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

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

                   For the fiscal year ended September 27,2003

                                       OR

|_|   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) of the SECURITIES
      EXCHANGE ACT OF 1934

           For the transition period from ____________ to ____________

                          Commission File Number I-6836

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

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

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

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

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

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

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

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

The aggregate market value of the voting stock held by non-affiliates of the
registrant was $6,453,361 as of January 6, 2004.

There were 1,926,470 shares of the Registrant's Common Stock ($0.10) Par Value
outstanding as of September 27, 2003.


<PAGE>

                       DOCUMENTS INCORPORATED BY REFERENCE

Information contained in the Registrant's 2004 definitive proxy material has
been incorporated by reference in Items 10, 11, 12 and 13 of Part III of this
Annual Report on Form 10-K.

                         Exhibit Index Begins on Page 35

                                     PART I

Item 1. Business

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

General

      Flanigan's Enterprises, Inc., (the "Company") owns and/or operates
restaurants with lounges, package liquor stores and an entertainment oriented
club (collectively the "units"). At September 27, 2003, the Company operated 16
units, and had equity interests in seven additional units which have been
franchised by the Company. The table below summarizes the type and number of
units being operated during each of the last three fiscal years.

                             FISCAL    FISCAL    FISCAL
                             YEAR      YEAR      YEAR       NOTE
                             2003      2002      2001       NUMBER
TYPES OF UNITS
----------------------------------------------------------------------
Company Owned:
  Combination package
  and restaurant              4         4         4
Restaurant only               2         2         2
Package store only            4         4         3       (1)(2)(3)(4)

Company Managed
 Restaurants Only:
  Limited partnerships        4         4         4       (5)(6)(7)(8)
  Franchise                   1         1         1

Company Owned Club:           1         1         1
----------------------------------------------------------------------
TOTAL - Company
  Owned/Operated Units:      16        16        15

FRANCHISED - units            7         7         7       (9)
                             --        --

Notes:

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


                                      -1-
<PAGE>

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

      (3) During the fourth quarter of fiscal year 2001, the Company entered
into a ground lease for an out parcel in Hollywood, Florida. The Company has
constructed a building on the out parcel, one-half (1/2) of which will be used
by the Company for the operation of a package liquor store and the other
one-half (1/2) will be subleased by the Company as retail space. The package
store opened for business on November 17, 2003. This unit is not included in the
table of units.

      (4) During the second quarter of fiscal year 2001, the Company completed
renovations to its new corporate offices and relocated to the same. The new
corporate offices consist of a two (2) story building, with space set aside on
the ground floor for a package liquor store. The Company filed the application
for its building permits during the third quarter of fiscal year 2002, but is
still involved in litigation with the adjacent shopping center over the
Company's right to non-exclusive parking in the shopping center. The
construction of the package liquor store has been postponed until the litigation
is concluded, which should occur during fiscal year 2004. The package liquor
store is not included in the table of units.

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

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

      (7) During the fourth quarter of fiscal year 2001, a limited partnership
was formed with the Company as general partner, which limited partnership
entered into a sublease agreement to own and operate an existing restaurant in
Weston, Florida. During the fourth quarter of fiscal year 2002, the sublessor
resolved the zoning and related matters and the limited partnership began
raising funds to renovate the business premises for operation as a "Flanigan's
Seafood Bar and Grill" restaurant. The Company continues to act as the general
partner and has a 28 percent ownership interest in the limited partnership. The
restaurant, which had operated under its existing servicemark, was closed on
July 13, 2002 and building permits were issued to the limited partnership at the
start of fiscal year 2003. The restaurant opened for business on January 20,
2003.

      (8) During the third quarter of fiscal year 2003, a limited partnership
was formed with the Company as general partner, which limited partnership
entered into a lease agreement to own and operate a restaurant in a Howard
Johnson's Hotel in Stuart, Florida. During the fourth quarter of fiscal year
2003, the limited partnership raised funds through a private offering to
renovate the business premises for operation as a "Flanigan's Seafood Bar and
Grill" restaurant. The Company continues to act as general partner and owns a
twelve percent limited partnership interest. It is anticipated that the
renovated restaurant will be open for business during


                                      -2-
<PAGE>

the second quarter of fiscal year 2004 and is not included in the table of
units.

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

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

      The Company was incorporated in Florida in 1959 and operated in South
Florida as a chain of small cocktail lounges and package liquor stores. By 1970,
the Company had established a chain of "Big Daddy's" lounges and package liquor
stores between Vero Beach and Homestead, Florida. From 1970 to 1979, the Company
expanded its package liquor store and lounge operations throughout Florida and
opened clubs in five other "Sun Belt" states. In 1975, the Company discontinued
most of its package store operations in Florida except in the South Florida
areas of Dade, Broward, Palm Beach and Monroe Counties. In 1982 the Company
expanded its club operations into the Philadelphia, Pennsylvania area as general
partner of several limited partnerships organized by the Company. In March 1985
the Company began franchising its package liquor stores and lounges in the South
Florida area. See Note 9 to the consolidated financial statements and the
discussion of franchised units on page 5.

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

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

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

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

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

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

      The income derived and expenses incurred by the Company relating to the
aforementioned joint ventures and subsidiaries are consolidated for


                                      -3-
<PAGE>

accounting purposes with the income and expenses of the Company in the
consolidated financial statements in this Form 10-K.

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

Corporate Reorganization

      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 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. In addition, the Company also sought its release from lease
agreements for businesses sold, which sales included the assignment of the lease
for the business premises. 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. The effective date of the Amended Plan of
Reorganization was June 30, 1987 and the Bankruptcy Court ratified the initial
disbursements made by the Disbursing Agent by its Order dated December 21, 1987
and entered its Order of Discharge of the Company on December 28, 1987.

      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, which modifications provided
the Company with needed capital. During the third quarter of fiscal year 2002,
the remaining liabilities under the Amended Plan of Reorganization were paid in
full.

Financial Information Concerning Industry Segments

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

      Financial information broken into these two principal industry segments
for the three fiscal years ended September 27, 2003, September 28, 2002 and
September 29, 2001 is set forth in the consolidated financial statements which
are attached hereto, and 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.


                                      -4-
<PAGE>

      The Company's restaurants offer full food and alcoholic beverage service
with approximately 77% of their sales being food items. These restaurants are
operated under the "Flanigan's Seafood Bar and Grill" servicemark. Although
these restaurants provide a neighborhood atmosphere, they have the degree of
standardization prevalent in casual dining restaurant chains, including menu.
The interior decor is nautical with numerous fishing and boating pictures and
decorations. Drink prices may vary between locations to meet local conditions.
Food prices are standardized. The restaurants' hours of operation are from 11:00
a.m. to 1:00-5:00 a.m. The Company continues to develop strong customer
recognition of its "Flanigan's Seafood Bar and Grill" servicemark through very
competitive pricing and efficient and friendly service. The Company's package
liquor stores and restaurants were designed to permit minor modifications
without significant capital expenditures. However, from time to time the Company
is required to redesign and refurbish its units at significant cost. See Item 2,
Properties and Item 7 for further discussion.

Franchised Package Liquor Stores and Restaurants

      In March 1985, the Company's Board of Directors approved a plan to sell,
on a franchise basis, up to 26 of the Company's package liquor stores and
lounges in the South Florida area. The Company had limited response to its
franchise offering and suspended its franchise plan at the end of fiscal year
1986. Many of the units that were originally offered as franchises have been
sold outright and are no longer operated as Flanigan's or Big Daddy's stores. As
of the end of fiscal year 2003, seven units were franchised, of which five units
were franchised to members of the family of the Chairman of the Board and
Officers and Directors of the Company.

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

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

Investment in Joint Ventures

      Beginning with the limited partnership which owns the restaurant in
Kendall, Florida and for all limited partnerships formed subsequent thereto for
the purpose of owning and operating a restaurant under the "Flanigan's Seafood
Bar and Grill" servicemark, a standard financial arrangement has been used in
each limited partnership agreement. Under this financial arrangement, until the
limited partnership has received an aggregate sum equal to the initial
investment of all limited partners from the net profit from the operation of the
restaurant, the limited partnership receives an aggregate sum equal to 25% of
the initial investment of all limited partners first each year, with any
additional net profit divided equally between the Company, as manager of the
restaurant, and the limited partnership. Once the


                                      -5-
<PAGE>

limited partnership has received an aggregate sum equal to the initial
investment of all limited partners from the net profit from the operation of the
restaurant, the net profit is divided equally between the Company, as manager of
the restaurant, and the limited partnership. As of September 27, 2003, only the
limited partnership which owns the restaurant in Kendall, Florida has received
an aggregate sum equal to the initial investment of all limited partners from
the net profit from the operation of the restaurant and the Company receives
one-half (1/2) of the net profit as manager of the restaurant. The Company plans
to continue forming limited partnerships to raise funds to own and operate
restaurants under the "Flanigan's Seafood Bar and Grill" servicemark using the
same financial arrangement.

