMATION (UNAUDITED) (Continued)

         The following is a summary of the unusual  adjustments  for fiscal year
         2004.
<TABLE>
<CAPTION>
<S>                                                                                     <C>
          First Quarter
             Adjustment for store supplies                                              $104,000

          Second Quarter
             Adjustment for allocation of insurance premiums related to franchisees      178,000
             Past due real property taxes                                                 52,000
             Excess opening costs of joint venture restaurant in Stuart, Florida          74,000

          Third Quarter
             Past due real property taxes                                                 59,000

          Fourth Quarter
             Abandonment of property and equipment                                       367,000
                                                                                        --------
                                                                                        $834,000
</TABLE>

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


NOTE 15. 401(k) PLAN

         Effective July 2004, the Company began  sponsoring a 401(k)  retirement
         plan covering  substantially all employees who met certain  eligibility
         requirements.  Employees may contribute  elective deferrals to the plan
         up to amounts  allowed under the Internal  Revenue Code. The Company is
         not  required  to  contribute  to the plan  but may make  discretionary
         profit sharing and matching contributions. During fiscal year 2005, the
         Company  made  discretionary  contributions  of  $37,500  to the  plan,
         effective July 1, 2005.


NOTE 16. SUBSEQUENT EVENTS

         Hurricane Wilma

             On  October  24,  2005,   Hurricane  Wilma  struck  South  Florida,
             impacting  all  locations  owned  and/or  operated by the  Company,
             including  franchises.  Most locations  sustained damages,  but the
             corporate  office  was the  only  location  to  suffer  significant
             structural  damage.  All locations  lost electric power for varying
             periods  of time.  By  October  29,  2005,  all  Company  owned and
             franchised   retail   liquor   stores   were  open  for   business,
             notwithstanding  the loss of electric  power,  and by November  10,
             2005, all  restaurants  were open for business.  The estimated cost

                                      F-29
<PAGE>
                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 16. SUBSEQUENT EVENTS (Continued)

         Hurricane Wilma (Continued)

             incurred  by the  Company to date is  approximately  $550,000.  The
             revenue from the package  liquor  stores during the period were not
             adversely affected by the hurricane. However, the estimated loss of
             revenue from the  restaurants  during the period was  approximately
             $550,000,   (Company   owned   restaurants   -  $350,000;   limited
             partnership  owned  restaurants - $200,000)  The estimated  loss of
             restaurant revenue,  ($550,000),  represents approximately $360,000
             of gross profit,  (Company  owned  restaurants - $227,500;  limited
             partnership restaurants - $132,500). The Company maintains standard
             and customary property insurance coverage,  as well as coverage for
             business  interruption,  which  coverages  are  subject  to certain
             exclusions  related to damage  caused by  windstorm.  The insurance
             policy has a $50,000  deductible  per  occurrence.  The Company has
             begun  submitting  claims for damages that it concludes are covered
             by the insurance and has received an advance of $250,000, ($300,000
             less the $50,000 deductible), from the insurance carrier on account
             of damages to the corporate  office alone.  The ultimate  amount of
             any insurance recovery cannot be accurately estimated at this time.

         Purchase of Management Agreement

             During the first quarter of fiscal year 2006, the Company purchased
             the rights to operate an existing  restaurant  in Deerfield  Beach,
             Florida for $500,000.  The Company will receive  one-half  (1/2) of
             the net profit from the operation of the  restaurant for an initial
             period of ten years with four five-year renewal periods.

         Contract to Purchase New Restaurant Location

             During the first quarter of fiscal year 2006, the Company, as agent
             for a limited partnership to be formed, entered into a contract for
             the  purchase  of a  location  in Davie,  Florida to  renovate  and
             operate as a  "Flanigan's  Seafood Bar and Grill"  restaurant.  The
             purchase price was approximately $650,000.


                                      F-30