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

                                   FORM 10KSB

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

For the fiscal year ended October 2, 1999

                                   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.
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             (Exact name of registrant as specified in its charter)

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

2841 Cypress Creek Road, Fort Lauderdale, FL            33309
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(Address of principal executive offices)             (Zip Code)

Registrant's telephone number, including area code, (954) 974-9003

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

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

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

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  reports)  and  (2)  has  been  subject  to such  filing
requirements for the past 90 days. Yes X No

The  aggregate  market value of the voting stock held by  non-affiliates  of the
registrant was $5,460,000 as of December 13, 1999.

There were 1,950,000 shares of the  Registrant's  Common Stock ($0.10 Par Value)
outstanding as of October 2, 1999.

                       DOCUMENTS INCORPORATED BY REFERENCE

Information  contained in the  Registrant's  1999 definitive  proxy material has
been  incorporated  by  reference in Items 10, 11, 12 and 13 of Part III of this
Annual Report on Form 10-KSB.

                         Exhibit Index Begins on Page 34
<PAGE>
                                     PART I

Item 1. Business

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 2, 1999, the Company  operated 14
units, and had interests in seven additional units which have been franchised by
the  Company.  The table  below  sets out the  changes in the type and number of
units being operated.
<TABLE>
<CAPTION>
                                      FISCAL  FISCAL
                                      YEAR    YEAR     NOTE
                                      1999    1998     NUMBER
TYPES OF UNITS
-------------------------------------------------------------------
<S>                                    <C>     <C>   <C>
Combination package and restaurant     4       4
Restaurant only                        5       5     (1)(2)(3)(4)

Package store only                     4       3      (5)(6)
Clubs                                  1       1
-------------------------------------------------------------------
TOTAL - Company operated units        14      13

FRANCHISED - units                     7       7      (4)
</TABLE>

Notes:

   (1) During  the fourth  quarter of fiscal  year 1997,  the  Company  formed a
limited  partnership and raised funds through a private offering to purchase the
assets of a restaurant in Surfside,  Florida and renovate the same for operation
under the "Flanigan's  Seafood Bar and Grill"  servicemark.  The Company acts as
general partner and forty two percent owner of the  partnership.  The restaurant
opened in the second quarter of 1998.

   (2) During the third quarter of fiscal year 1999,  the lease for a restaurant
operated  by the  Company in Fort  Lauderdale,  Florida  expired and the Company
elected not to renew the same.  The  furniture,  fixture,  equipment  and liquor
license used by the Company at this  restaurant  were sold to an unrelated third
party.

   (3) During the third quarter of fiscal year 1998 the Company formed a limited
partnership  and raised funds through a private  offering to purchase the assets
of a restaurant in Kendall,  Florida and renovate the same for  operation  under
the "Flanigan's Seafood Bar and Grill" servicemark.  The Company acts as general
partner and forty percent ownership of the partnership. Due to delays beyond the
control of the Company,  the  restaurant  is currently  being  renovated  and is
expected to be open for business  during the second quarter of fiscal year 2000.
The restaurant is not included in the table of units.

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<PAGE>
   (4) During the first quarter of fiscal year 1999,  the Company  purchased the
Management  Agreement  of a  franchise,  which  includes the right to manage the
franchised  restaurant,  effective  December 1, 1998.  The franchise  includes a
package liquor store, which is still operated exclusively by the franchisee. The
Company  retains its interest in the franchise and continues to receive the same
royalties  and rent as it  received  prior  to its  purchase  of the  Management
Agreement.

   (5)  During the third  quarter of fiscal  year  1999,  the  Company  opened a
package liquor store in Fort Lauderdale, FL

   (6)  During  fiscal  year  1996,  one  franchisee  exercised  the  thirty day
cancellation  clause under the  franchise  agreement  and related  documents and
returned its  franchised  unit to the  Company.  The  franchisee  had operated a
package liquor store and lounge under the "Big Daddy's" servicemark. The Company
profitably  operated the package liquor store of the franchised unit but did not
reopen the lounge.  The lease  agreement  for the business  premises  expired on
December  31, 1995 and the Company  occupied  the same on an oral month to month
lease agreement, paying its prorata share of the real property taxes monthly and
insuring  the  property  until  April  1998 when the oral  month to month  lease
agreement was terminated and the package liquor store was closed.

   All of the  Company's  package  liquor  stores,  restaurants  and  clubs  are
operated on leased properties. As a result of significant escalations of rent on
certain of such leased  properties and on leased  properties that were not being
operated by the Company,  on November 4, 1985 the  Company,  not  including  its
subsidiaries,  filed a Voluntary  Petition in the United States Bankruptcy Court
for the Southern  District of Florida seeking to reorganize  under Chapter 11 of
the Federal Bankruptcy Code. On May 5, 1987 the Company's Plan of Reorganization
as amended and modified ("the Plan") was confirmed by the Bankruptcy  Court.  On
December 28, 1987 the Company was officially  discharged  from  bankruptcy.  See
Note  6 to  the  consolidated  financial  statements  for a  discussion  of  the
bankruptcy  proceedings to date and Item 7 for a discussion of the effect of the
bankruptcy proceedings herein.

   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

                                        3
<PAGE>
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 11 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
78.6% of total restaurant sales.

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

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

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

SUBSIDIARY                                 STATE OF INCORPORATION
----------                                 ----------------------

Flanigan's Management Services, Inc.               Florida
Flanigan's Enterprises, Inc. of Georgia            Georgia
Seventh Street Corp.                               Florida
Flanigan's Enterprises, Inc. of Pa.                Pennsylvania

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

   The  Company's  executive  offices are  located in a leased  facility at 2841
Cypress Creek Road, Fort  Lauderdale,  Florida 33309 and its telephone number at
such address is (954) 974-9003.

Corporate Reorganization

   As noted in Note 6 to the consolidated  financial statements,  on November 4,
1985,  the Company,  not  including any of its  subsidiaries,  filed a Voluntary
Petition in the United  States  Bankruptcy  Court for the  Southern  District of
Florida seeking to reorganize  under Chapter 11 of the Federal  Bankruptcy Code.
The  primary  purposes  of the  petition  were (1)to  reject  leases  which were
significantly  above market rates and (2)to reject  leases on closed units which
had been repossessed by, or returned to the

                                        4
<PAGE>
Company.  On May 5, 1987,  the Company's Plan of  Reorganization  as amended and
modified was confirmed by the Bankruptcy Court. On December 28, 1997 the Company
was  officially  discharged  from  bankruptcy.  See  Note 6 to the  consolidated
financial statements for a discussion of the bankruptcy  proceedings to date and
Item 7 for a discussion of the effect of the bankruptcy proceedings herein.

Financial Information Concerning Industry Segments

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

   Financial  information  broken into these two principal industry segments for
the two fiscal  years ended  October 2, 1999 and October 3, 1998 is set forth in
the  consolidated  financial  statements  which  are  attached  hereto,  and  is
incorporated herein by reference.

The Company's Package Liquor Stores and Restaurants

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

   The Company's restaurants offer full food and alcoholic beverage service with
approximately  79.7% of their  sales  being food items.  These  restaurants  are
operated  under the  "Flanigan's  Seafood Bar and Grill"  servicemark.  Although
these  restaurants  provide a neighborhood  atmosphere,  they have the degree of
standardization  prevalent in casual dining restaurant  chains,  including menu.
The interior  decor is nautical with numerous  fishing and boating  pictures and
decorations.  Drink prices may vary between  locations to meet local conditions.
Food prices are standardized. The restaurants' hours of operation are from 11:00
a.m.  to  1:00-5:00  a.m.  The  Company  continues  to develop  strong  customer
recognition of its "Flanigan's  Seafood Bar and Grill" servicemark  through very
competitive pricing and efficient and friendly service.

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

                                        5
<PAGE>
Franchised Package Liquor Stores and Lounges

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

   As of the end of fiscal  year 1986,  ten units had been  franchised.  Four of
these  units were  franchised  to members of the family of the  Chairman  of the
Board. The Company had limited response to its franchise  offering and suspended
its franchise plan at the end of fiscal year 1986.

   During  fiscal year 1988,  two  franchisees  (one of whom is on the Company's
Board of  Directors)  exercised  the thirty day  cancellation  clause  under the
franchise agreement and related documents and returned their franchised units to
the Company.  No gain or loss was recognized on these  returns.  The Company has
been profitably operating these two units.

   During  fiscal year 1990,  the Company  completed a  foreclosure  to take one
franchise back,  reducing the number of franchised units to seven. This unit was
sold  pursuant  to a  private  offering  to a  Subchapter  S  corporation  whose
president  was the Chairman and whose  investors  included  three  directors and
members of the Chairman's  family.  This unit was managed by the Company through
the end of fiscal year 1992. In the first quarter of fiscal year 1993, the Board
of  Directors  agreed to  purchase  this unit  from the group of  investors.  In
purchasing  this unit,  the Board of  Directors  determined  that the  projected
profitability  would provide a fair return on investment,  whereas  without this
purchase,  the Company would only have received its 4% management  fee until the
Subchapter S corporation received its full investment back from this unit.

   During fiscal year 1991, the Company sold one unit to the unit's manager,  an
unaffiliated  third  party,  who had been  operating it pursuant to a management
agreement  since  1987.  This  unit  consisted  of a  package  liquor  store and
restaurant, which restaurant was not

                                        6
<PAGE>
operating under the Company's  "Flanigan's  Seafood Bar and Grill"  servicemark.
The Company also entered into a franchise agreement with the manager,  licensing
the use of the "Big Daddy's Liquors" servicemark for the liquor package store in
exchange for a royalty in the amount of 1% of gross sales.  Although the Company
counted this unit as a franchise,  the Company did not consider this transaction
a part of its franchise plan.  During fiscal year 1995, the manager executed the
Company's new franchise  agreement for the operation of his restaurant under the
"Flanigan's Seafood Bar and Grill" servicemark as more fully described below. At
the same time, the former manager also executed a new franchise  agreement for a
second  restaurant opened since the purchase of the unit from the Company during
fiscal year 1991.

    During fiscal year 1992, one unaffiliated  franchisee  expressed an interest
in selling his unit or returning it to the Company  pursuant to the terms of the
franchise  agreement and documents.  As a result of the  substantial  investment
necessary to upgrade and renovate this unit,  an  affiliated  group of investors
formed a Subchapter S Corporation  and  purchased the unit from the  franchisee.
The  shareholder  interest of all the officers and directors  represented 42% of
the  invested  capital.  The  shareholder  interest  of  the  Chairman's  family
represented  an  additional  47.5% of the total  invested  capital.  The Company
continues to receive the same  royalties,  rent and mortgage  payments as it had
from the unaffiliated franchisee.

   During fiscal year 1996, one franchisee exercised the thirty day cancellation
clause under the  franchise  agreement  and related  documents  and returned its
franchised  unit to the Company.  The  franchisee  had operated a package liquor
store and lounge under the "Big  Daddy's"  servicemark.  The Company  profitably
operated the package liquor store of the franchised  unit but did not reopen the
lounge.  The lease agreement for the business  premises  expired on December 31,
1995 and the Company occupied the same on an oral month to month lease agreement
paying its prorata  share of the real  property  taxes  monthly and insuring the
property  until  April 1998 when the oral  month to month  lease  agreement  was
terminated and the package liquor store was closed.

   During the third quarter of fiscal year 1996, another unaffiliated franchisee
expressed its intent to terminate its new franchise  agreement  (package  liquor
store only) and to return its unit,  including  restaurant  to the  Company.  In
order to induce the franchisee to continue  operating its franchise  through the
end of fiscal year 1996, the Company  agreed to reduce the weekly  sublease rent
and  suspend  all  weekly  payments  on account of its  purchase  money  chattel
mortgage.  In the interim,  the Company  determined  that the cost  necessary to
convert this unit to a "Flanigan's  Seafood Bar and Grill"  restaurant  exceeded
the funds  available to the Company and on September 30, 1996,  during the first
quarter of fiscal year 1997, the franchise was sold to a related party, in

                                        7
<PAGE>
lieu of its return to the  Company.  The  initial  shareholder  interest  of all
officers and directors,  which was comprised of the Chairman and a member of his
family,  represented one hundred percent of the initial invested capital. It was
also agreed that the Company  would manage the  franchise  for the related third
party, pursuant to a management agreement. Subsequent to the closing of the sale
of the franchise,  another related franchisee, who is also a member of the Board
of Directors of the Company, paid the Company the sum of $150,000 to approve his
purchase of this  franchise  from the related third party and for the Company to
relinquish  its  right to act as  manager  of the  franchise.  As a part of this
transaction,  the Company  agreed to continue  the reduced  sublease  rent,  the
waiver of any  franchise  royalties  and the  suspension  of  mortgage  payments
through March 1997. Since April 1, 1997 the Company has received the same weekly
payment as  previously  paid by the former  franchisee  during fiscal year 1996.
During the third quarter of fiscal year 1997 this related party formed a limited
partnership  to own this  franchise  and through  which it raised the  necessary
funds to renovate the  restaurant.  The Company is an investor in the franchise,
as are other  related  parties,  including,  but not  limited  to  officers  and
directors of the Company and their families.