      The Company operated a restaurant in Miami, Florida under the "Flanigan's
Seafood Bar and Grill" servicemark pursuant to a limited partnership agreement
through the end of the second quarter of fiscal year 2002. The Company acts as
the general partner and owned a fifty percent limited partnership interest. The
State of Florida, Department of Transportation, ("DOT"), exercised its right of
eminent domain to "take" the hotel property upon which this restaurant was
located. During fiscal year 2002, the Company, as general partner of the limited
partnership, settled its apportionment claim against the hotel owner for
$700,000, which settlement resulted in a gain from disposition of approximately
$459,000 to the Company during the fiscal year ended September 28, 2002, which
is included in "Other Income (Expense) on Page F-3 of this report. During fiscal
year 2003, the limited partnership settled all claims for additional
compensation from the DOT for $27,000 and is still pursuing a claim for $10,000
as reimbursement of expenses incurred by the limited partnership during the
eminent domain proceedings. The additional compensation from the DOT belongs
solely to the Company, as will the anticipated reimbursement of expenses. The
unrelated joint venture partner received $350,000 in full settlement of its
interest and the Company controls 100% of the partnership as of September 27,
2003.

      During the third quarter of fiscal year 2003, the Company, as general
partner of the limited partnership, entered into a Sale of Business Agreement
for the purchase of an existing restaurant in Pinecrest, Florida, which
transaction closed during the first quarter of fiscal year 2004. The Company
agreed to unconditionally guaranty the lease for the business premises in order
to procure the _consent of the landlord to the assignment of the lease. During
the second quarter of fiscal year 2004, the limited partnership intends to raise
funds through a private offering to renovate the business premises for operation
as a "Flanigan's Seafood Bar & Grill" restaurant. The Company continues to act
as general partner and will also be the owner of up to a thirty three and
one-third percent limited partnership interest. The limited partnership
agreement gives the partnership the right to use the "Flanigan's Seafood Bar and
Grill" servicemark for a fee equal to 3% of the gross sales from the operation
of the restaurant, while the Company acts as general partner only. It is
anticipated that the renovated restaurant will be open for business during the
fourth quarter of the fiscal year 2004.

      A related third party acts as general partner of a limited partnership
which owns and operates a franchised restaurant in Fort Lauderdale, Florida
under the "Flanigan's Seafood Bar and Grill" servicemark. The Company is a
twenty five percent owner of the limited partnership as are other related
parties, including, but not limited to officers and directors of the Company and
their families. This joint venture is not consolidated on the accompanying
consolidated financial statements of the Company.

      The Company acts as general partner of a limited partnership which owns
and operates a restaurant in Surfside, Florida under the "Flanigan's Seafood Bar
and Grill" servicemark. The Company is also a forty two percent owner of the
limited partnership as are other related parties, including, but not limited to
officers and directors of the Company and their families. The


                                      -6-
<PAGE>

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

      The Company acts as general partner of a limited partnership which owns
and operates a restaurant in Kendall, Florida under the "Flanigan's Seafood Bar
and Grill" servicemark. The Company is also a forty percent owner of the limited
partnership as are other related parties, including, but not limited to officers
and directors of the Company and their families. The limited partnership
agreement gives the limited partnership the right to use the "Flanigan's Seafood
Bar and Grill" servicemark for a fee equal to 3% of the gross sales from the
operation of the restaurant, while the Company acts as general partner only.
This restaurant opened for business on April 9, 2000.

      The Company acts as general partner of a limited partnership which owns
and operates a restaurant in West Miami, Florida under the "Flanigan's Seafood
Bar and Grill" servicemark. The Company is also a twenty five percent owner of
the limited partnership as are other related parties, including, but not limited
to officers and directors of the Company and their families. The limited
partnership agreement gives the limited partnership the right to use the
"Flanigan's Seafood Bar and Grill" servicemark for a fee equal to 3% of the
gross sales from the operation of the restaurant, while the Company acts as
general partner only. This restaurant opened for business on October 11, 2001.

      During the fourth quarter of fiscal year 2002, the Company, as general
partner of a limited partnership, began raising funds to renovate the business
premises of an existing restaurant in Weston, Florida for operation as a
"Flanigan's Seafood Bar and Grill" restaurant. The Company is also the owner of
twenty eight percent of the limited partnership, as are other related parties,
including but not limited to officers and directors of the Company and their
families. The limited partnership agreement gives the partnership the right to
use the "Flanigan's Seafood Bar and Grill" servicemark for a fee equal to 3% of
the gross sales from the operation of the restaurant, while the Company acts as
general partner only. The restaurant, which had operated under its existing
servicemark, was closed on July 13, 2002 and building permits were issued to the
limited partnership at the start of fiscal year 2003. The restaurant opened for
business on January 20, 2003.

      During the third quarter of fiscal year 2003, a limited partnership was
formed with the Company as general partner, which limited partnership entered
into a lease agreement to own and operate a restaurant in a Howard Johnson's
Hotel in Stuart, Florida. During the fourth quarter of fiscal year 2003, the
limited partnership began raising funds through a private offering to renovate
the business premises for operation as a "Flanigan's Seafood Bar and Grill"
restaurant. As of the end of fiscal year 2003, the Company had advanced the sum
of $501,000 to the limited partnership to commence renovations to the business
premises, which advance represented one third of the funds to be raised through
the private offering to renovate and prepare the restaurant to open for
business, including working capital. Subsequent to the end of fiscal year 2003,
the limited partnership completed its private offering, raising the sum of
$1,500,000. The Company continues to act as general partner and is also the
owner of a twelve percent limited partnership interest, as are other related
parties, including but not limited to officers and directors of the Company and
their families. The limited partnership agreement gives the partnership the
right to use the "Flanigan's Seafood Bar and Grill" service mark for a fee equal
to 3% of the gross sales from the operation of the restaurant, while the Company
acts as general partner only. The renovated restaurant opened for business on
January 11, 2004.


                                      -7-
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Clubs

      As of the end of fiscal year 2003, the Company owned one club in Atlanta,
Georgia, which was operated by an unaffiliated third party, as discussed below.

Operation of Unit by Unaffiliated Third Party

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

Operations and Management

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

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


                                      -8-
<PAGE>

Purchasing and Inventory

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

      All Company purchases of liquor inventory are made through its purchasing
department from the Company's corporate headquarters. The major portion of
inventory is purchased under individual purchase orders with licensed
wholesalers and distributors who deliver the merchandise within one or two days
of the placing of an order. Frequently there is only one wholesaler in the
immediate marketing area with an exclusive distributorship of certain liquor
product lines. Substantially all of the Company's liquor inventory is shipped by
the wholesalers or distributors directly to the Company's units. The Company
significantly increases its inventory prior to Christmas, New Year's eve and
other holidays. Pursuant to Florida law, the Company pays for its liquor
purchases within ten days of delivery.

      In September 2002, the Company changed the accounting method for valuing
inventories from first in first out to average cost.

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

Government Regulation

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

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

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


                                      -9-
<PAGE>

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

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

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

      The Company is subject in certain states to "dram shop" or "liquor
liability" statutes, which generally provide a person injured by an intoxicated
person the right to recover damages from an establishment that wrongfully served
alcoholic beverages to such person. See Item 1, Insurance and Item 3, Legal
Proceedings for further discussion. The Company maintains a continuous program
of training and surveillance from its corporate headquarters to assure
compliance with all applicable liquor laws and regulations. During the fiscal
years ended September 29, 2001, September 28, 2002 and September 27, 2003 and
through the present time, no significant pending matters have been initiated by
the Department of Alcohol, Beverages and Tobacco concerning any of the Company's
licenses which might be expected to result in a revocation of a liquor license
or other significant actions against the Company.

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

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

Insurance

      The Company has general liability insurance which incorporates a
semi-self-insured plan under which the Company assumes the full risk of the
first $50,000 of exposure per occurrence. The Company's insurance carrier is
responsible for $1,000,000 coverage per occurrence above the Company's
self-insured deductible, up to a maximum aggregate of $2,000,000 per year.
During fiscal year 2001, fiscal year 2002, and again in fiscal year 2003 the
Company was able to purchase excess liability insurance at a reasonable premium,
whereby the Company's excess insurance carrier is responsible for $5,000,000
coverage above the Company's primary general liability insurance coverage. The
Company is self-insured against liability claims in excess of $6,000,000.


                                      -10-
<PAGE>

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

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

Competition and the Company's Market

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

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

      As previously noted, at September 27, 2003 the Company owned and operated
six restaurants, all of which had formerly been lounges and were renovated to
provide full food service, operated one restaurant for a franchisee and operated
an additional four restaurants as general partner of limited partnerships. These
restaurants compete directly with other restaurants serving liquor in the area.
The Company's restaurants are competitive due to four factors; product quality,
portion size, moderate pricing and a standardization throughout the Company
owned and operated restaurants and most of the franchises.

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

Trade Names

      The Company operates principally under three servicemarks; "Flanigan's",
"Big Daddy's", and "Flanigan's Seafood Bar and Grill". Throughout Florida the
Company's package liquor stores are operated under the "Big Daddy's Liquors"
servicemark. The Company's rights to the use of the "Big Daddy's" servicemark
are set forth under a consent decree of a Federal Court entered into by the
Company in settlement of federal trademark litigation. The consent decree and
the settlement agreement allow the Company to continue, and expand, its use of
the "Big Daddy's" servicemark in connection with limited food and liquor sales
in Florida. The consent decree further contained a restriction upon all future
sales of distilled spirits in


                                      -11-
<PAGE>

Florida under the "Big Daddy's" name by the other party who has a federally
registered servicemark for "Big Daddy's" use in the restaurant business. The
Federal Court retained jurisdiction to enforce the consent decree. The Company
has acquired a registered Federal trademark on the principal register for its
"Flanigan's" servicemark.

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

Employees

      As of year end, the Company employed 651 employees, of which 472 were
full-time and 179 were part-time. Of these, 28 were employed at the corporate
offices. Of the remaining employees, 43 were employed in package liquor stores
and 580 in restaurants.

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

                      EXECUTIVE OFFICERS OF THE REGISTRANT

                         Positions and Offices                Office or Position
       Name                 Currently Held            Age         Held Since
       ----              ---------------------        ---     ------------------
Joseph G. Flanigan       Chairman of the Board        74             1959
                         of Directors, Chief
                         Executive Officer

James G. Flanigan        President                    39             2002

August Bucci             Chief Operating Officer      59             2002
                         and Executive Vice
                         President

William Patton           Vice President               80             1975
                         Community Relations

Edward A. Doxey          Chief Financial Officer      62             1992
                         and Secretary

Jeffrey D. Kastner       Assistant Secretary          50             1995

Jean Picard              Vice President of            65             2002
                         Package Store
                         Operations


Item 2. Properties

      The Company's operations are all conducted on leased property with the
exception of the Corporate Headquarters Office Building which was


                                      -12-
<PAGE>

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

      All of the Company's units require periodic refurbishing in order to
remain competitive. The Company has budgeted $350,000 for its refurbishing
program for fiscal year 2004. See Item 7, "Liquidity and Capital Resources" for
discussion of the amounts spent in fiscal year 2003.

      The following table summarizes the Company's properties as of September
27, 2003 including franchise locations, a club and Company managed locations.

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

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

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

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

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

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

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


                                      -13-
<PAGE>

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

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

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

Flanigan's Seafood                    4,300          100         Franchise       2/15/72 to12/31/05
Bar and Grill #18                                                                 Options to 12/31/20
Twenty Seven Birds                                                                Option to purchase
Corp. (2)(3)(5)
2721 Bird Avenue
Miami, FL

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

Flanigan's Seafood                    5,100          140         Company         7/15/68 to 12/31/04
Bar and Grill #20                                                                  Annual options
Flanigan's Enterprises                                                             until the Company
Inc.  (2)                                                                          fails to exercise
13205 Biscayne Blvd.                                                               Additional Lease
North Miami, FL                                                                    5/1/69 to 12/31/04
                                                                                   Annual options
                                                                                   until the Company
                                                                                   fails to exercise


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

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

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


                                      -14-
<PAGE>

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

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

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

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

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

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

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


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

Flanigan's Seafood                     7,000         200         Joint           10/1/03 to 9/30/06
Bar and Grill #75 (11)                                           Venture          Options to 9/30/27
CIC Investors # 75 Ltd.
950 S. Federal Highway
Stuart, FL 34994

Flanigan's Seafood                    5,000          165         Joint           4/15/01 to 12/14/05
Bar and Grill #80                                                Venture          Options to 12/14/20
CIC Investors #80 Ltd.
8695 N.W. 12th St
Miami, FL
</TABLE>


                                      -15-
<PAGE>

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

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

Flanigan's Enterprises               10,000          400         Company         5/1/76 to 4/30/06
#600 (7)
Powers Ferry Landing
Atlanta, GA
</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)   During fiscal year 1996, the Company purchased 37% of the underlying
      leasehold from the unaffiliated third parties to whom the lease had been
      assigned and subleased back. An additional 11% was purchased during fiscal
      year 1997, bringing the total interest purchased to 48%.

(7)   Location managed by an unaffiliated third party.

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

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

(10)  Ground lease executed by the Company on September 25, 2001. The Company
      constructed a building of approximately 4200 square feet, one half (1/2)
      to be used by the Company for the operation of a package liquor store and
      the other one half (1/2) to be subleased as retail space. The package
      liquor store opened for business on November 17,2003.

(11)  Location scheduled to open for business on January 11, 2004.

Item 3. Legal Proceedings.

      Due to the nature of the business, the Company is sued from time to time
by patrons, usually for alleged personal injuries occurring at the Company's
business locations. The Company has liability insurance which incorporates a
semi-self-insured plan under which the Company assumes the full risk of the
first $50,000 of exposure per occurrence. The Company's primary general
liability insurance carrier is responsible for $1,000,000 coverage per
occurrence above the Company's self-insured deductible, up to a maximum
aggregate of $2,000,000 per year. During the fiscal year 2001, fiscal year 2002,
and again in fiscal year 2003, the Company was able to purchase excess liability
insurance, at a reasonable premium, whereby the Company's excess insurance
carrier is responsible for $5,000,000 coverage above the Company's primary
general liability insurance coverage. Certain states have


                                      -16-
<PAGE>

liquor liability (dram shop) laws which allow a person injured by an "obviously
intoxicated person" to bring a civil suit against the business (or social host)
who had served intoxicating liquors to an already "obviously intoxicated
person". Dram shop claims normally involve traffic accidents and the Company
generally does not learn of dram shop claims until after a claim is filed and
then the Company vigorously defends these claims on the grounds that its
employee did not serve an "obviously intoxicated person". Damages in most dram
shop cases are substantial. At the present time, there are no dram shop cases
pending against the Company. The Company has in place insurance coverage to
protect it from losses, if any.

      During fiscal year 2000, the Company was served with several complaints
alleging violations of the Americans with Disabilities Act, ("ADA"), at all of
its locations. The lawsuits included the restaurants owned by the limited
partnerships and franchises. The ADA has no notice provision and the first time
that the Company received notice of any ADA violations was when it was served
with a copy of the complaint. Of the law suits filed, only a few have been
actively pursued. The Company retained an ADA expert who has inspected locations
involved in active lawsuits, including the limited partnerships and franchises,
and provided a report setting forth ADA violations which need to be corrected.
The Company agreed to correct ADA violations noted by its ADA expert and then
vigorously defended the lawsuits arguing that the locations were in compliance.
During fiscal year 2001 and fiscal year 2002, the Company, including three (3)
of its franchises, settled all active law suits alleging ADA violations.

      During fiscal year 2003, the Company was served with a complaint alleging
violations of the ADA at one of its locations. The Company corrected all
violations noted in the complaint and is arguing that the location is in
compliance.