   During the first  quarter of fiscal  year 1999,  the  manager of a  franchise
restaurant  expressed  an  interest  in selling  his rights  under a  Management
Agreement and effective  December 1, 1998 the Company assumed  management of its
franchised  restaurant.  The franchise includes a package liquor store, which is
still operated  exclusively by the franchisee.  The Company retains its interest
in the  franchise  and  continues to receive the same  royalties  and rent as it
received prior to its purchase of the right to manage the franchised restaurant.

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

Franchised Restaurants

     During fiscal year 1995, the Company completed its new franchise  agreement
for a franchisee to operate a restaurant  under the "Flanigan's  Seafood Bar and
Grill"  servicemark  pursuant to a license from the Company.  The new  franchise
agreement was drafted jointly with existing  franchisees with all  modifications
requested by the franchisees  incorporated  therein. The new franchise agreement
provides  the Company  with the ability to maintain a high level of food quality
and service at its franchised  restaurants,  which are essential to a successful
franchise  operation.  A  franchisee  is  required  to  execute a new  franchise
agreement  for the balance of the term of its lease for the  business  premises,
extended by the franchisee's continued occupancy of the business

                                        8
<PAGE>
premises thereafter,  whether by lease or ownership. The new franchise agreement
provides for a royalty to the Company in the amount of approximately 3% of gross
sales plus a  contribution  to  advertising in an amount between 1-1/2% to 3% of
gross sales. In most cases, the Company does not sublease the business  premises
to the  franchisee  and in those  cases  where it does,  the  Company  no longer
receives rent in excess of the amount paid by the Company.

   As the  end of  fiscal  year  1998,  all  existing  franchisees  who  operate
restaurants  under the  "Flanigan's  Seafood Bar and Grill" or other  authorized
servicemarks had executed new franchise agreements.

   During fiscal year 1996, the Company's  franchise  agreement with a member of
Mr.  Flanigan's  family expired and the Company declined to offer the franchisee
the option of executing its new franchise agreement. During the first quarter of
the  fiscal  year 1997,  the  Company  filed suit  against  the  franchisee  for
servicemark infringement, seeking injunctive relief and monetary damages. During
the first  quarter of fiscal year 1998, a  Stipulated  Agreed Order of Dismissal
Upon Mediation was issued whereby the Company  received  $110,000 and the former
franchisee  agreed to cease all use of the  "Flanigan's"  servicemark  and other
trade dress features common to Company owned and/or franchised restaurants.

Investment in Joint Ventures

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

   As  previously  discussed,  during the third  quarter of fiscal year 1997,  a
related party formed a limited  partnership  to own a certain  franchise in Fort
Lauderdale, Florida, through which it raised the necessary funds to renovate the
restaurant.  The  Company  is  a  twenty  five  percent  owner  of  the  limited
partnership as are other related parties, including, but not limited to officers
and directors of the Company and their families.

   During the fourth  quarter of fiscal year 1997,  the Company formed a limited
partnership  and raised funds through a private  offering to purchase the assets
of a restaurant in Surfside,  Florida and renovate the same for operation  under
the "Flanigan's Seafood Bar and Grill" servicemark.  The Company acts as general
partner of the limited  partnership and is also a forty two percent owner of the
same, as are other related parties,  including,  but not limited to officers and
directors of the Company and their families.  The limited partnership  agreement
gives the limited

                                        9
<PAGE>
partnership the right to use the "Flanigan's  Seafood Bar and Grill" servicemark
for a fee equal to 3% of the gross sales from the  operation of the  restaurant,
only while the Company acts as general  partner.  This restaurant  opened in the
second quarter of fiscal year 1998.

   In order to ensure that the Company had adequate cash reserves in view of its
investment in the restaurant discussed above, and for other improvements, during
the second  quarter of fiscal year 1997,  the Board of Directors  authorized the
Company to borrow up to $1,200,000  at an interest rate of twelve  percent (12%)
per annum and fully amortized over five (5) years.  During the fourth quarter of
fiscal year 1997, the Company borrowed $375,000 from private investors, in units
of $5,000,  which loan is fully secured with specific  receivables  owned by the
Company. During the first quarter of fiscal year 1998, the Company closed on its
loan from  Nations  Bank  (formerly  Barnett  Bank) in the  principal  amount of
$500,000 with interest at prime rate. Equal quarterly  principal  payments began
March 31, 1998 with interest  payable  monthly.  The Company prepaid the loan in
full during the third quarter of fiscal year 1999.

   In the third  quarter of fiscal year 1998,  the Company  entered into a lease
agreement for a restaurant in Kendall,  Florida and a separate agreement for the
purchase of the  furniture,  fixtures and equipment of the existing  restaurant.
The lease agreement and separate agreement were each contingent upon the Company
applying for and receiving  zoning  variances  from Miami Dade County,  Florida.
Although zoning  variances  became final during the first quarter of fiscal year
1999, for reasons beyond the control of the Company,  building  permits were not
issued  until  September  1999 at which  time  the  renovations  commenced.  The
restaurant is expected to open during the second quarter of fiscal year 2000. At
the same time, the Company raised funds through a private offering for a limited
partnership  to be formed,  to own and renovate the  restaurant for operation of
the same under the "Flanigan's Seafood Bar and Grill"  servicemark.  The Company
is general partner of the limited  partnership and is the owner of forty percent
of the same,  as well as other  related  parties,  including  but not limited to
officers  and  directors  of  the  Company  and  their  families.   The  limited
partnership agreement will give the partnership the right to use the "Flanigan's
Seafood Bar and Grill" servicemark for a fee equal to 3% of the gross sales from
the operation of the restaurant, while the Company acts as general partner only.

Clubs

   As of the end of fiscal  year 1999,  the  Company  owned one club in Atlanta,
Georgia,  which was operated by an unaffiliated third party, as discussed below.
In addition,  until  September  20,  1996,  the Company  operated its  remaining
Pennsylvania  club,  (Store  #850,  King of  Prussia,  Pennsylvania),  which was
financed through a

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limited  partnership in which a wholly owned  subsidiary of the Company acted as
general  partner.  The lease for this unit had only thirteen  months  remaining,
with no more renewal options,  and revenues were down as a result of competition
from some  expensive new clubs  constructed  on the  waterfront.  An opportunity
arose to sell the lease, leasehold improvements and liquor license to Dick Clark
Restaurants,  Inc.  With the approval of the limited  partners,  the sale of the
unit was consummated on September 20, 1996 for a purchase price of $500,000.

Operation of Units by Unaffiliated Third Parties

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

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
three 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.

                                       11
<PAGE>
   The Company arranges for independent third parties, or "shoppers", to inspect
each unit in order to evaluate the unit's operations,  including the handling of
cash transactions.

Purchasing and Inventory

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

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

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

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

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

Government Regulation

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

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

   In the State of Florida,  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.

                                       12
<PAGE>
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,  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 premises  consumption  only. In Florida,  the other liquor
licenses held by the Company or limited partnerships of which the Company is the
general  partner  are  restaurant  liquor  licenses,  which  do not  have  quota
restrictions  and no purchase or resale value.  A restaurant  liquor  license is
issued to every  applicant  who  meets  all of the  state  and  local  licensing
requirements,  including, but not limited to zoning and minimum restaurant size,
seating and menu. In the State of Georgia,  the other state in which the Company
operates,  licensed  establishments  also do not  have  quota  restrictions  for
on-premises  consumption and such licenses are issued to any applicant who meets
all of the state and local licensing  requirements  based upon extensive license
application filings and investigations of the applicant.

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

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

   The Company is subject in certain states to "dram shop" or "liquor liability"
statutes,  which generally provide a person injured by an intoxicated person the
right to recover damages from an establishment  that wrongfully served alcoholic
beverages to such person.  See Item 1,  Insurance and Item 3, Legal  Proceedings
for further  discussion.  The Company maintains a continuous program of training
and surveillance  from its corporate  headquarters to assure compliance with all
applicable liquor laws and regulations. During the fourth quarter of fiscal year
1997, the Division of Alcoholic Beverages and Tobacco (DABT), subpoenaed several
employees of the Company to inquire about three cash purchases of inventory made
in calendar years 1995 and 1996 from a distributor, without invoices.

                                       13
<PAGE>
The total purchase  price for the inventory was $5,100.  The Company was charged
administratively  by the  DABT for  failing  to have  invoices  for  these  cash
transactions, but subsequent to the end of fiscal year 1998, the Company entered
in a  settlement  agreement  with the DABT  and  paid a fine of  $4,000.  At its
meeting  on  September  4,  1997,the  Board  of  Directors  was  advised  of the
investigation  by the  DABT and  unanimously  passed  a  resolution  prohibiting
management from purchasing inventory without an invoice and in cash.  Otherwise,
during the fiscal years ended October 3, 1998,  and October 2, 1999, and through
the present time, no significant pending matters have been initiated by the DABT
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. The
Company is self-insured against liability claims in excess of $1,000,000.

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

   An accrual for the  Company's  estimated  liability  on  liability  claims is
included in the  consolidated  balance sheets in the caption  "Accrued and Other
Liabilities".  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.

                                       14
<PAGE>
   Through the end of the 1990 fiscal year,  the Company was  uninsured for dram
shop liability.  Florida has restricted its dram shop law by statute, permitting
persons  injured by an  "obviously  intoxicated  person" to bring a civil action
against  the  business  which  served  alcoholic  beverages  to a  minor  or  an
individual known to be habitually addicted to alcohol. 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 the  Company  then  vigorously  defends
these  claims on the  grounds  that its  employees  did not serve an  "obviously
intoxicated  person".  Damages in most dram shop claims are substantial.  At the
present time, there are no dram shop claims pending against the Company.

Competition and the Company's Market

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

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

   As previously  noted, at October 2, 1999 the Company owned and operated eight
restaurants,  six of which had  formerly  been  lounges  and were  renovated  to
provide  full food  service.  These  restaurants  compete  directly  with  other
restaurants   serving  liquor  in  the  area.  The  Company's   restaurants  are
competitive due to four factors; product quality, portion size, moderate pricing
and a  standardization  throughout the Company owned restaurants and most of the
franchises.

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

Trade Names

   The Company operates principally under three servicemarks; "Flanigan's", "Big
Daddy's",  and  "Flanigan's  Seafood  Bar and  Grill".  Throughout  Florida  the
Company's package liquor stores are

                                       15
<PAGE>
operated under the "Big Daddy's  Liquors"  servicemark.  The Company's rights to
the use of the "Big Daddy's" servicemark are set forth under a consent decree of
a Federal Court  entered into by the Company in settlement of federal  trademark
litigation. The consent decree and the settlement agreement allow the Company to
continue,  and expand,  its use of the "Big Daddy's  "servicemark  in connection
with  limited  food and liquor  sales in  Florida.  The consent  decree  further
contained a  restriction  upon all future sales of distilled  spirits in Florida
under the "Big Daddy's"  name by the other party who has a federally  registered
servicemark for "Big Daddy's" use in the restaurant business.  The Federal Court
retained  jurisdiction to enforce the consent decree. The Company has acquired a
registered  Federal  trademark on the  principal  register for its  "Flanigan's"
servicemark.

   During fiscal year 1996, the Company's  franchise  agreement with a member of
Mr.  Flanigan's  family expired and the Company declined to offer the franchisee
the option of executing its new franchise agreement. During the first quarter of
fiscal year 1997, the Company filed suit against the franchisee for  servicemark
infringement,  seeking injunctive relief and monetary damages.  During the first
quarter  of fiscal  year 1998,  a  Stipulated  Agreed  Order of  Dismissal  Upon
Mediation  was issued  whereby  the  Company  received  $110,000  and the former
franchisee  agreed to cease all use of the  "Flanigan's"  servicemark  and other
dress features common to the Company owned and/or franchised restaurants.