      During fiscal year 2003, the Company, as general partner of one of its
limited partnerships, and one of its franchisees, received notifications
alleging their failure to complete correcting ADA violations pursuant to their
respective settlement agreements from previous lawsuits alleging ADA violations.
The Company, as general partner of the limited partnership, and the franchisee
corrected any uncorrected ADA violations and are arguing that the locations are
in compliance with their respective settlement agreements.

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

      During the fourth quarter of fiscal year 2003 the Company did not submit
any matter to a vote of the security holders.

                                     PART II

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


                                      -17-
<PAGE>

                    Fiscal 2003     Fiscal 2002    Fiscal 2001
                    -----------     -----------    -----------
                    High    Low     High    Low    High    Low
                    ----    ---     ----    ---    ----    ---

First quarter       6.10    4.90    6.20    4.25    4.38   3.75
Second quarter      6.10    5.50    6.21    5.65    4.65   3.75
Third quarter       6.37    5.99    7.20    6.00    5.00   4.06
Fourth quarter      6.60    6.00    6.85    5.40    6.45   4.35

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

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

      On April 30, 2002, the Company purchased 36,000 shares of the Company's
common stock from the Company's Chief Executive Officer at $6.60 per share which
was the fair market price as of that date.

      On December 19, 2002, the Company declared a cash dividend of 27 cents per
share payable on January 30, 2003 to shareholders of record on January 17, 2003.

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

Item 6. Selected Financial Data.

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
                           1999            2000          2001          2002          2003
--------------------------------------------------------------------------------------------
                                             Statement of Operations Data
--------------------------------------------------------------------------------------------
<S>                     <C>            <C>           <C>           <C>           <C>
Revenue                 $29,523,000    $32,640,000   $36,038,000   $39,124,000   $40,253,000
--------------------------------------------------------------------------------------------

Income from Operations

                        $ 1,835,000    $ 2,216,000   $ 2,583,000   $ 2,788,000   $ 2,024,000
--------------------------------------------------------------------------------------------
Net income              $ 2,368,000    $ 1,364,000   $ 1,529,000   $ 1,383,000   $   888,000
--------------------------------------------------------------------------------------------
Earnings per share      $      1.21    $      0.73   $      0.80   $      0.71   $      0.46
--------------------------------------------------------------------------------------------
</TABLE>


                                      -18-
<PAGE>

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
                                                 Balance Sheet Data
--------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------
<S>                     <C>            <C>           <C>           <C>           <C>
Total assets            $14,168,000    $15,477,000   $16,728,000   $17,367,000   $18,733,000
--------------------------------------------------------------------------------------------
Long term liabilities
                        $ 1,528,000    $ 1,672,000   $ 2,010,000   $ 1,593,000   $ 1,314,000
--------------------------------------------------------------------------------------------
Net working capital
                        $ 1,429,000    $ 1,373,000   $ 2,436,000   $ 2,980,000   $ 2,093,000
--------------------------------------------------------------------------------------------
Stockholders' equity
                        $ 6,980,000    $ 7,667,000   $ 8,968,000   $ 9,957,000   $10,351,000
--------------------------------------------------------------------------------------------
Dividends declared
                        $  186,000     $   215,000   $   231,000   $   499,000   $   520,000
--------------------------------------------------------------------------------------------
</TABLE>

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

      As of September 27, 2003, the Company was operating sixteen units. The
Company had interests in an additional seven units which had been franchised by
the Company, which interests include the franchised restaurant managed by the
Company. Of the units operated by the Company, four were combination package
liquor store and restaurant, seven were restaurants only and four were package
liquor stores only. There was one club operated by an unaffiliated third party
under a management agreement. During fiscal year 2001, one package liquor store
only was closed with the expiration of its lease and the liquor license was sold
during the first quarter of fiscal year 2002 to an unaffiliated third party.
During fiscal year 2001, one restaurant only was acquired by a limited
partnership of which the Company acts as general partner. The restaurant, which
was being operated by the Company under the restaurant's servicemark, was closed
during the fourth quarter of fiscal year 2002, renovated for operation under the
"Flanigan's Seafood Bar and Grill" servicemark and re-opened for business during
the second quarter of fiscal year 2003. During fiscal year 2001, the Company
also entered into a ground lease and constructed a building for the operation of
a package liquor store only from one half (1/2) of the building and to sublease
retail space from the other one half (1/2). At the start of fiscal year 2001,
one restaurant only, owned by a limited partnership of which the Company acts as
general partner, was opened for business.

Liquidity and Capital Resources

Cash Flows

      The following table is a summary of the Company's cash flows for the
fiscal years ended September 27, 2003, September 28, 2002 and September 29,
2001:

--------------------------------------------------------------------------------
                                            Fiscal Years Ended
--------------------------------------------------------------------------------
                                           2003            2002           2001
--------------------------------------------------------------------------------
                                              (in thousands)
--------------------------------------------------------------------------------
Net cash provided by
operating activities                      $4,418          $2,495         $2,476
--------------------------------------------------------------------------------
Net cash used in
investing activities                      (3,108)         (2,009)        (1,665)
--------------------------------------------------------------------------------


                                      -19-
<PAGE>

--------------------------------------------------------------------------------
                                            Fiscal Years Ended
--------------------------------------------------------------------------------
                                           2003             2002           2001
--------------------------------------------------------------------------------
                                              (in thousands)
--------------------------------------------------------------------------------
Net cash used in
financing activities                        (866)           (892)          (168)
--------------------------------------------------------------------------------
Net increase (decrease)
in cash and equivalents                      444            (406)           643
--------------------------------------------------------------------------------
Cash and equivalents
beginning of year                          1,143           1,549            906
--------------------------------------------------------------------------------
Cash and equivalents
end of year                              $ 1,587         $ 1,143        $ 1,549
--------------------------------------------------------------------------------

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

Contractual Cash Obligations

<TABLE>
<CAPTION>
                                                            Less Than        1-5          After
                                                Total         1 Year        Years        5 Years
                                                -----         ------        -----        -------
<S>                                          <C>           <C>           <C>           <C>
Employment contract                          $   150,000   $   150,000
Long-term debt                                 1,592,000       278,000   $   363,000   $   951,000
Operating leases                              11,170,000     1,647,000     4,389,000     5,134,000

Subtotal                                      12,912,000     2,075,000     4,752,000     6,085,000
Operating Lease guarantees for Franchisees     3,290,000       698,000     2,071,000       521,000
                                             -----------   -----------   -----------   -----------
                                             $16,202,000   $ 2,773,000   $ 6,823,000   $ 6,606,000
                                             ===========   ===========   ===========   ===========
</TABLE>

Improvements

      Capital expenditures were $3,028,000,$1,216,000 and $2,560,000 during
fiscal years 2003, 2002 and 2001, respectively. The capital expenditures for
each fiscal year included upgrading existing units serving food, improvements to
package liquor stores and the replacement of the corporate computer system. The
capital expenditures for fiscal year 2003 included renovations to their
respective business premises by the joint


                                      -20-
<PAGE>

ventures in Weston, Florida, ($820,000), and Stuart, Florida, ($284,000), and
the construction of the building in Hollywood, Florida for the operation of a
package liquor store, ($515,000).

      All of the Company's units require periodic refurbishing in order to
remain competitive . During fiscal 1992, as cash flow improved, the Company
embarked on a refurbishing program which continues. The budget for fiscal year
2004 includes approximately $ 350,000 for this purpose. The Company expects the
funds for these improvements to be provided from operations. In addition it is
anticipated that two new joint ventures will require approximately $4,000,000 in
capital expenditures during fiscal year 2004, the majority of which will be
raised through private offerings.

Long Term Debt

      During the fourth quarter of fiscal year 2002, the Company closed on an
unsecured $456,000 loan from BankAtlantic, which loan was used to prepay the
principal balance due on a $1,000,000 loan from Bank of America, (formerly
NationsBank), which loan originated during the second quarter of fiscal year
2000. The promissory note earns interest at prime rate, (4.0% at September 27,
2003), per annum and is fully amortized over 19 months, with equal monthly
payments of principal and interest. The principal balance due as of September
27, 2003 was $190,209.