   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  368  employees,  of which  298 were
full-time  and 70 were  part-time.  Of these,  23 were employed at the corporate
offices. Of the remaining  employees,  38 were employed in package liquor stores
and 307 in restaurants.

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

                                       16
<PAGE>
                      EXECUTIVE OFFICERS OF THE REGISTRANT

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

Joseph G. Flanigan     Chairman of the Board         70           1959
                       of Directors, Chief
                       Executive Officer and
                       President

William Patton         Vice President                76           1975
                       Community Relations

Edward A. Doxey        Chief Financial Officer       58           1992
                       and Secretary

Jeffrey D. Kastner     Assistant Secretary           46           1995


Item 2. Properties

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

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

   On January 11, 1986,  the  Bankruptcy  Court  entered its Order  granting the
Company's  motions to reject  thirteen  leases and the Company was successful in
negotiating  a  termination  of  three  other  leases.  On April  7,  1986,  the
Bankruptcy  Court granted the Company's  motion to reject two additional  leases
and two more

                                       17
<PAGE>
leases  were  rejected  by the  Company's  failure to assume the same by May 22,
1986.  In  addition,  during the  pendency of the  bankruptcy  proceedings,  the
Company was successful in  renegotiating  a substantial  number of the Company's
remaining  leases,  generally  amending  the terms to five years with three five
year renewal options and deleting cost of living rental  adjustments in exchange
for rents based upon the "fair market rental" for each particular location.  The
Company  believes that the units retained,  especially  with the  aforementioned
lease  modifications,  are  adequate to support its  operations,  including  any
damages as a result of its bankruptcy proceedings.

   All of the Company's units require  periodic  refurbishing in order to remain
competitive.  The Company has budgeted $432,000 for its refurbishing program for
fiscal year 2000. See Item 7,  "Liquidity and Capital  Resources" for discussion
of the amounts spent in fiscal year 1999.

   The following table summarizes the Company's properties as of October 2, 1999
including franchise locations, a club and Company managed locations.
<TABLE>
<CAPTION>
                                 Square            License           Lease
Name and Location                Footage   Seats   Owned by          Terms
-----------------                -------   -----   --------          -----
<S>                              <C>       <C>   <C>           <C>
Big Daddy's Liquors #8           1,800     N/A   Company       5/1/99 to 4/30/14
Flanigan's Enterprises Inc.
959 State Road 84
Fort Lauderdale, FL

Flanigan's Seafood Bar           4,300     130   Company       10/1/71 to 12/31/04
and Grill #9                                                     and Option to
Flanigan's Enterprises                                           12/31/09
Inc. (2)
1550 W.84th Street
Hialeah, FL

Flanigan's Legends               5,000     150   Franchise     5/15/97
Seafood Bar and Grill                                          5/14/00
#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                                          11/15/02
#12 Galeon Tavern, Inc. (3)                                    Option to
2401 Tenth Ave. North                                          11/15/12
Lake Worth, FL
</TABLE>

                                       18
<PAGE>
<TABLE>
<CAPTION>
                                 Square            License           Lease
Name and Location                Footage   Seats   Owned by          Terms
-----------------                -------   -----   --------          -----
<S>                              <C>       <C>   <C>           <C>
Flanigan's Seafood               5,000     200   Joint         N/A
Bar & Grill #13                                  Venture
CIC Investors #13 Ltd.
1549 NW LeJeune Rd
Miami, FL

Flanigan's Seafood               3,320     90    Franchise     6/1/79 to 6/1/04
Bar and Grill #14,                                             Option to 6/1/09
Big Daddy's #14, Inc.
(2)(3)(5)(10)
2041 NE Second St.
Deerfield Beach, FL

Piranha Pats II-#15              4,000     90    Franchise     3/2/76 to 8/31/01
CIC Investors #15 Ltd. (3)(5)                                  Options to 8/31/11
1479 E. Commercial Blvd.
Ft. Lauderdale, FL

Flanigan's Seafood               4,300     100   Franchise     2/15/72 to 12/31/00
Bar and Grill #18                                              Options to 12/31/10
Twenty Seven Birds
Corp. (2)(3)(5)
2721 Bird Avenue
Miami, FL

Flanigan's Seafood               4,500     160   Company       3/1/72 to 12/31/00
Bar and Grill #19                                              Option to 12/31/05
Flanigan's Enterprises
Inc. (2)(4)
2505 N. University Dr.
Hollywood, FL

Flanigan's Seafood               5,100     140   Company       7/15/68 to 12/31/00
Bar and Grill #20                                              Options to 12/31/05
Flanigan's Enterprises                                           Additional Lease
Inc.  (2)                                                        5/1/69 to 12/31/00
North Miami, FL                                                  Options to 12/31/05

Flanigan's Seafood               4,100     200   Company       12/16/68 to
Bar and Grill #22                                              12/31/00
Flanigan's Enterprises                                         Options to 12/31/10
Inc. (2)(4)
2600 W. Davie Blvd.
Ft. Lauderdale, FL

Flanigan's Enterprises           3,000      90    Company      7/1/50 to 6/30/49
Inc. #27 (9)
732-734 NE 125th St.
North Miami, FL
</TABLE>

                                       19
<PAGE>
<TABLE>
<CAPTION>
                                 Square            License           Lease
Name and Location                Footage   Seats   Owned by          Terms
-----------------                -------   -----   --------          -----
<S>                              <C>       <C>   <C>           <C>
Flanigan's Seafood               4,600     150   Company       9/6/68 to 12/31/00
Bar and Grill #31                                              Options to 12/31/10
Flanigan's Enterprises
Inc. (2)
4 N. Federal Highway
Hallandale, FL

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

Big Daddy's Liquors              3,000     N/A   Company       5/29/97 to 5/28/02
#34, Flanigan's                                                Options to 5/28/17
Enterprises, Inc. (1)
9494 Harding Ave.
Surfside, FL

Big Daddy's Liquors              4,600     N/A   Company       3/10/87 to 12/31/00
#36, Flanigan's                                                Additional Lease
Enterprises, Inc. (2)                                          4/29/87 to 12/31/00
102 N. Dixie Highway                                           Option to 12/31/05
Lake Worth, FL

Flanigan's Seafood               4,600     140   Company       4/1/71 to 12/31/00
Bar and Grill #40                                              Option to 12/31/05
Flanigan's Enterprises
Inc. (2)
5450 N. State Road 7
Ft. Lauderdale, 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)(8)
8600 Biscayne Blvd.
Miami, FL

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

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

                                       20

<PAGE>
<TABLE>
<CAPTION>
                                 Square            License           Lease
Name and Location                Footage   Seats   Owned by          Terms
-----------------                -------   -----   --------          -----
<S>                              <C>       <C>   <C>           <C>
Flanigan's Enterprises           10,000    400   Company       5/1/76 to 4/30/01
#600 (7)                                                       Option to 4/30/06
Powers Ferry Landing
Atlanta, GA
</TABLE>

(1)  License subject to chattel mortgage.

(2)  License pledged to secure lease rental.

(3)  Franchised by Company.

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

(5)  Lease assigned to franchisee.

(6)  Lease originally assigned to unaffiliated third parties. During fiscal year
     1996,  the  Company  purchased  37%  of the  leasehold  interest  from  the
     unaffiliated  third parties.  An additional 11% was purchased during fiscal
     year 1997, bringing the total interest purchased to 48%.

(7)  Location managed by an unaffiliated third party.

(8)  Business  formerly  operated by the Company pursuant to Court Order,  until
     December  31, 1996 when the Company  reacquired  ownership  of the business
     through foreclosure.

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

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


Item 3. Legal Proceedings.

   Due to the nature of the  business,  the Company is sued from time to time by
patrons,  usually for  alleged  personal  injuries  occurring  at the  Company's
business  locations.  The Company has liability  insurance which  incorporates a
semi-self-insured  plan under  which the  Company  assumes  the full risk of the
first $50,000 of exposure per  occurrence.  The Company's  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.
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

                                       21
<PAGE>
intoxicating liquors to an already "obviously intoxicated person". The Company's
insurance coverage relating to this type of incident is limited.

     Through the end of the 1990 fiscal year, the Company was uninsured for dram
shop  liability.  Florida has  restricted  its dram shop by statute,  permitting
persons  injured by an  "obviously  intoxicated  person" to bring a civil action
against the business  which had served  alcoholic  beverages to a minor or to an
individual known to be habitually addicted to alcohol. 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.

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

The major purpose of the reorganization was to reject such leases.

   On January 11, 1986,  the Bankruptcy  Court granted the Company's  motions to
reject  thirteen  leases and the  Company  was  successful  in  negotiating  the
termination of three additional  leases.  On April 7, 1986, the Bankruptcy Court
granted the Company's motion to reject two additional leases and two more leases
were  automatically  rejected  due to the  Company's  failure to assume the same
prior to May 22, 1986.  During the fiscal year ended October 3, 1987 the Company
negotiated  a  formula  with  the  Official  Committee  of  Unsecured  Creditors
("Committee"), which formula was used to calculate lease rejection damages under
the Company's  Amended Plan of  Reorganization.  Stipulations  were filed by the
Company  with all but three of these  unsecured  creditors,  which  stipulations
received Bankruptcy Court approval prior to the hearing on confirmation.

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

                                       22
<PAGE>
which  settlements  received  Bankruptcy  Court approval prior to the hearing on
confirmation.

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

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

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

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

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

   During the fourth  quarter of fiscal year 1999 the Company did not submit any
matter to a vote of the security holders.

                                       23

<PAGE>
                                     PART II

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

                        RANGE OF PER SHARE MARKET PRICES
               ADJUSTED FOR 2 FOR 1 STOCK SPLIT PAID APRIL 1, 1999

                          Fiscal 1999              Fiscal 1998
                          -----------              -----------

                         High      Low            High      Low
                         ----      ---            ----      ---

First quarter            5-1/8     3-5/8          6-3/8     3-11/16
Second quarter           8         4-3/16         6-3/4     3-9/16
Third quarter            6-7/8     3-3/4          6-5/8     5-3/8
Fourth quarter           5-3/8     4-1/8          5-11/16   4-1/8

   On December  10, 1998 the  Company  declared a cash  dividend of 20 cents per
share (pre split shares)  payable  February 1, 1999 to shareholders of record on
January 4, 1999.

  On February  26, 1999 the Company  declared a two for one stock split  payable
April 1, 1999 to shareholders of record on March 17, 1999.

Item 6. Selected Financial Data.

Not required

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

   At October 3, 1998, the Company was operating thirteen units. The Company had
interests in an additional seven units which had been franchised by the Company.
Of the units  operated by the  Company,  four were  combination  package  liquor
stores and restaurants, five were restaurants only and three were package liquor
stores only. There was one club operated by an unaffiliated  third party under a
management agreement.

   As  compared  to fiscal  year 1998,  as of October 2, 1999,  the  Company was
operating fourteen units. The Company had interests in an additional seven units
which had been franchised by the Company.  Of the units operated by the Company,
four  were  combination   package  liquor  stores  and  restaurant,   four  were
restaurants  only and four were package  liquor stores only.  There was one club
operated by an  unaffiliated  third party under a management  agreement.  During
fiscal year 1999,  one  restaurant  only was closed with the  expiration  of its
lease and the liquor license and some of the  furniture,  fixtures and equipment
were sold to an unaffiliated third party. The closing of the restaurant resulted
in a $51,000 loss to the Company. During fiscal year 1999 the Company opened

                                       24
<PAGE>
one package  liquor store only in Fort  Lauderdale,  Florida,  and purchased the
Management  Agreement  of a  franchise,  which  includes the right to manage the
franchised restaurant only.

Liquidity and Capital Resources

Cash Flows

   The following  table is a summary of the Company's  cash flows for the fiscal
years ended October 2, 1999 and October 3, 1998:
<TABLE>
<CAPTION>
                                                  Fiscal
                                               Years Ended
                                               -----------
                                               1999       1998
                                             -------    -------
                                               (in thousands)

<S>                                          <C>        <C>
Net cash provided by operating activities    $ 2,652    $ 1,060

Net cash used in investing activities         (1,032)      (760)

Net cash used in financing activities         (1,336)      (166)
                                                          ------

Net increase in cash and equivalents             284       134

Cash and equivalents, beginning of year        1,468      1,334
                                             -------    -------

Cash and equivalents, end of year            $ 1,752    $ 1,468
                                             =======    =======

</TABLE>

The Year 2000 Issue

   The Company completed the installation of a Great Plains  Accounting  Package
in fiscal  year 1999 to address the year 2000 issue at a cost of  $152,000.  The
system  has  been  tested  and is year  2000  compliant.  The  company  incurred
consultants  fees, in the amount of $113,000,  which were expensed during fiscal
year 1999.

   The Company  utilizes  POSitouch cash registers in its restaurant  operations
and Omron cash registers in its package liquor operations.  The registers record
revenues and calculate inventory. Both systems are year 2000 compliant.

Improvements

   Capital  expenditures were $934,000 and $808,000 during fiscal years 1999 and
1998,  respectively.  The capital expenditures were for upgrading existing units
serving food,  improvements  to package liquor stores and the replacement of the
corporate computer system.

                                       25
<PAGE>
   All of the Company's units require  periodic  refurbishing in order to remain
competitive . During fiscal 1992, as cash flow improved, the Company embarked on
a refurbishing  program which continued through fiscal year 1999. The budget for
fiscal year 2000 includes  approximately  $432,000 for this purpose. The Company
expects the monies for these improvements will be provided from operations.

Property and Equipment

   The Company's property and equipment, at cost, less accumulated  depreciation
and  amortization,  was  $4,004,000 at October 2, 1999 compared to $3,717,000 at
October 3, 1998. The Company's  liquor  licenses less  accumulated  amortization
were  $303,000 at October 2, 1999  compared to $358,000 at October 3, 1998.  The
Company's leased property under capital leases,  less  accumulated  amortization
was $ $93,000 at October 2, 1999  compared to  $129,000 at October 3, 1998.  The
Company's  leased property under capital leases has continued to decline because
any new leases the Company enters into are operating leases,  and thus there are
no additions to capital leases.

Long term debt

   The Company closed on its $500,000 loan with Nations Bank  (formerly  Barnett
Bank) during the first quarter of 1998 and repaid  principal of $125,000  during
the fiscal year 1998.  The balance of $375,000 was repaid in full during  fiscal
year 1999.  The Company  repaid long term debt,  including the Nations Bank note
payable,  capital lease  obligations  and Chapter 11  bankruptcy  damages in the
amount of $807,000 and $692,000 in fiscal years 1999 and 1998 respectively.

Working capital

   The table  below  summarizes  the current  assets,  current  liabilities  and
working capital for the fiscal years 1999 and 1998:

                                     Oct. 2          Oct. 3
Item                                  1999            1998
----                                 ------          ------
Current assets                     $ 4,075,000    $ 3,456,000
Current liabilities                  2,693,000      2,242,000
Working capital                      1,382,000      1,214,000

   During fiscal year 1991 and again in fiscal year 1992, the Company refinanced
existing debt due Class 6 and 8 Creditors  under the  Company's  Amended Plan by
extending the payment  schedule to the year 2002,  thereby reducing the payments
from  $500,000  per year to $200,000  per year for two years and  thereafter  to
$300,000  per year  until  paid,  but  without  reducing  the  total  amount  of
bankruptcy damages.

                                       26
<PAGE>
   Management  believes that positive cash flow from  operations will adequately
fund operations, debt reductions and planned capital expenditures in fiscal year
2000.

   The  Company's  Amended  Plan of  Reorganization  was  prepared  to allow the
Company to meet its obligations from cash generated from operations. The Amended
Plan  was  approved  by the  majority  of the  creditors  and  confirmed  by the
Bankruptcy  Court on May 5, 1987 and the Company was officially  discharged from
bankruptcy  on December 28, 1987.  As noted above,  during  fiscal year 1991 and
again in fiscal  year  1992,  the Class 6 and 8  Creditors  agreed to  refinance
existing debt by extending their payment  schedule.  See Bankruptcy  Proceedings
below and Note 6 to the consolidated financial statements.

Income Taxes

   Financial Accounting Standards Board Statement No. 109, Accounting for Income
Taxes requires, among other things,  recognition of future tax benefits measured
at enacted  rates  attributable  to  deductible  temporary  differences  between
financial  statement and income tax bases of assets and  liabilities  and to tax
net operating loss carryforwards to the extent that realization of said benefits
is more likely than not. For  discussion  regarding  the Company's net operating
loss carryforwards refer to Note 7 to the consolidated  financial statements for
fiscal year ended October 2, 1999.

Bankruptcy Proceedings

   As noted above and in Note 6 to the  consolidated  financial  statements,  on
November  4,  1985,  Flanigan's  Enterprises,  Inc.,  not  including  any of its
subsidiaries,  filed a Voluntary  Petition in the United States Bankruptcy Court
for the Southern  District of Florida seeking to reorganize  under Chapter 11 of
the Federal  Bankruptcy  Code. The primary  purposes of the petition were (1) to
reject  leases  which were  significantly  above  market rates and (2) to reject
leases on closed units which had been repossessed by or returned to the Company.

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

                                       27
<PAGE>
years, the total amount due was discounted at a rate of 9.25%. See Note 2 to the
consolidated  financial  statements  for the current  payment  schedule of these
damages.

Other Legal Matters

   Through the end of fiscal year 1990,  the Company was uninsured for dram shop
liability. See pages 12 and 13 for further discussion regarding dram shop suits.

   During fiscal year 1996, a former employee alleged that her position with the
Company was  changed  due to her  pregnancy.  The Equal  Employment  Opportunity
Commission  failed to make a  determination  on this claim  within  one  hundred
eighty (180) days of its filing and  subsequent  to the end of fiscal year 1996,
this claimant  filed suit against the Company.  The Company  disputed this claim
and vigorously defended the same. During the fourth quarter of fiscal year 1997,
the former  employee's  attorney withdrew and during the first quarter of fiscal
year 1998 the lawsuit was dismissed due to the failure of the employee to retain
substitute counsel.

Results of Operations

<TABLE>
<CAPTION>
REVENUES (in thousands):

                                 Fifty Two             Fifty Three
                                Weeks Ended            Weeks Ended
Sales                           Oct. 2, 1999           Oct. 3, 1998
-----                           ------------           ------------
<S>                           <C>       <C>         <C>      <C>
Restaurant, food              $ 10,708   51.8%      $ 10,628   52.0%
Restaurant, bar                  2,722   13.2%         2,891   14.2%
Package goods                    7,255   35.0%         6,901   33.8%
                              --------  -----       --------  -----
Total                           20,685  100.0%        20,420  100.0%

Franchise revenues                 894                   761
Owners fee                         230                   173
Joint venture income               341                   207
Other operating income             165                   206
                              --------              --------

Total Revenues                $ 22,315              $ 21,767
</TABLE>

   As the table above illustrates,  total revenues have increased for the fiscal
year ended  October 2, 1999 when  compared to the fiscal  year ended  October 3,
1998.

   During  the  third  quarter  of  fiscal  year  1998 the  Company  closed  its
restaurant  in  North  Miami  which   operated  under  the   "Flanigan's   Cafe"
servicemark.  During the first quarter of fiscal year 1999, the Company  entered
into a sublease for the property with an unaffiliated third party.

                                       28
<PAGE>
   During the second  quarter of fiscal year 1999, the Company closed a location
in Fort  Lauderdale at the expiration of the lease.  The liquor license and some
of the  equipment and fixtures were sold to an  unaffiliated  third party.  This
closing resulted in a loss of $51,000 to the Company.

   During the second  quarter of fiscal  year 1999 the  Company  entered  into a
lease for a package  liquor  store in Fort  Lauderdale,  FL. The package  liquor
store opened for business during the third quarter of fiscal year 1999.

   Restaurant food sales represented 51.8% of total sales in the fifty two weeks
ended  October  2, 1999 as  compared  to 52.0% in the fifty  three  weeks  ended
October 3,  1998.  The weekly  average of same store  restaurant  food sales was
$197,672  and  $183,711  for the fifty two weeks  ended  October 2, 1999 and the
fifty three weeks ended October 3, 1998 respectively, an increase of 7.6%.

   Restaurant bar sales  represented 13.2% of total sales in the fifty two weeks
ended  October  2, 1999 as  compared  to 14.2% in the fifty  three  weeks  ended
October 3,  1998.  The weekly  average  of same store  restaurant  bar sales was
$50,245 and $47,293 for the fifty two weeks ended  October 2, 1999 and the fifty
three weeks ended October 3, 1998 respectively, an increase of 6.2%.

   Package store sales for the second consecutive year have reversed the decline
of prior years with same store weekly sales averaging  $133,173 and $121,498 for
the fifty two weeks  ended  October  2,  1999 and the fifty  three  weeks  ended
October 3, 1998 respectively, an increase of 9.6%.

   Franchise revenue increased to $894,000 for the fifty two weeks ended October
2, 1999 as compared to $761,000 for the fifty three weeks ended October 3, 1998.
The increase in franchise revenue resulted from higher sales for the franchises,
and a joint venture  restaurant  having been open for all fifty two weeks ending
October 2, 1999 whereas it was only open for  business in the second  quarter of
fiscal year 1998.

   Owner's fee represents fees received pursuant to a Management  Agreement from
the operation of a club owned by the Company in Atlanta, Georgia. The Management
Agreement was amended effective July 1, 1996,  whereby the Company also receives
ten percent of annual sales exceeding  $150,000 per annum as additional  owner's
fees.  Income from this club was $230,000 for the fifty two weeks ended  October
2, 1999 as compared to $173,000 for the fifty three weeks ended October 3, 1998.

                                       29
<PAGE>
   During the second quarter of fiscal year 1998, the Company began  operating a
restaurant under the "Flanigan's  Seafood Bar and Grill"  servicemark as general
partner and forty two percent  owner of a limited  partnership  established  for
such purpose.  The Company reports income and investment under the equity method
of accounting.  The Company  reported  $99,000 in income for the fifty two weeks
ended October 2, 1999 as compared to a loss of $66,000 for the fifty three weeks
ended  October  3,  1998.  The  loss in  fiscal  year  1998  was  attributed  to
pre-opening  costs and  expenditures of certain  intangible costs as required by
SOP 98-5, "reporting on the costs of start-up activities".

   During the second  quarter of fiscal year 1999,  the Company formed a limited
partnership to renovate and operate a restaurant  under the "Flanigan's  Seafood
Bar and Grill"  servicemark in Kendall,  Florida,  as general  partner and forty
percent owner of the same. Due to difficulties in obtaining the required permits
to begin construction which were beyond the control of the Company, construction
began in the first quarter of fiscal year 2000 and the restaurant is expected to
open during the second  quarter of fiscal year 2000.  The Company  recognized  a
loss of  $106,000  for the fifty two weeks ended  October 2, 1999.  The loss was
attributed to pre-opening costs and expenditures of certain  intangible costs as
required by SOP-98-5, "reporting on the costs of start-up activities".

   The gross  profit  margin for  restaurant  sales were 64.2% and 62.3% for the
fiscal years 1999 and 1998 respectively.

   The gross profit margin for package goods sales were 26.6% and 26.0%, for the
fiscal years 1999 and 1998 respectively.

   Overall gross profits were 50.7% and 50.0% for the fiscal years 1999 and 1998
respectively.

Operating Costs and Expenses

   Operating  costs and expenses  for the fifty two weeks ended  October 2, 1999
were $20,772,000 compared to $20,383,000 for the fifty three weeks ended October
3, 1998.  Operating  expenses  are  comprised of the cost of  merchandise  sold,
payroll  and  related   costs,   occupancy   costs  and  selling,   general  and
administrative expenses.

   Payroll  and related  costs  which  include  workers  compensation  insurance
premiums  were  $6,135,000  and  $5,964,000  for  fiscal  years  1999 and  1998,
respectively.  The 2.9%  increase is attributed to increases in salaries paid to
restaurant and package division employees.

                                       30
<PAGE>
   Occupancy costs,  which include rent,  common area  maintenance,  repairs and
taxes  were   $1,033,000   and   $1,047,000  for  fiscal  years  1999  and  1998
respectively. The 0.1 % decrease was attributable to the closing of a restaurant
and the opening of a package store.