      During the fourth quarter of fiscal year 2001, the Company borrowed the
sum of $895,000 from Bank of America (formerly Nations Bank). The promissory
note earns interest at the rate of 8.62% per annum, amortized over 20 years with
principal and interest payable monthly, with the entire unpaid principal balance
and all accrued interest due on August 1, 2008. The promissory note is secured
by a mortgage on the office building purchased by the Company for its corporate
offices, which office building was released from the lien granted by the Company
to Bank of America (formerly Nations Bank), as collateral for the $1,000,000
loan in the second quarter of fiscal year 2000. In order to achieve the fixed
interest rate, the Company entered into an ISDA Master Agreement with Bank of
America, ("SWAP Agreement"), and in the event the Company elects to prepay the
promissory note, there may be a prepayment penalty associated therewith. The
outstanding balance as of the end of fiscal year 2003 was $ 856,578.

      During the fourth quarter of fiscal year 1997, the Company, as general
partner of a limited partnership, purchased the assets of an existing restaurant
in Surfside, Florida for renovation and operation as a "Flanigan's Seafood Bar
and Grill" restaurant. The purchase price was seller financed, secured by a
chattel mortgage upon the assets of the limited partnership, bearing interest at
the rate of 8% per annum and being fully amortized over 10 years with equal
monthly installments of principal and interest, each in the amount of $6,066.40.
The principal balance due as of September 27, 2003 was $243,000.

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

      During the third quarter of fiscal year 1997, the Company purchased
unimproved real property adjacent to one of its units to ensure adequate parking
for the restaurant. The purchase price was seller financed, secured by a
mortgage upon the real property purchased, bearing interest at the rate of 8%
per annum and being payable in equal monthly installments of principal and
interest, each in the amount of $3,042.55, until April 24, 2007, when the


                                      -21-
<PAGE>

entire principal balance and all accrued interest is due in full. The principal
balance due as of September 27, 2003 was $302,000.

      The Company repaid long term debt, including the Bank of America note
payable, the Bank Atlantic note payable, mortgages, capital lease obligations
and Chapter 11 bankruptcy damages in the amount of $ 346,000, $498,000 and
$835,000 in fiscal years 2003, 2002 and 2001 respectively.

Working capital

      The table below summarizes the current assets, current liabilities and
working capital for the fiscal years 2003, 2002 and 2001:

                                       Sept. 27        Sept. 28        Sept.29
                                         2003            2002            2001

Current assets                        $4,958,000      $5,354,000      $4,745,000

Current liabilities                    2,865,000       2,374,000       2,309,000

Working capital                        2,093,000       2,980,000       2,436,000

      Working capital for the fiscal year ended September 27, 2003 decreased by
29.8% and 14.1% from the working capital for the fiscal years ended September
28, 2002 and September 27, 2001, respectively. The decrease in working capital
is attributed to capital improvements made by the limited partnership owning the
restaurant in Stuart, Florida, and the construction of the building in
Hollywood, Florida from which the Company operates a package liquor store.
Subsequent to the end of fiscal year 2003 and the completion of the private
offering by the limited partnership owning the restaurant in Stuart, Florida,
the Company was reimbursed for advances made in excess of its investment
($376,000), thereby improving working capital. The Company currently has no
plans to construct another building for the purpose of operating a package
liquor store.

      Management believes that positive cash flow from operations will
adequately fund operations, debt reductions and planned capital expenditures in
fiscal year 2004. However, it is also anticipated that during fiscal year 2004,
working capital will be adversely effected by the annual dividend, provided the
dividend is approved by the Board of Directors, and investments and/or advances
made by the Company to limited partnerships pending reimbursement of advances
made by the Company in excess of its investment once the private offering by the
limited partnership is completed.

Income Taxes

      Financial Accounting Standards Board Statement No. 109, Accounting for
Income Taxes requires, among other things, recognition of future tax benefits
measured at enacted rates attributable to deductible temporary differences
between financial statement and income tax bases of assets and liabilities and
to tax net operating loss and tip credit carryforwards to the extent that
realization of said benefits is more likely than not. For discussion regarding
the Company's carryforwards refer to Note 7 to the consolidated financial
statements for fiscal year ended September 27, 2003.


                                      -22-
<PAGE>

Critical Accounting Policies

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

Depreciation

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

In fiscal 2003, management reviewed the estimated useful lives for leasehold
improvements and recorded an adjustment which was not significant.

Deferred Tax Assets

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

Consolidation

The Company operates 4 restaurants as general partner for the limited
partnership that owns the operations of these restaurants. The Company refers to
these entities as joint ventures or limited partnerships. Additionally, the
Company expects that any expansion which takes place in opening new restaurants
will also result in the Company operating the restaurants as general partner. In
addition to the general partnership interest the Company also purchases limited
partnership units ranging from 12% to 42% of the total units outstanding. As a
result of these controlling interests, the Company consolidates the operations
of these limited partnerships with those of the Company despite the fact the
Company does not own in excess of 50% of the equity interests. All intercompany
transactions are eliminated in consolidation. The minority interests in the
earnings of these joint ventures are removed from net income and are not
included in the calculation of earnings per share.


                                      -23-
<PAGE>

Results of Operations

REVENUES (in thousands):
--------------------------------------------------------------------------------
                        Fifty Two           Fifty Two               Fifty Two
                       Weeks Ended         Weeks Ended             Weeks Ended
                      Sept.27, 2003       Sept. 28, 2002         Sept. 29, 2001
Sales
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Restaurant, food      $22,489  57.7%      $22,086   58.4%       $19,976    57.6%
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Restaurant, bar         6,705  17.2%        6,533   17.3%         5,806    16.7%
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Package goods           9,777  25.1%        9,174   24.3%         8,907    25.7%
--------------------------------------------------------------------------------

Total                  38,971   100%       37,793  100.0%        34,689   100.0%
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Franchise revenues        904                 985                   977
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Owners fee                260                 251                   269
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Other operating
  income                  118                  95                   103
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Total Revenues        $40,253             $39,124               $36,038
--------------------------------------------------------------------------------

      As the table above illustrates, total revenues have increased when
compared to fiscal years ended September 28, 2002 and September 29, 2001. During
fiscal year 2004, total revenues are expected to continue increasing primarily
due to the restaurant in Weston, Florida being open for the entire year, the
opening of the new restaurant in Stuart, Florida and the opening of a new
package liquor store in Hollywood, Florida.

      Restaurant food sales represented 57.7% of total sales for the fiscal year
ended September 27, 2003 as compared to 58.4% and 57.6% of total sales in the
fiscal years ended September 28, 2002 and September 29, 2001 respectively. The
weekly average of same store restaurant food sales was $273,000 for the fiscal
year ended September 27, 2003 as compared to $264,000 and $255,000 for the
fiscal years ended September 28, 2002 and September 29, 2001, respectively, an
increase of 3.4% and 7.1% from the fiscal years ended September 28, 2002 and
September 29, 2001, respectively. The weekly average of restaurant food sales
increased for the fiscal year ending September 27, 2003 as compared to the
fiscal years ending September 28, 2002 and September 29, 2001, while the
percentage of restaurant food sales to total sales decreased due to increased
package store sales. During fiscal year 2004,


                                      -24-
<PAGE>

restaurant food sales are expected to increase primarily due to the restaurant
in Weston, Florida being open for the entire year and the opening of the new
restaurant in Stuart, Florida and the continued increase in the weekly average
of same store restaurant food sales.

      Restaurant bar sales represented 17.2% of total sales for the fiscal year
ended September 27, 2003 as compared to 17.3% and 16.7% of total sales in the
fiscal years ended September 28, 2002 and September 29, 2001, respectively. The
weekly average of same store restaurant bar sales was $73,000 for the fiscal
year ended September 27, 2003 as compared to $74,000 and $75,000 for the fiscal
years ended September 28, 2002 and September 29, 2001 respectively, a decrease
of 1.4% from fiscal year 2002 and 2.7% from fiscal year 2001. During fiscal year
2004, restaurant bar sales are expected to increase primarily due to the
restaurant in Weston, Florida being open for the entire year and the opening of
the new restaurant in Stuart, Florida, although the weekly average of same store
restaurant bar sales is expected to remain constant.