   Selling,  general and  administrative  expenses were $3,410,000 for the fifty
two weeks ended October 2, 1999 and  $3,163,000  for the fifty three weeks ended
October 3, 1998. The net increase of 7.8% in selling, general and administrative
expenses is due to a general increase in prices.

Other Income and Expenses

   Other  income and expense  totaled  $232,000 and $37,000 in fiscal years 1999
and 1998 respectively.

   The  decrease of $43,000 in interest  expense on  long-term  debt and damages
payable,  which were $114,000 and $157,000 for the fifty two weeks ended October
2, 1999 and the fifty  three weeks ended  October 3, 1998 is  attributed  to the
decrease  in long term debt.  The  decline of  $12,000  in  interest  expense on
obligations under capital leases, which was $34,000 and $46,000 for fiscal years
1999 and 1998,  respectively,  is the result of declining  principal balances of
the capital leases in general.

   The Company  realized  $110,000 of income in the first quarter of fiscal year
1998 from the settlement of litigation.

   The Company recovered  $157,000 from a workman's  compensation  settlement in
the  fourth  quarter  of fiscal  year  1999 for a claim in fiscal  year 1994 and
reduced by $118,000 a workman's compensation reserve from a claim in fiscal year
1993.

   The category "Other,  net" was $325,000 for the fifty two weeks ended October
2, 1999 and $162,000 for the fifty three weeks ended October 3, 1998. Other, net
in the  consolidated  statements  of income  consists of the  following  for the
fiscal years ended October 2, 1999 and October 3, 1998:
<TABLE>
<CAPTION>
                                               Fiscal
                                             Years Ended
                                       ---------------------
                                           1999       1998
                                       ---------   ---------
<S>                                    <C>         <C>
Non-franchise related rental income     $ 36,000    $ 45,000
Loss on retirement of fixed assets       (66,000)    (37,000)
Settlement of litigation                     -       110,000
Insurance recovery & reserve reduction   275,000         -
Sale of liquor license                    30,000         -
Miscellaneous                             50,000      44,000
                                       ---------   ---------

Other Net                              $ 325,000   $ 162,000
                                       =========   =========
</TABLE>

                                       31
<PAGE>
Trends

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

  The Company utilized the balance of its net operating loss carryforward during
fiscal year 1999.  The Company will be fully  taxable for fiscal year 2000 which
will create a material increase in its Federal and State tax expense.

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

Other Matters

   Impact of Inflation

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

   Post Retirement Benefits Other Than Pensions

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

   Subsequent Events

   During the fourth  quarter of fiscal year 1999,  the Company  entered  into a
contract  for the purchase of a two story  office  building in Fort  Lauderdale,
Florida for a purchase  price of $850,000,  which will be used as the  Company's
corporate  office.  The  Company  also plans to renovate a portion of the ground
floor of the office  building  for use as a package  liquor  store.  The Company
closed on the purchase of the office building during the first quarter of fiscal
year 2000, paying the entire purchase price in cash.

                                       32
<PAGE>
Item 8. Financial Statements and Supplementary Data.

   Financial  statements  of the Company at October 2, 1999 and October 3, 1998,
which  include each of the two years in the period ended October 2, 1999 and the
independent  certified public accountants'  report thereon,  are incorporated by
reference from the 1999 Annual Report to Shareholders, included herein.

Item 9. Change in Certifying Accountant.

   On  February  26,  1999,  the Audit  Committee  recommended  and the Board of
Directors  adopted a resolution  authorizing  management  (i) to dismiss  Arthur
Andersen,  LLP ("AA"), as the Company's independent  accountant,  effective upon
management's  notification to AA of such dismissal,  and (ii)  concurrently with
such dismissal,  to engage Rachlin, Cohen & Holtz, LLP ("RCH"), as the Company's
independent accountant for the fiscal year ended October 2, 1999.

   On March 4, 1999, the Company notified AA of its dismissal.  Also on March 4,
1999, the Company engaged RCH as the Company's independent accountant, effective
immediately.  During  fiscal  years 1997 and 1998,  and  during  the  subsequent
interim period preceding the decision to change independent accountant,  neither
the  Company  nor  anyone on its  behalf  consulted  RCH  regarding  either  the
application  of  accounting  principles  to  a  specified  transaction,   either
completed  or proposed,  or the type of audit  opinion that might be rendered on
the Company's financial statements, and neither a written report nor oral advice
was provided to the Company by RCH with respect to any such consultation.

   AA audited the Company's annual consolidated  financial  statements as of and
for each of the fiscal years from the date of the Company's  initial offering in
1969  through  the fiscal  year ended  October 3, 1998,  ("Historical  Financial
Statements").  AA's  auditors' reports  for at least the past seven (7) years on
these  Historical  Financial  Statements did not contain any adverse  opinion or
disclaimer  of opinion and were not  qualified  or  modified as to  uncertainty,
audit scope or accounting principles.

   By a  current  report  on Form 8-K,  dated  March 5, 1999 and filed  with the
Securities  and Exchange  Commission on March 12, 1999, in connection  with AA's
dismissal,  the Company  reported  that  during the two (2) most  recent  fiscal
years,  and in the subsequent  interim period,  there had been no  disagreements
between the Company's management and AA on any matters of accounting  principles
or practices, Financial Statements,  disclosure or auditing scope and procedures
which,  if not resolved to the  satisfaction of AA, would have caused AA to make
reference to the matters in an auditor's  report. By letter dated March 5, 1999,
and filed with the Securities and Exchange  Commission,  AA indictaed  agreement
with the statements contained within the form 8-K.

                                       33
<PAGE>
                                    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  2000  Annual   Meeting  of
Shareholders,  to be filed with the Securities and Exchange  Commission pursuant
to regulation 14A under the Securities and Exchange Act of 1934, as amended (the
2000 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 2000  Proxy  Statement  under the  caption
"Executive Compensation" is incorporated by reference.

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

   The  information set forth under the caption  "Security  Ownership of Certain
Beneficial Owners and Management" in the 2000 Proxy Statement is incorporated by
reference.

Item 13. Certain Relationships and Related Transactions.

   The information set forth under the caption  "Election of Directors - Certain
Relationships  and  Related   Transactions"  in  the  2000  Proxy  Statement  is
incorporated by reference.

                                     PART IV

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

(a) 1. Financial Statements

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

    2. Exhibits

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

(b) Reports on Form 8-K

         No reports on form 8-K were filed  during the fourth  quarter of fiscal
year 1999 or subsequent to year end.

                                       34
<PAGE>
                                Index to Exhibits
                                Item (14) (a) (2)

                                   Description

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

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

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

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

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

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

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

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

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

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

                                       35
<PAGE>
(10)(r)  Limited  Partnership  Agreement of CIC  Investors  #13,  Ltd,.  between
Flanigan's Enterprises,  Inc., as General Partner and fifty percent owner of the
limited partnership,  and Hotel Properties, LTD. (Item 14 (a)(10)(r) of the Form
10-KSB dated September 30, 1995 is incorporated herein by reference).

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

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

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

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

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

(10)(x) Limited Partnership  Agreement of CIC Investors #70, Ltd. dated February
1999  between  Flanigan's  Enterprises,  Inc. as General  Partner  and  numerous
limited  partners,  including  Flanigan's  Enterprises,  Inc. as limited partner
owning forty percent of the limited partnership.

(11) Statement regarding  computation of per share earnings is set forth in this
Annual Report on Form 10-KSB.

(13) Registrant's Form 10-KSB  constitutes the Annual Report to Shareholders for
the fiscal year ended October 2, 1999.

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

                                       36
<PAGE>
                                   SIGNATURES

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

                            Flanigan's Enterprises, Inc.
                            Registrant

                            By: JOSEPH G. FLANIGAN               Date:    1/3/00
                                ------------------                        ------
                                Chief Executive Officer

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

JOSEPH G. FLANIGAN      Chairman of the Board,      Date:    1/3/00
------------------      Chief Executor Officer,              ------
Joseph G. Flanigan      and President

EDWARD A. DOXEY         Chief Financial Officer     Date:    1/3/00
---------------         Secretary and Director               ------
Edward A. Doxey

CHARLES KUHN            Director                    Date:    1/3/00
------------                                                 ------
Charles Kuhn

GERMAINE M. BELL        Director                    Date:    1/3/00
----------------                                             ------
Germaine M. Bell

CHARLES E. MCMANUS      Director                    Date:    1/3/00
------------------                                           ------
Charles E. McManus

JEFFREY D. KASTNER      Assistant Secretary         Date:    1/3/00
-------------------     and Director                         ------
Jeffrey D. Kastner

WILLIAM PATTON          Vice President, Public      Date:    1/3/00
--------------          Relations and Director               ------
William Patton

JAMES G. FLANIGAN       Director                    Date:    1/3/00
-----------------                                            ------
James G. Flanigan

PATRICK J. FLANIGAN     Director                    Date:    1/3/00
-------------------                                          ------
Patrick J. Flanigan

                                       38
<PAGE>
                  FLANIGAN'S ENTERPRISES, INC. and SUBSIDIARIES

                   INDEX TO FINANCIAL STATEMENTS AND SCHEDULES



                                                                 PAGE
                                                                 ----

REPORTS OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS              F-1-F-2

CONSOLIDATED FINANCIAL STATEMENTS

 Balance Sheet                                                   F-3

 Statements of Income                                            F-4

 Statements of Stockholder's Equity                              F-5

 Statements of Cash Flows                                        F-6-F-7

 Notes to Financial Statements                                   F-8-F-24


                                       39
<PAGE>
               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

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

We have  audited  the  accompanying  consolidated  balance  sheet of  Flanigan's
Enterprises,  Inc.  and  Subsidiaries  as of October 2,  1999,  and the  related
consolidated  statements of income,  stockholders' equity and cash flows for the
year then ended. These consolidated  financial statements are the responsibility
of the  Company's  management.  Our  responsibility  is to express an opinion on
these consolidated financial statements based on our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  consolidated  financial  position  of  Flanigan's
Enterprises,  Inc. and  Subsidiaries as of October 2, 1999, and the consolidated
results  of their  operations  and their  cash  flows for the year then ended in
conformity with generally accepted accounting principles.

                            RACHLIN COHEN & HOLTZ LLP

Fort Lauderdale, Florida
November 24, 1999
     except for last paragraph of Note 15, as to which
     the date is December 14, 1999

                                      F-1
<PAGE>
               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholders of
   Flanigan's Enterprises, Inc.:

We  have   audited  the   accompanying   consolidated   statements   of  income,
stockholders' equity and cash flows of Flanigan's  Enterprises,  Inc. (a Florida
corporation)  and  subsidiaries  for the  year  ended  October  3,  1998.  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 audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the results of operations  and cash flows of Flanigan's
Enterprises,  Inc.  and  subsidiaries  for the year  ended  October  3,  1998 in
conformity with generally accepted accounting principles.

ARTHUR ANDERSEN LLP

Fort Lauderdale, Florida,
   December 10, 1998.

                                      F-2
<PAGE>
<TABLE>
<CAPTION>
                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET

                                 OCTOBER 2, 1999

                                     ASSETS
<S>                                                                        <C>
Current Assets:
    Cash and cash equivalents                                              $  1,752,000
    Notes and mortgages receivable, current maturities, net                     212,000
    Inventories                                                               1,428,000
    Prepaid expenses                                                            402,000
    Deferred tax asset                                                          281,000
                                                                           ------------
      Total current assets                                                    4,075,000

Property and Equipment                                                        4,004,000

Leased Property Under Capital Leases, Net                                        93,000
                                                                           ------------

Other Assets:
    Liquor licenses, net                                                        303,000
    Notes and mortgages receivable, net                                         171,000
    Investments in joint ventures                                             1,471,000
    Deferred tax asset                                                          349,000
    Other                                                                       306,000
                                                                           ------------
      Total other assets                                                      2,600,000
                                                                           ------------
      Total assets                                                         $ 10,772,000
                                                                           ============

<CAPTION>
                      LIABILITIES AND STOCKHOLDERS' EQUITY
<S>                                                                        <C>
Current Liabilities:
    Accounts payable and accrued expenses                                  $  1,594,000
    Due to franchisees                                                          699,000
    Current portion of long-term debt                                            84,000
    Current obligations under capital leases                                     38,000
    Current portion of damages payable on terminated or rejected leases         278,000
                                                                           ------------
         Total current liabilities                                            2,693,000

Long-Term Debt, Net of Current Maturities                                       500,000
                                                                           ------------

Obligations Under Capital Leases, Net of Current Portion                        205,000
                                                                           ------------

Damages Payable on Terminated or Rejected Leases, Net of Current Portion        394,000
                                                                           ------------

Commitments, Contingencies, Other Matters and Subsequent Event

Stockholders' Equity:
    Common stock, $.10 par value; 5,000,000 shares authorized;
      4,197,642 shares issued                                                   420,000
    Capital in excess of par value                                            6,058,000
    Retained earnings                                                         5,416,000
    Notes receivable on sale of common stock                                   (192,000)
    Less - treasury stock, at cost, 2,247,193 shares                         (4,722,000)
                                                                           ------------
         Total stockholders' equity                                           6,980,000
                                                                           ------------
Total liabilities and stockholders' equity                                 $ 10,772,000
                                                                           ============
</TABLE>

                 See notes to consolidated financial statements.

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

                        CONSOLIDATED STATEMENTS OF INCOME

                       OCTOBER 2, 1999 AND OCTOBER 3, 1998

                                                                 1999            1998
                                                             ------------    ------------
<S>                                                          <C>             <C>
Revenues:
    Restaurant food sales                                    $ 10,708,000    $ 10,628,000
    Restaurant bar sales                                        2,722,000       2,891,000
    Package goods sales                                         7,255,000       6,901,000
    Franchise-related revenues                                    894,000         761,000
    Owner's fee                                                   230,000         173,000
    Joint venture income                                          341,000         207,000
    Other operating income                                        165,000         206,000
                                                             ------------    ------------
                                                               22,315,000      21,767,000

Costs and Expenses:
    Cost of merchandise sold:
       Restaurants and lounges                                  4,871,000       5,102,000
       Package goods                                            5,323,000       5,107,000
    Payroll and related costs                                   6,135,000       5,964,000
    Occupancy costs                                             1,033,000       1,047,000
    Selling, general and administrative expenses                3,410,000       3,163,000
                                                             ------------    ------------
                                                               20,772,000      20,383,000

Income from Operations                                          1,543,000       1,384,000
                                                             ------------    ------------

Other Income (Expense):
    Interest expense on obligations under capital leases          (34,000)        (46,000)
    Interest expense on long-term debt and damages payable       (114,000)       (157,000)
    Interest income                                                52,000          72,000
    Recognition of deferred gains                                   3,000           6,000
    Other                                                         325,000         162,000
                                                             ------------    ------------
                                                                  232,000          37,000
                                                             ------------    ------------

Income Before Provision for Income Taxes                        1,775,000       1,421,000
                                                             ------------    ------------

Provision (Benefit) for Income Taxes:
    Current                                                        37,000          33,000
    Deferred                                                     (630,000)           --
                                                             ------------    ------------
                                                                 (593,000)         33,000

Net Income                                                   $  2,368,000    $  1,388,000
                                                             ============    ============

Net Income Per Common Share:
    Basic                                                    $       1.21    $       0.76
                                                             ============    ============
    Diluted                                                  $       1.15    $       0.69
                                                             ============    ============

Weighted Average Shares and Equivalent Shares Outstanding:
    Basic                                                       1,957,000       1,830,000
                                                             ============    ============
    Diluted                                                     2,062,000       2,020,000
                                                             ============    ============
</TABLE>
                 See notes to consolidated financial statements.

                                      F-4
<PAGE>
<TABLE>
<CAPTION>
                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                       OCTOBER 2, 1999 AND OCTOBER 3, 1998

                                                                                                              Notes
                                                     Common Stock          Capital in                       Receivable
                                                 --------------------       Excess of       Retained        on Sale of
                                                 Shares        Amount       Par Value       Earnings       Common Stock
                                                 ------        ------       ---------       --------       ------------
<S>                                              <C>           <C>          <C>            <C>                  <C>
Balance, September 27, 1997                       4,197,642     $420,000     $ 6,185,000    $ 1,846,000         $        -

Year Ended October 3, 1998:

    Net income                                           -            -               -      1,388,000                   -

    Stock options exercised                              -            -               -              -                   -
                                                 ---------     --------     -----------    -----------          ----------

Balance, October 3, 1998                         4,197,642      420,000       6,185,000      3,234,000                   -

Year Ended October 2, 1999:

    Dividends paid ($0.10 per share)                     -            -               -       (186,000)                  -

    Net income                                           -            -               -      2,368,000                   -

    Purchase of treasury stock                           -            -               -              -                   -

    Common stock issued in
      exchange for notes receivable                      -            -          61,000              -            (198,000)

    Exchange of shares - exercise
      of stock options                                   -            -        (188,000)             -                   -

    Payments received on
      notes receivable                                   -            -               -              -               6,000
                                                 ---------     --------     -----------    -----------          ----------

Balance, October 2, 1999                         4,197,642     $420,000     $ 6,058,000    $ 5,416,000          $ (192,000)
                                                 =========     ========     ===========    ===========          ==========
<PAGE>
<CAPTION>

                                                        Treasury Stock
                                                    ---------------------
                                                    Shares         Amount          Total
                                                    ------         ------          -----
<S>                                                <C>             <C>           <C>
Balance, September 27, 1997                        2,383,442      $(4,812,000)   $ 3,639,000

Year Ended October 3, 1998:

    Net income                                             -                -      1,388,000

    Stock options exercised                          (44,000)         78,000         78,000
                                                   ---------       -----------   -----------

Balance, October 3, 1998                           2,339,442       (4,734,000)     5,105,000

Year Ended October 2, 1999:

    Dividends paid ($0.10 per share)                       -                -       (186,000)

    Net income                                             -                -      2,368,000

    Purchase of treasury stock                         68,700         (313,000)      (313,000)

    Common stock issued in
      exchange for notes receivable                   (68,000)         137,000              -

    Exchange of shares - exercise
      of stock options                                (92,949)         188,000              -

    Payments received on
      notes receivable                                      -                -          6,000
                                                   ---------       -----------   -----------

Balance, October 2, 1999                           2,247,193       $(4,722,000)  $ 6,980,000
                                                   =========       ===========   ===========
</TABLE>

                 See notes to consolidated financial statements.

                                      F-5
<PAGE>
<TABLE>
<CAPTION>
                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                 YEARS ENDED OCTOBER 2, 1999 AND OCTOBER 3, 1998

                                                                          1999           1998
                                                                       -----------    -----------
<S>                                                                    <C>            <C>
Cash Flows from Operating Activities:
    Net income                                                         $ 2,368,000    $ 1,388,000
    Adjustments to reconcile net income to net cash provided by
       operating activities:
         Depreciation and amortization                                     637,000        655,000
         Deferred income taxes benefit                                    (630,000)          --
         Reduction of uncollectible notes and
            mortgages receivable                                              --         (124,000)
         Recognition of deferred gains and other deferred income            (3,000)        (6,000)
         Loss on disposal of property, equipment and liquor licenses        36,000         37,000
         Joint venture income                                             (341,000)          --
    Changes in operating assets and liabilities:
       (Increase) decrease in:
         Receivables                                                       208,000       (151,000)
         Inventories                                                      (191,000)        16,000
         Prepaid expenses                                                   29,000        (98,000)
         Other assets                                                     (152,000)       (96,000)
       Increase (decrease) in:
         Accounts payable and accrued expenses                              (8,000)      (561,000)
         Due to franchisees                                                699,000           --
                                                                       -----------    -----------
                 Net cash provided by operating activities               2,652,000      1,060,000
                                                                       -----------    -----------

Cash Flows from Investing Activities:
    Collections on notes and mortgages receivable                           95,000         48,000
    Purchase of property and equipment                                    (934,000)      (808,000)
    Investment in joint venture                                           (606,000)          --
    Distributions from joint ventures                                      413,000           --
                                                                       -----------    -----------
                 Net cash used in investing activities                  (1,032,000)      (760,000)
                                                                       -----------    -----------

Cash Flows from Financing Activities:
    Borrowings of long-term debt                                              --          500,000
    Payments of long-term debt                                            (450,000)      (362,000)
    Payments of obligations under capital leases                           (76,000)       (70,000)
    Payments of damages payable on terminated or rejected leases          (281,000)      (260,000)
    Due to Pennsylvania limited partnership                                (30,000)       (52,000)
    Purchase of treasury stock                                            (313,000)          --
    Dividends paid                                                        (186,000)          --
    Proceeds from exercise of options                                         --           78,000
                                                                       -----------    -----------
                 Net cash used in financing activities                  (1,336,000)      (166,000)
                                                                       -----------    -----------

Net Increase in Cash and Cash Equivalents                                  284,000        134,000

Cash and Cash Equivalents, Beginning                                     1,468,000      1,334,000
                                                                       -----------    -----------

Cash and Cash Equivalents, Ending                                      $ 1,752,000    $ 1,468,000
                                                                       ===========    ===========
</TABLE>
                                                                     (Continued)

                See notes to consolidated financial statements.

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

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                 YEARS ENDED OCTOBER 2, 1999 AND OCTOBER 3, 1998
                                   (Continued)

                                                                                                                 (Continued)

                                                                                1999         1998
                                                                             -----------   ---------
<S>                                                                          <C>           <C>
Supplemental Disclosure of Cash Flow Information:
    Cash paid during the year for:
       Interest                                                              $   168,000   $ 199,000
                                                                             ===========   =========
       Income taxes                                                          $    52,000   $  33,000
                                                                             ===========   =========

    Non-Cash Financing and Investing Activities:
       Retirement of unrealizable general ledger system, at net book value   $      --     $  37,000
                                                                             ===========   =========
       Investment in joint venture                                           $      --     $ (50,000)
                                                                             ===========   =========
       Receipt of liquor license in connection with litigation settlement    $      --     $  35,000
                                                                             ===========   =========
       Common stock issued for notes receivable                              $   198,000   $    --
                                                                             ===========   =========
       Notes receivable for sales of property, equipment and
         intangible assets                                                   $   196,000   $    --
                                                                             ===========   =========

</TABLE>




                See notes to consolidated financial statements.

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                            OCTOBER 2, 1999 AND 1998


NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Organization and Capitalization

             Incorporated in 1959, Flanigan's Enterprises, Inc. ("Flanigan's" or
             the "Company") operates in South Florida as a chain of full-service
             restaurants  and package  liquor  stores.  At October 2, 1999,  the
             Company owned and/or operated five full-service restaurants,  three
             package liquor stores and four combination full-service restaurants
             and package liquor stores in Florida. In addition,  Flanigan's owns
             one club in Georgia  which is  operated  pursuant  to a  management
             agreement  with  an  unrelated  third  party.   The  Company  holds
             interests  in four of the eleven  franchised  units  through  joint
             venture investments.  The Company's  restaurants are operated under
             the  "Flanigan's  Seafood  Bar and  Grill"  servicemark  while  the
             Company's  package  stores  are  operated  under  the "Big  Daddy's
             Liquors" servicemark.

             The Company's Articles of Incorporation,  as amended, authorize the
             Company  to issue and have  outstanding  at any one time  5,000,000
             shares  of  common  stock  at a par  value  of  $.10.  The  Company
             authorized and effected a 2-for-1 stock split for  stockholders  of
             record  on  March  17,  1999.  This  stock  split  has  been  given
             retroactive effect in these consolidated financial statements.

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

         Principles of Consolidation

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

             The entities included in these  consolidated  financial  statements
             are as follows:

               Flanigan's Enterprises, Inc.
               Flanigan's Management Services, Inc.
               Flanigan's Enterprises, Inc. of Georgia
               Flanigan's Enterprises, Inc. of Pa.
               Seventh Street Corp.
               Big Daddy's #48, Inc.

         Use of Estimates

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

                                      F-8
<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 a
             maturity of three months or less at the date of purchase to be cash
             equivalents.

         Inventories

             Inventories,  which consist  primarily of packaged liquor products,
             are stated at the lower of cost (first in, first out) or market.

         Liquor Licenses

             The cost of liquor  licenses  purchased  prior to October  21, 1970
             (the date Accounting Principles Board ("APB") Opinion No. 17 became
             effective),  amounted to approximately $130,000 at October 2, 1999.
             These  licenses are not amortized  unless an impairment in value is
             indicated.  The costs of all liquor licenses acquired subsequent to
             October 21, 1970 are amortized over a period of 40 years.