      Package store sales represented 25.1% of total sales for the fiscal year
ended September 27, 2003 as compared to 24.3% and 25.7% of total sales in the
fiscal years ended September 28, 2002 and September 29, 2001, respectively. The
weekly average of same store package sales was $177,000 for the fiscal year
ended September 27, 2003 as compared to $170,000 and $168,000 for the fiscal
years ended September 28, 2002 and September 29, 2001 respectively, an increase
of 4.1% and 5.4% from fiscal years ended September 28, 2002 and September 29,
2001, respectively. During fiscal year 2004, package store sales are expected to
increase primarily due to the opening of a new package liquor store during the
first quarter and the continued increase in the weekly average of same store
package stores.

      Franchise revenue, which includes but is not limited to rental income and
franchise-related income such as franchise royalties, bookkeeping and accounting
fees and reimbursement of attorney's fees, decreased to $904,000 for the fiscal
year ended September 27, 2003 as compared to $985,000 and $977,000 for the
fiscal years ended September 28, 2002 and September 29, 2001, respectively, a
decrease of 8.2% and 7.5% for fiscal years ended September 28, 2002 and
September 29, 2001, respectively.

      Owner's fee represents fees received pursuant to a Management Agreement
from the operation of a club owned by the Company in Atlanta, Georgia. The
Management Agreement was amended effective July 1, 1996, whereby the Company
also receives ten percent of sales exceeding $1,500,000 per annum as additional
owner's fees. Income from this club was $260,000 for the fiscal year ended
September 27, 2003 as compared to $251,000 and $269,000 for the fiscal years
ended September 28, 2002 and September 29, 2001, respectively.

      The gross profit margin for restaurant sales was 65.8% for the fiscal year
ended September 27, 2003 as compared to 66.6% and 63.58% for the fiscal years
ended September 28, 2002 and September 29, 2001, respectively. The gross profit
margin for restaurant sales for the fiscal year ended September 27, 2003 was
adversely effected by increasing costs, a trend which is expected to continue
during fiscal year 2004. The Company offsets increased costs by price increases,
whenever possible.

      The gross profit margin for package goods sales was 27.0% for the fiscal
year ended September 27, 2003 as compared to 25.9% and 27.2% for the fiscal
years ended September 28, 2002 and September 29, 2001, respectively. For the
fiscal year ended September 28, 2002, the gross profit margin for package good
sales was adversely effected by a charge due to a change in accounting method.
Otherwise, the gross profit margin for package good sales has remained constant
for each of the three fiscal years and is expected to remain constant during
fiscal year 2004.


                                      -25-
<PAGE>

      Overall gross profits were 56.1% for the fiscal year ended September 27,
2003, as compared to 57.1% and 54.2% for the fiscal years ended September 28,
2002 and September 29, 2001, respectively.

Operating Costs and Expenses

      Operating costs and expenses for the fiscal year ended September 27, 2003
were $38,229,000 as compared to $36,336,000 and $33,445,000 for the fiscal years
ended September 28, 2002 and September 29, 2001, respectively. Operating
expenses are comprised of the cost of merchandise sold, payroll and related
costs, occupancy costs and selling, general and administrative expenses.
Operating costs and expenses for the fiscal year ended September 27, 2003
increased by 5.2% and 14.3% as compared to operating costs and expenses for the
fiscal years ended September 28, 2002 and September 29, 2001, primarily due to
the opening of the new restaurants and package stores, as well as a general
increase in overall operating costs and expenses. During fiscal year 2004,
operating costs and expenses are expected to continue increasing primarily due
to the restaurant in Weston, Florida being open for the entire year, the opening
of the new restaurant in Stuart, Florida and the opening of a new package liquor
store in Hollywood, Florida. Overall operating costs and expenses are also
expected to continue increasing slightly.

      Payroll and related costs were $11,423,000 for the fiscal year ended
September 27, 2003, as compared to $11,377,000 and $10,346,000 for the fiscal
years September 28, 2002 and September 29, 2001, respectively. Payroll and
related costs for the fiscal year ended September 27, 2003 increased as compared
to payroll and related costs for the fiscal years ended September 28, 2002 and
September 29, 2001, primarily due to the opening of the new restaurants and
package stores. During fiscal year 2004, payroll and related costs are expected
to continue increasing primarily due to the restaurant in Weston, Florida being
open for the entire year, the opening of the new restaurant in Stuart, Florida
and the opening of a new package liquor store in Hollywood, Florida.

      Occupancy costs, which include rent, common area maintenance, repairs and
taxes were $2,158,000 for the fiscal year ended September 27, 2003 as compared
to $1,756,000 and $1,373,000 for the fiscal years ended September 28, 2002 and
September 29, 2001, respectively. The increase in occupancy costs during the
fiscal year ended September 27, 2003 was due primarily to the payment of rent
for the restaurant in Weston, Florida commencing at the start of the second
quarter of fiscal year 2003. During fiscal year 2004, occupancy costs are
expected to continue increasing with the payment of rent for the restaurant in
Weston, Florida for the entire year, the payment of rent for the new restaurant
in Stuart, Florida and the payment of rent for a new restaurant location in
Pinecrest, Florida commencing at the start of the second quarter of fiscal year
2004.

      Selling, general and administrative expenses were $7,534,000 for the
fiscal year ended September 27, 2003 as compared to $6,785,000 and $5,832,000
for the fiscal years ended September 28, 2002 and September 29, 2001,
respectively. The increase in selling, general and administrative expenses
during the fiscal year ended September 27, 2003 was primarily due to the opening
of the new restaurants and package stores. During fiscal year 2004, selling,
general and administrative expenses are expected to continue increasing
primarily due to the restaurant in Weston, Florida being open for the entire
year, the opening of the new restaurant in Stuart, Florida and the opening of a
new package liquor store in Hollywood, Florida.


                                      -26-
<PAGE>

Other Income and Expenses

      Other income and expenses were an expense of ($594,000) for the fiscal
year ended September 27, 2003 as compared to ($717,000) and ($565,000) for the
fiscal years ended September 28, 2002 and September 29, 2001, respectively.
Other income and expenses, which include minority interest in consolidated
limited partnerships, were an expense of ($594,000) for the fiscal year ended
September 27, 2003 as compared to ($659,000) and ($565,000) for the fiscal years
ended September 28, 2002 and September 29, 2001, respectively. Other income and
expenses for the fiscal year ended September 28, 2002 includes the gain of
$459,000 on disposition relating to the eminent domain proceedings. During
fiscal year 2004, other income and expenses are expected to show increased
expense primarily due to the restaurant in Weston, Florida being open for the
entire year and the opening of the new restaurant in Stuart, Florida.

      Interest expense, net of interest income, was $95,000 for the fiscal year
ended September 27, 2003 as compared to $115,000 and $153,000 for each of the
fiscal years ended September 28, 2002 and September 29, 2001, respectively.

      The category "Other, net" was $80,000 for the fiscal year ended September
27, 2003 as compared with $559,000,and $160,000 for the fiscal years ended
September 28, 2002 and ended September 29, 2001, respectively. The increase for
the fiscal year ending September 28, 2002 was attributed to the gain of $456,000
on disposition relating to the eminent domain proceedings which did not reoccur.

Trends

      During the next twelve months management expects continued increases in
restaurant sales, due primarily to the restaurant in Weston, Florida being open
for the entire year, the opening of the new restaurant in Stuart, Florida and
continued increases in same store sales. Package goods sales are also expected
to increase due primarily to the opening of a new package store in Hollywood,
Florida and continued increases in same store sales. Franchise royalties are
expected to increase due to restaurant in Weston, Florida being open for the
entire year, the opening of the new restaurant in Stuart, Florida and continued
increases in same store sales for the limited partnerships and franchises. At
the same time, management also expects higher food costs, especially the cost of
ribs, and overall expenses to increase generally. The Company has already raised
some of its menu prices to offset the higher food costs and will continue to do
so wherever competitively possible. During the next twelve months, management
projects an increase in overall profit before income tax.

      The provision for income taxes was $542,000 for the fiscal year ended
September 27, 2003, $688,000 for fiscal year ended September 28, 2002 and
$489,000 for the fiscal year ended September 29, 2001.

      Subsequent to the end of fiscal year 2003, the Company, as general partner
of the limited partnership which was forced to close its restaurant due to
eminent domain proceedings, closed on the purchase of an existing restaurant in
Pinecrest, Florida to renovate and operate as a "Flanigan's Seafood Bar and
Grill" restaurant. It is anticipated that funds will be raised through a private
offering and the restaurant will be open for business during the fourth quarter
of fiscal year 2004. The Company intends to open additional restaurants as
suitable locations become available, using limited partnerships, of which it is
the general partner, to raise funds to own and operate the same.