         Property and Equipment

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

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

         Investment in Joint Ventures

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

         Concentrations of Credit Risk

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


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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)

NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         Concentrations of Credit Risk (Continued)

             From time to time  during the year,  the  Company  had  deposits in
             financial  institutions in excess of the federally  insured limits.
             At October 2, 1999, the Company had deposits in excess of federally
             insured limits of approximately  $1,639,000.  The Company maintains
             its cash with high quality financial institutions which the Company
             believes limits these risks.

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

         Advertising Costs

             Advertising  costs are  expensed  as  incurred.  Advertising  costs
             incurred  for the years  ended  October 2, 1999 and October 3, 1998
             were $160,000 and $226,000, respectively.

         Fair Value of Financial Instruments

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

         Newly Issued Accounting Pronouncements

             In June 1997, the Financial  Accounting Standards Board issued SFAS
             No. 130, "Reporting Comprehensive Income" and No. 131, "Disclosures
             About Segments of an Enterprise and Related Information".  SFAS No.
             130   establishes    standards   for   reporting   and   displaying
             comprehensive income, its components and accumulated balances. SFAS
             No. 131  establishes  standards  for the way that public  companies
             report  information  about operating  segments in annual  financial
             statements  and requires  reporting of selected  information  about
             operating  segments in interim  financial  statements issued to the
             public.  Both  SFAS  No.  130 and SFAS No.  131 are  effective  for
             periods  beginning  after  December 15, 1997.  The Company  adopted
             these new accounting standards in fiscal year 1999.

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)

NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         Newly Issued Accounting Pronouncements (Continued)

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

             Historically,   the  Company  has  not  entered  into   derivatives
             contracts  to hedge  existing  risks or for  speculative  purposes.
             Accordingly,  the  Company  does  not  expect  adoption  of the new
             standard on October 1, 2000 to affect its financial statements.

             In March 1998, the Accounting  Standards Executive Committee issued
             Statement of Position  ("SOP") 98-1,  "Accounting  for the Costs of
             Computer Software Developed or Obtained for Internal Use." SOP 98-1
             requires  all costs  related to the  development  of  internal  use
             software   other  than  those  incurred   during  the   application
             development stage to be expensed as incurred. Costs incurred during
             the  application  development  stage are required to be capitalized
             and amortized over the estimated  useful life of the software.  SOP
             98-1 was  adopted by the  Company in fiscal 1999 and did not have a
             material effect on the Company's  financial  position or results of
             operations.

         Income Taxes

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

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)

NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         Stock-Based Compensation

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

         Long-Lived Assets

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

NOTE 2.  NOTES AND MORTGAGES RECEIVABLES

         Receivables,  net of allowances for uncollectible  amounts and deferred
         gains, consist of the following at October 2, 1999:
<TABLE>
<CAPTION>
<S>                                                                                  <C>
           Notes  and  mortgages  receivable  from  unrelated  parties,  bearing
              interest at rates ranging from 9% to 15% and due in varying
              installments through 2002                                              $225,000

           Notes and mortgages receivable from related parties, bearing interest
              at rates ranging from 10% to 14% and due in varying
              installments through 2007                                               125,000

           Various noninterest-bearing receivables currently due                      127,000
                                                                                     --------
                                                                                      477,000
           Less deferred gains                                                         94,000
                                                                                     --------
                                                                                      383,000
           Amount representing current portion                                        212,000
                                                                                     --------
                                                                                     $171,000
                                                                                     ========
</TABLE>

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)

NOTE 2.  NOTES AND MORTGAGES RECEIVABLES (Continued)

         The majority of the notes and mortgages  receivable  represent  amounts
         owed to the  Company  for store  operations  which were sold.  Unless a
         significant  amount of cash is received on the sale, a pro rata portion
         of the gain is deferred  and  recognized  only as payments on the notes
         and  mortgages  are  received  by the  Company.  Any losses on sales of
         stores are recognized  currently.  During fiscal 1999 and 1998,  $3,000
         and $6,000 of deferred  gains were  recognized on  collections  of such
         notes receivable.

         Future scheduled payments on the receivables at October 2, 1999 consist
         of the following:

              2000                         $212,000
              2001                           35,000
              2002                           55,000
              2003                           21,000
              2004                           18,000
              Thereafter                    136,000
                                           --------
                                           $477,000
                                           ========

NOTE 3.  PROPERTY AND EQUIPMENT

         Property and equipment at October 2, 1999 consisted of the following:

         Land and land improvements                              $   836,000
         Vehicles                                                    122,000
         Furniture and equipment                                   5,412,000
         Leasehold interests and improvements                      5,154,000
                                                                 -----------
                                                                  11,524,000
         Less accumulated depreciation and
            amortization                                           7,520,000
                                                                 -----------
                                                                 $ 4,004,000
                                                                 ===========

NOTE 4.  INVESTMENTS IN JOINT VENTURES

         Miami, Florida

             The  Company  operates a  restaurant  in Miami,  Florida  under the
             "Flanigan's Seafood Bar and Grill" servicemark  pursuant to a joint
             venture  agreement.  The Company is the  general  partner and has a
             fifty percent limited partnership interest.

         Fort Lauderdale, Florida

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

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)

NOTE 4.  INVESTMENTS IN JOINT VENTURES (Continued)

         Surfside, Florida

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

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

         Kendall, Florida

             During  1999,   the  Company  made  an   investment  in  a  limited
             partnership which will construct and operate a restaurant under the
             "Flanigan's Seafood Bar and Grill" servicemark in Kendall, Florida.
             Construction  was begun in late 1999 and the restaurant is expected
             to open in early 2000. The Company acts as the general  partner and
             has a forty  percent  limited  partnership  interest.  The  Company
             recognized a loss on the equity method relating to this partnership
             of $106,000  due  primarily to the  expensing of start-up  costs as
             required  by  SOP  98-5,   "Reporting  on  the  Costs  of  Start-up
             Activities."

         The following is a summary of condensed unaudited financial information
         pertaining to the Company's joint venture investments:
<TABLE>
<CAPTION>
                                                                     1999            1998
                                                                     ----            ----
<S>                                                              <C>            <C>
           Financial Position:
             Current assets                                      $   564,000    $   205,000
             Non-current assets                                    3,038,000      2,960,000
             Current liabilities                                     437,000        324,000
             Non-current liabilities                                 548,000        589,000

           Operating Results:
             Revenues                                             $5,609,000     $6,083,000
             Gross profit                                          3,600,000      3,345,000
             Net income                                              424,000        854,000
</TABLE>

NOTE 5.  ACCOUNTS PAYABLE AND ACCRUED EXPENSES

         Accounts  payable  and accrued  expenses  consist of the  following  at
         October 2, 1999:

           Accounts payable                                       $  902,000
           Salaries and wages                                        319,000
           Property taxes                                            115,000
           Potential uninsured claims                                101,000
           Franchisee advance funds                                   40,000
           Other                                                     117,000
                                                                  ----------
                                                                  $1,594,000
                                                                  ==========

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)

NOTE 5.  ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Continued)

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

NOTE 6.  DAMAGES PAYABLE ON TERMINATED OR REJECTED LEASES

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

         In fiscal 1986 in connection with the bankruptcy  petition,  Flanigan's
         recorded  estimated  damages of  $4,278,000  for claims for losses as a
         result of rejected leases.  Because the damage payments were to be made
         over nine  years,  the total  amount  due was  discounted  at a rate of
         9.25%,  Flanigan's then effective borrowing rate. Remaining liabilities
         for damage  payments are included as "Damages  Payable on Terminated or
         Rejected Leases" in the accompanying  consolidated balance sheet. Based
         on the borrowing rate currently available to the Company for bank loans
         with similar  terms and average  maturities,  the fair value of damages
         payable on terminated and rejected leases is approximately $672,000.

         As of October 2,  1999,  damages  payable  on  terminated  or  rejected
         leases, including imputed interest, mature as follows:

                 2000                                            $300,000
                 2001                                             300,000
                 2002                                             119,000
                                                                 --------
                    Total                                         719,000
                 Less amount representing interest                 47,000
                                                                 --------
                                                                  672,000
                 Less current maturities                          278,000
                                                                 --------
                 Long-term maturities                            $394,000
                                                                 ========

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)

NOTE 7.  INCOME TAXES

         The components of the Company's  provision  (benefit) for income taxes,
         for the fiscal years ended 1999 and 1998 are as follows:
<TABLE>
<CAPTION>
                                                                     1999          1998
                                                                     ----          ----
<S>                                                              <C>             <C>
          Current:
             Federal                                             $   24,000      $29,000
             State                                                   13,000        4,000
                                                                  ---------      -------
                                                                     37,000       33,000
          Deferred:
             Federal                                               (610,000)           -
             State                                                  (20,000)           -
                                                                  ---------      -------
                                                                   (630,000)           -
                                                                  ---------      -------
                                                                  $(593,000)     $33,000
                                                                  =========      =======
</TABLE>

         A reconciliation  of income tax computed at the statutory  federal rate
         to income tax expense (benefit) is as follows:
<TABLE>
<CAPTION>
                                                                    1999          1998
                                                                    ----          ----
<S>                                                              <C>          <C>
          Tax provision at the statutory rate of 34%              $582,000     $ 483,000
          State income taxes, net of federal income tax             10,000         3,000
          Change in valuation allowance                           (983,000)     (489,000)
          Tip and alternative minimum tax credit carryforwards     250,000             -
          Other                                                     48,000        36,000
                                                                 ---------    ----------
                                                                 $(593,000)   $   33,000
                                                                 =========    ==========
</TABLE>

         At October 2, 1999,  the Company has available  tax net operating  loss
         carryforwards of approximately  $100,000 which expire through 2006, tip
         credit  carryforwards  of  approximately  $200,000 which expire through
         2015, and alternative minimum tax credit carryforwards of approximately
         $50,000 which do not expire.

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

         The components of the deferred tax assets were as follows at October 2,
         1999:

           Current:

              Accruals for potential uninsured claims            $ 34,000
              Discount on damages payable                         (11,000)
              Joint venture investments                           (26,000)
              Net operating loss carryforward                      34,000
              Tip credit carryforward                             200,000
              Alternative minimum tax credit                       50,000
                                                                 --------
                                                                 $281,000
                                                                 ========

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)

NOTE 7.  INCOME TAXES (Continued)

           Long Term:

              Book/tax differences in property and equipment     $299,000
              Leases, capitalized for books only                   50,000
                                                                 --------
                                                                 $349,000
                                                                 ========

NOTE 8.  LONG-TERM DEBT

         Long-term debt consists of the following at October 2, 1999:

         Mortgage payable, secured by land, bearing interest
         at 8%; payable in monthly installments of principal
         and interest, maturing in April 2007                           $344,000

         Notes payable to various employees, related and
         unrelated parties, secured by various company
         assets, bearing interest at 12%, payable in monthly
         installments of principal and interest, maturing in
         July 2002                                                       240,000
                                                                         584,000

         Less current portion                                             84,000
                                                                        --------
                                                                        $500,000
                                                                        ========

         Long-term debt at October 2, 1999 matures as follows:

                                                          Amount
                                                         --------
            2000                                        $  84,000
            2001                                           95,000
            2002                                           90,000
            2003                                           12,000
            2004                                           12,000
            Thereafter                                    291,000
                                                         --------
                                                         $584,000
                                                         ========

NOTE 9.  COMMITMENTS, CONTINGENCIES AND OTHER MATTERS

         Leases

             The Company  leases a substantial  portion of the land and building
             used in its  operations  under leases with initial  terms  expiring
             between 1999 and 2049. Renewal options are available on many of the
             leases.  In  certain  instances,   lease  rentals  are  subject  to
             cost-of-living  increases or fair market rental  appraisals  and/or
             sales overrides.  Certain  properties are subleased through various
             expiration dates.

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)

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

         Leases (Continued)

             Leased   property   under   capital   leases  is   amortized  on  a
             straight-line  basis  over the lease  term,  and  interest  expense
             (which is based on the Company's  incremental borrowing rate at the
             inception of the lease) is accrued on the basis of the  outstanding
             capital lease obligation.  Rentals relating to operating leases are
             expensed currently.

             Future   minimum   lease   payments   under   capital   leases  and
             non-cancelable operating leases are as follows:
<TABLE>
<CAPTION>
                                                            Capital        Operating
                                                             Leases          Leases
                                                             ------          ------
<S>                                                        <C>            <C>
   2000                                                    $  77,000      $  858,000
   2001                                                       55,000         581,000
   2002                                                       32,000         403,000
   2003                                                       32,000         371,000
   2004                                                       32,000         358,000
   Thereafter                                                171,000       1,020,000
                                                           ---------      ----------
      Total                                                  399,000      $3,591,000
                                                                          ==========
Less amount representing interest                            156,000
                                                           ---------
Present value of minimum lease payments                      243,000
Less current obligations under capital leases                 38,000
                                                           ---------
                                                           $ 205,000
                                                           =========
</TABLE>

             Total rent expense for all operating  leases  (including those with
             an  initial  term of less than one year and net of  subleases)  was
             $695,000  and  $672,000  in 1999  and  1998,  respectively,  and is
             included  in  "Occupancy  costs" in the  accompanying  consolidated
             statements of income.

             The Company  guarantees  various leases for franchisees.  Remaining
             rental  commitments  required under these leases are  approximately
             $1,712,000.

         Franchise Programs

             At  October  2,  1999,  the  Company  operated  seven  units  under
             franchise   agreements   and  three  units   under  joint   venture
             agreements.  Additionally,  the  Company  has one other  unit under
             construction  under a joint venture  agreement  (see Note 4). Under
             the franchise  agreements,  the Company agrees to provide guidance,
             advice and management  assistance to the  franchisees.  The Company
             also  agrees to sponsor  and manage  cooperative  buying  groups on
             behalf  of the  franchisees  for the  purchase  of  inventory.  The
             franchise   agreements   provide   for  fees  to  the   Company  of
             approximately  3% of gross sales. Of the seven  franchised  stores,
             five are owned or  operated  by  related  parties.  When  received,
             initial  franchise  fees are  deferred  and  recognized  ratably as
             payments  are  received  on the related  notes.  The Company is not
             currently offering or accepting new franchises.

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)

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

         Employment Agreements

             Chief Executive Officer

                The Company has entered into an  employment  agreement  with the
                Chief Executive Officer which is renewable  annually on December
                31. The  agreement  provides,  among  other  things,  for a base
                annual salary not to exceed $150,000,  a performance bonus equal
                to fifteen  percent of pre-tax  net income in excess of $650,000
                and an option to purchase 4.99% of the outstanding  common stock
                of the Company  (but not less than  45,350  shares) at $2.48 per
                share (post-stock split). This option expires December 31, 2001.
                During 1999, the employee  exercised  options to purchase 50,000
                shares of common stock.

             Store Managers

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

NOTE 10. COMMON STOCK

         Treasury Stock

             Exchange of Common Shares

                During  fiscal  1999,  the  Company  accepted  shares of Company
                common stock owned by certain  employee/officers  of the Company
                as full  payment  of  financial  obligations  that  arose as the
                result of exercising options. The employee/officers  surrendered
                46,636  shares of common  stock,  receiving  credit for the then
                market value of this stock, as satisfaction in full for payments
                owing pursuant to exercising  certain options to acquire 139,585
                shares of common stock.

             Purchase of Common Shares

                During 1999,  the Company  purchased a total of 68,700 shares of
                common stock at a total cost of  approximately  $313,000 under a
                repurchase program authorized by the Board of Directors.

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)

NOTE 10. COMMON STOCK (Continued)

             Sale of Common Shares

                The Company sold an aggregate of 68,000 Company common shares to
                certain  employee/officers (38,000 of which were pursuant to the
                exercise  of  options)  for a total of  approximately  $198,000.
                These employee/officers purchased their shares by means of notes
                which bear interest at 7%. The notes are  non-recourse,  and are
                secured  by  the  shares  owned  by the  employee/officers.  The
                majority of the notes provide for payment of interest only until
                maturity, June 2004.

         Key Employee Incentive Stock Option Plan

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

             At October 2, 1999,  options for all of the shares of common  stock
             that were reserved for issuance to the Key Employee Incentive Stock
             Option Plan had been issued.

         Common Stock Options

             In July 1999,  the  Company  granted  options to  purchase  115,900
             shares of Company  common stock to certain  employees.  The options
             vest one year from the grant  date,  have a ten-year  life,  and an
             exercise price of $4.50 per share.

             The  Company  applies  APB No. 25 and  related  interpretations  in
             accounting for its stock-based compensation plans. Accordingly,  no
             compensation  cost has been recognized for its stock options plans.
             Had compensation for the Company's  stock-based  compensation plans
             been determined  pursuant to SFAS No. 123, the Company's net income
             and earnings per share would have decreased accordingly.

             Had compensation  cost for the options been determined based on the
             fair  value  at the  grant  date  consistent  with  SFAS  123,  the
             Company's net income would have been as follows:
<TABLE>
<CAPTION>
                                                   1999            1998
                                                   ----            ----
<S>                                             <C>             <C>
           Net income:
              As Reported                       $2,368,000      $1,388,000
              Pro Forma                          2,260,000       1,388,000

           Earnings Per Share:
              Basic:
                 As Reported                         1.21             0.76
                 Pro Forma                           1.15             0.76
              Diluted:
                 As Reported                         1.15             0.69
                 Pro Forma                           1.10             0.69
</TABLE>


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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)

NOTE 10. COMMON STOCK (Continued)

         Common Stock Options (Continued)

             The  Company  used  the  Black-Scholes   option  pricing  model  to
             determine  the fair value of grants  made in 1999.  No grants  were
             made in 1998. The following assumptions were applied in determining
             the pro forma compensation cost:

           Risk Free Interest Rate                             6%
           Expected Dividend Yield                            -0-
           Expected Option Life                             5 Years
           Expected Stock Price Volatility                    75%

             Changes in outstanding incentive stock options for common stock are
             as follows:
<TABLE>
<CAPTION>
                                                                1999            1998
                                                                ----            ----
<S>                                                          <C>               <C>
           Outstanding at beginning of year                  337,980           382,780
           Options granted                                   115,900                 -
           Options exercised                                (177,585)          (45,800)
                                                             -------           -------
           Outstanding at end of year                        276,295           337,980
                                                             =======           =======
           Exercisable at end of year                        160,395           337,980
                                                             =======           =======
</TABLE>

             Weighted average option exercise price information for fiscal years
             1999 and 1998 is as follows:
<TABLE>
<CAPTION>
                                                             1999            1998
                                                             ----            ----
<S>                                                         <C>              <C>
           Outstanding at beginning of year                 $2.39            $2.31
           Granted during the year                           4.50               -
           Exercised during the year                         2.25             1.73
           Outstanding at end of year                        3.34             2.39
                                                            =====            =====

           Exercisable at end of year                       $2.50            $2.39
                                                            =====            =====
</TABLE>

             Significant  options  groups  outstanding  at  October  2, 1999 and
             related weighted average price and life information are as follows:
<TABLE>
<CAPTION>
  Grant               Options              Options              Exercise             Remaining
  Date              Outstanding          Exercisable              Price             Life (Years)
  ----              -----------          -----------              -----             ------------

<S>                 <C>                   <C>                  <C>                   <C>
12/21/95             52,000               52,000               1.63                  1
 3/14/96             36,000               36,000               2.25                  1.5
 1/08/97             72,395               72,395               3.25                  2.5
 7/3/99             115,900                    -               4.50                  9.5

</TABLE>

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)

NOTE 11. NET INCOME PER COMMON SHARE

         In 1998, the Company  adopted 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>
                                               1999                   1998
                                      ---------------------   ---------------------
                                         Basic     Diluted      Basic      Diluted
                                      ---------   ---------   ---------   ---------
<S>                                   <C>         <C>         <C>         <C>
Weighted average shares outstanding   1,957,000   1,957,000   1,830,000   1,830,000

Incremental shares - application
     Treasury stock method -
     Outstanding stock options             --       105,000        --       190,000
                                      ---------   ---------   ---------   ---------
Shares used in calculation of
     Net Income per Common Share      1,957,000   2,062,000   1,830,000   2,020,000
                                      =========   =========   =========   =========
</TABLE>

NOTE 12. RELATED PARTY TRANSACTIONS

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

         During fiscal 1999 and 1998,  respectively,  the Company incurred legal
         fees in the form of salary of  approximately  $129,000 and $105,000 for
         services provided by a member of the Board of Directors.

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

NOTE 13. BUSINESS SEGMENTS

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

         Information  concerning the revenues and operating income for the years
         ended October 2, 1999 and October 3, 1998, and identifiable  assets for
         the two  segments  in which  the  Company  operates,  are  shown in the
         following  table.  Operating  income  is  total  revenue  less  cost of
         merchandise sold and operating  expenses  relative to each segment.  In
         computing  operating  income,  none of the  following  items  have been
         included:  interest expense, other non-operating income and expense and
         income taxes.  Identifiable assets by segment are those assets that are
         used in the Company's operations in each segment.  Corporate assets are
         principally cash and notes and mortgages  receivable.  The Company does
         not have any operations  outside of the United States and  intersegment
         transactions are not material.
<TABLE>
<CAPTION>
                                                            1999            1998
                                                            ----            ----
<S>                                                     <C>              <C>
         Operating Revenues:
            Retail package stores                      $  7,255,000     $  6,901,000
            Restaurants                                  13,430,000       13,519,000
            Other revenues                                1,630,000        1,347,000
                                                        -----------      -----------
         Total operating revenues                       $22,315,000      $21,767,000
                                                        ===========      ===========
</TABLE>

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)

NOTE 13. BUSINESS SEGMENTS (Continued)
<TABLE>
<CAPTION>
                                                               1999            1998
                                                           ------------    ------------

<S>                                                        <C>             <C>
         Income From Operations Reconciled to Income
            Before Income Taxes:
               Retail package stores                       $    256,000    $    173,000
               Restaurants                                    1,607,000       1,378,000
                                                           ------------    ------------
                                                              1,863,000       1,551,000
               Corporate expenses, net of other revenues       (320,000)       (167,000)
                                                           ------------    ------------

         Operating Income                                     1,543,000       1,384,000
               Interest expense, net of interest income         (96,000)       (131,000)
               Other                                            328,000         168,000
                                                           ------------    ------------

         Income Before Income Taxes                        $  1,775,000    $  1,421,000
                                                           ============    ============
         Identifiable Assets:
            Retail package store                           $  2,108,000    $  2,006,000
            Restaurants                                       3,587,000       3,090,000
                                                           ------------    ------------
                                                              5,695,000       5,096,000
            Corporate                                         5,077,000       3,947,000
                                                           ------------    ------------

         Consolidated Totals                               $ 10,772,000    $  9,043,000
                                                           ============    ============
         Capital Expenditures:
            Retail package stores                          $     82,000    $      4,000
            Restaurants                                         794,000         672,000
                                                           ------------    ------------
                                                                876,000         676,000
            Corporate                                            58,000         132,000
                                                           ------------    ------------

         Total Capital Expenditures                        $    934,000    $    808,000
                                                           ============    ============

         Depreciation and Amortization:
            Retail package stores                          $     92,000    $     99,000
            Restaurants                                         417,000         435,000
                                                           ------------    ------------
                                                                509,000         534,000
            Corporate                                           128,000         121,000
                                                           ------------    ------------

         Total Depreciation and Amortization               $    637,000    $    655,000
                                                           ============    ============
</TABLE>

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)

NOTE 14. OTHER INCOME (EXPENSE)

         Other income (expense) in the consolidated statements of income consist
         of the  following  for the years  ended  October 2, 1999 and October 3,
         1998, respectively.

<TABLE>
<CAPTION>
                                                          1999           1998
                                                       ---------      ---------
<S>                                                    <C>            <C>
Non-franchise related rental income                    $  36,000      $  45,000
Loss on retirement of property and equipment             (66,000)       (37,000)
Settlement of litigation                                    --          110,000
Insurance recoveries                                     275,000           --
Gain on sale of liquor license                            30,000           --
Miscellaneous                                             50,000         44,000
                                                       ---------      ---------
                                                       $ 325,000      $ 162,000
                                                       =========      =========
</TABLE>

NOTE 15. SUBSEQUENT EVENT

         On September 15, 1999, the Company  entered into a contract to purchase
         an office  building  for a  purchase  price of  $850,000.  The  Company
         intends  to  utilize  the  office   building  to  house  its  corporate
         headquarters  and to operate a package  liquor  store.  On December 14,
         1999,  the Company  closed on the purchase  and paid the full  purchase
         price in cash.

                                      F-24