                                      -27-
<PAGE>

      The Company does not plan to construct any more buildings for the
operation of a package store and is not actively searching for locations, but if
an appropriate location for a package store becomes available, the Company will
consider the same.

Other Matters

      Impact of Inflation

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

Item 7A. Quantative and Qualitative Disclosures About Market Risk

      The Company does not ordinarily hold market risk sensitive instruments for
trading purposes, but holds one equity security, at a cost of $144,000, for
dividend payments. Even if the price of the equity securities decreased by 10%,
results of operations would be reduced by $14,400, an amount management
considers immaterial.

      The Company recognizes market risk from interest rate exposure. The
Company has two debt arrangements which have variable interest rates. For one of
these instruments, a mortgage note, the Company has entered into an interest
rate swap agreement to hedge the interest rate risk. The other debt instrument
has an outstanding principal balance at September 27, 2003 of $ 190,000. Even if
interest rates increased by 10%, results of operations would be reduced by only
$ 4,000 an amount management considers immaterial.

Interest Rate Risk

At September 27, 2003, the Company's cash resources earn interest at variable
rates. Accordingly, the Company's return on these funds is affected by
fluctuations in interest rates. Any decrease in interest rates will have a
negative effect on the Company's earnings. In addition, the Company incurs
interest charges on debt at variable rates, which to the extent that the Company
has not entered into interest rate swap agreements to hedge this risk, could
negatively impact the Company's earnings. There is no assurance that interest
rates will increase or decrease over the next fiscal year.

Item 8. Financial Statements and Supplementary Data.

      Financial statements of the Company at September 27, 2003, September 28,
2002 and September 29, 2001, which include each of the three years in the period
ended September 27, 2003 and the independent certified public accountants'
report thereon, are included herein.


                                      -28-
<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 2004 Annual Meeting of
Shareholders, filed with the Securities and Exchange Commission pursuant to
regulation 14A under the Securities and Exchange Act of 1934, as amended (the
2004 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 2004 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 2004 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 2004 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
2003 or subsequent to year end.


                                      -29-
<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).

(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


                                      -30-
<PAGE>

partner owning forty percent of the limited partnership (Item 14 (a)(10)(v) of
Form 10-KSB dated September 27, 1997 is incorporated herein by reference).

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

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

(10)(y) Limited Partnership Agreement of CIC Investors #80, Ltd., dated May
2001, between Flanigan's Enterprises, Inc. as General Partner and numerous
limited partners, including Flanigan's Enterprises, Inc., as limited partner
owning twenty five percent of the limited partnership. (Item 14(a) (10)(y) of
Form 1--KSB dated September 29, 2001 is incorporated herein by reference.)

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

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

(13) Registrant's Form 10-K constitutes the Annual Report to Shareholders for
the fiscal year ended September 27, 2003.

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

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

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

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

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

                                   SIGNATURES

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

                            Flanigan's Enterprises, Inc.
                            Registrant

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


                                      -31-
<PAGE>

Date: 1/12/04

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

/s/ JOSEPH G. FLANIGAN        Chairman of the Board,        Date:  1/12/04
----------------------        Chief Executor Officer,
Joseph G. Flanigan            and Director


/s/ EDWARD A. DOXEY           Chief Financial Officer       Date:  1/12/04
----------------------        Secretary and Director
Edward A. Doxey


/s/ MICHAEL ROBERTS           Director                      Date:  1/12/04
----------------------
MICHAEL ROBERTS


/s/ GERMAINE M. BELL          Director                      Date:  1/12/04
----------------------
Germaine M. Bell


/s/ CHARLES E. MCMANUS        Director                      Date:  1/12/04
----------------------
Charles E. McManus


/s/ JEFFREY D. KASTNER        Assistant Secretary           Date:  1/12/04
----------------------         and Director
Jeffrey D. Kastner


WILLIAM PATTON                Vice President, Public        Date:  1/12/04
----------------------        Relations and Director
William Patton

/s/ JAMES G. FLANIGAN         President and Director        Date:  1/12/04
----------------------
James G. Flanigan


/s/ PATRICK J. FLANIGAN       Director                      Date:  1/12/04
-----------------------
Patrick J. Flanigan


                                      -32-
<PAGE>

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

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                        CONSOLIDATED FINANCIAL STATEMENTS

         SEPTEMBER 27, 2003, SEPTEMBER 28, 2002, AND SEPTEMBER 29, 2001

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


<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                          INDEX TO FINANCIAL STATEMENTS

                                                                          PAGE
                                                                          ----

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS                        F-1


CONSOLIDATED FINANCIAL STATEMENTS

   Balance Sheets                                                         F-2

   Statements of Income                                                   F-3

   Statements of Stockholders' Equity                                     F-4

   Statements of Cash Flows                                              F5-F-6

   Notes to Financial Statements                                        F-7-F-29


<PAGE>

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

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

We have audited the accompanying consolidated balance sheets of Flanigan's
Enterprises, Inc. and Subsidiaries as of September 27, 2003 and September 28,
2002, and the related consolidated statements of income, stockholders' equity
and cash flows for each of the three years in the period ended September 27,
2003. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Flanigan's
Enterprises, Inc. and Subsidiaries as of September 27, 2003 and September 28,
2002, and the consolidated results of their operations and their cash flows for
each of the three years in the period ended September 27, 2003 in conformity
with accounting principles generally accepted in the United States.

The accompanying consolidated financial statements have been restated as
discussed in Note 1.

                            RACHLIN COHEN & HOLTZ LLP

Fort Lauderdale, Florida
December 11, 2003


                                      F-1
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                    SEPTEMBER 27, 2003 AND SEPTEMBER 28, 2002

<TABLE>
<CAPTION>
                                                                      2003            2002
                                                                      ----            ----
<S>                                                              <C>             <C>
                                 ASSETS
Current Assets:
    Cash and cash equivalents                                    $  1,587,000    $  1,143,000
    Investments:
      Cetificate of deposit                                           354,000         350,000
      Marketable securities                                           185,000              --
    Notes and mortgages receivable, current maturities, net            23,000          85,000
    Due from franchisees                                               16,000         156,000
    Other receivables                                                 361,000         445,000
    Inventories                                                     1,362,000       1,422,000
    Refundable deposit, major supplier                                 77,000         979,000
    Prepaid expenses                                                  881,000         535,000
    Deferred tax assets                                               112,000         239,000
                                                                 ------------    ------------
      Total current assets                                          4,958,000       5,354,000
                                                                 ------------    ------------

Property and Equipment                                             12,413,000      10,514,000
                                                                 ------------    ------------

Investments in Joint Ventures                                         320,000         142,000
                                                                 ------------    ------------

Other Assets:
    Liquor licenses, net                                              347,000         347,000
    Notes and mortgages receivable, net                               149,000         167,000
    Deferred tax assets                                               208,000         248,000
    Other                                                             338,000         595,000
                                                                 ------------    ------------
         Total other assets                                         1,042,000       1,357,000
                                                                 ------------    ------------
         Total assets                                            $ 18,733,000    $ 17,367,000
                                                                 ============    ============

                  LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
    Accounts payable and accrued expenses                        $  2,108,000    $  1,905,000
    Due to franchisees                                                409,000          49,000
    Current portion of long-term debt                                 278,000         345,000
    Deferred revenues                                                  70,000          75,000
                                                                 ------------    ------------
         Total current liabilities                                  2,865,000       2,374,000
                                                                 ------------    ------------

Long-Term Debt, Net of Current Maturities                           1,314,000       1,593,000
                                                                 ------------    ------------

Minority Interest in Equity of Consolidated Joint Ventures          4,203,000       3,443,000
                                                                 ------------    ------------

Commitments, Contingencies and Other Matters                               --              --

Stockholders' Equity:
    Common stock, $.10 par value; 5,000,000 shares authorized;
      4,197,642 shares issued                                         420,000         420,000
    Capital in excess of par value                                  6,103,000       6,103,000
    Retained earnings                                               9,115,000       8,747,000
    Accumulated other comprehensive income                             26,000              --
    Treasury stock, at cost, 2,271,172 shares                      (5,313,000)     (5,313,000)
                                                                 ------------    ------------
         Total stockholders' equity                                10,351,000       9,957,000
                                                                 ------------    ------------
         Total liabilities and stockholders' equity              $ 18,733,000    $ 17,367,000
                                                                 ============    ============
</TABLE>

                See notes to consolidated financial statements.


                                      F-2
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                        CONSOLIDATED STATEMENTS OF INCOME

    YEARS ENDED SEPTEMBER 27, 2003, SEPTEMBER 28, 2002 AND SEPTEMBER 29, 2001

<TABLE>
<CAPTION>
                                                                       2003            2002             2001
                                                                       ----            ----             ----
                                                                                    (Restated)
<S>                                                                <C>             <C>             <C>
Revenues:
    Restaurant food sales                                          $ 22,489,000    $ 22,086,000    $ 19,976,000
    Restaurant beverage sales                                         6,705,000       6,533,000       5,806,000
    Package goods sales                                               9,777,000       9,174,000       8,907,000
    Franchise-related revenues                                          904,000         985,000         977,000
    Owner's fee                                                         260,000         251,000         269,000
    Other operating income                                              118,000          95,000         103,000
                                                                   ------------    ------------    ------------
                                                                     40,253,000      39,124,000      36,038,000
                                                                   ------------    ------------    ------------
Costs and Expenses:
    Cost of merchandise sold:
       Restaurants and lounges                                        9,978,000       9,620,000       9,417,000
       Package goods                                                  7,136,000       6,798,000       6,487,000
    Payroll and related costs                                        11,423,000      11,377,000      10,346,000
    Occupancy costs                                                   2,158,000       1,756,000       1,373,000
    Selling, general and administrative expenses                      7,534,000       6,785,000       5,832,000
                                                                   ------------    ------------    ------------
                                                                     38,229,000      36,336,000      33,455,000
                                                                   ------------    ------------    ------------

Income from Operations                                                2,024,000       2,788,000       2,583,000
                                                                   ------------    ------------    ------------

Other Income (Expense):
    Interest expense                                                   (140,000)       (175,000)       (221,000)
    Minority interest in earnings of consolidated joint ventures       (599,000)     (1,130,000)       (598,000)
    Interest income                                                      45,000          60,000          68,000
    Joint venture income                                                 20,000          27,000          26,000
    Other                                                                80,000         501,000         160,000
                                                                   ------------    ------------    ------------
                                                                       (594,000)       (717,000)       (565,000)
                                                                   ------------    ------------    ------------

Income Before Provision for Income Taxes                              1,430,000       2,071,000       2,018,000
                                                                   ------------    ------------    ------------

Provision for Income Taxes:
    Current                                                             375,000         519,000         483,000
    Deferred                                                            167,000         169,000           6,000
                                                                   ------------    ------------    ------------
                                                                        542,000         688,000         489,000
                                                                   ------------    ------------    ------------

Net Income                                                         $    888,000    $  1,383,000    $  1,529,000
                                                                   ============    ============    ============

Net Income Per Common Share:
    Basic                                                          $       0.46    $       0.71    $       0.80
                                                                   ============    ============    ============
    Diluted                                                        $       0.45    $       0.70    $       0.80
                                                                   ============    ============    ============

Weighted Average Shares and Equivalent Shares Outstanding:
    Basic                                                             1,926,000       1,961,000       1,903,000
                                                                   ============    ============    ============
    Diluted                                                           1,955,000       1,989,000       1,922,000
                                                                   ============    ============    ============
</TABLE>

                See notes to consolidated financial statements.


                                      F-3
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

    YEARS ENDED SEPTEMBER 27, 2003, SEPTEMBER 28, 2002 AND SEPTEMBER 29, 2001

<TABLE>
<CAPTION>
                                                                                                         Notes
                                                         Common Stock                                  Receivable
                                                         ------------       Capital in                 on Sale of
                                                                            Excess of      Retained      Common
                                                      Shares      Amount    Par Value      Earnings      Stock
                                                     ---------   --------   ----------    ----------   ----------

<S>                                                  <C>         <C>        <C>           <C>           <C>
Balance, September 30, 2000                          4,197,642   $420,000   $6,052,000    $6,565,000    $(181,000)

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

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

Year Ended September 28, 2002:
    Dividends paid ($0.25 per share)                        --         --           --      (499,000)          --
    Net income                                              --         --           --     1,383,000           --
    Purchase of treasury stock                              --         --           --            --           --
    Exchange of shares - exercise of stock options          --         --       75,000            --           --
    Payments received on notes receivable                   --         --           --            --      291,000
                                                     ---------   --------   ----------    ----------    ---------

Balance, September 28, 2002                          4,197,642    420,000    6,103,000     8,747,000           --

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

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

Balance, September 27, 2003                          4,197,642   $420,000   $6,103,000    $9,115,000    $      --
                                                     =========   ========   ==========    ==========    =========

<CAPTION>

                                                       Accumulated         Treasury Stock
                                                          Other            --------------
                                                      Comprehensive
                                                          Income        Shares       Amount          Total
                                                      -------------   ----------   -----------    -----------

<S>                                                      <C>          <C>          <C>            <C>
Balance, September 30, 2000                              $    --      2,341,164    $(5,189,000)   $ 7,667,000

Year Ended September 29, 2001:
    Dividends paid ($0.12 per share)                          --             --             --       (231,000)
    Net income                                                --             --             --      1,529,000
    Purchase of treasury stock                                --          4,000        (18,000)       (18,000)
    Notes receivable issued upon exercise
       of stock options                                       --        (70,000)       155,000          9,000
    Payments received on notes receivable                     --             --             --         12,000
                                                         -------     ----------    -----------    -----------

Balance, September 29, 2001                                   --      2,275,164     (5,052,000)     8,968,000

Year Ended September 28, 2002:
    Dividends paid ($0.25 per share)                          --             --             --       (499,000)
    Net income                                                --             --             --      1,383,000
    Purchase of treasury stock                                --         68,803       (423,000)      (423,000)
    Exchange of shares - exercise of stock options            --        (72,795)       162,000        237,000
    Payments received on notes receivable                     --             --             --        291,000
                                                         -------     ----------    -----------    -----------

Balance, September 28, 2002                                   --      2,271,172     (5,313,000)     9,957,000

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

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

Balance, September 27, 2003                              $26,000      2,271,172    $(5,313,000)   $10,351,000
                                                         =======     ==========    ===========    ===========
</TABLE>

                See notes to consolidated financial statements.


                                      F-4
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

    YEARS ENDED SEPTEMBER 27, 2003, SEPTEMBER 28, 2002 AND SEPTEMBER 29, 2001

<TABLE>
<CAPTION>
                                                                          2003           2002           2001
                                                                          ----           ----           ----
<S>                                                                   <C>            <C>            <C>
Cash Flows from Operating Activities:
   Net income                                                         $   888,000    $ 1,383,000    $ 1,529,000
   Adjustments to reconcile net income to net cash provided by
     operating activities:
       Depreciation and amortization                                    1,187,000      1,041,000      1,032,000
       Deferred income taxes                                              167,000        169,000          6,000
       Minority interest in earnings of consolidated joint ventures       599,000      1,130,000        598,000
       Recognition of deferred revenues                                    (5,000)        (5,000)        (4,000)
       Gain on disposal of property, equipment and liquor licenses             --       (440,000)       (21,000)
       Joint venture income                                               (20,000)       (27,000)       (26,000)
       Changes in operating assets and liabilities:
         (Increase) decrease in:
           Due from franchisees                                           140,000        412,000       (439,000)
           Other receivables                                               84,000        (84,000)        11,000
           Inventories                                                     60,000        (48,000)        51,000
           Prepaid expenses                                              (346,000)      (110,000)       (82,000)
           Refundable deposit, major supplier                             902,000       (979,000)            --
           Other assets                                                   199,000        (98,000)       (19,000)
         Increase (decrease) in:
           Accounts payable and accrued expenses                          203,000        118,000       (176,000)
           Due to franchisees                                             360,000         33,000         16,000
                                                                      -----------    -----------    -----------
             Net cash provided by operating activities                  4,418,000      2,495,000      2,476,000
                                                                      -----------    -----------    -----------

Cash Flows from Investing Activities:
   Collections on notes and mortgages receivable                           80,000         12,000         79,000
   Notes receivable issued                                                     --        (39,000)            --
   Purchase of property and equipment                                  (3,028,000)    (1,216,000)    (2,560,000)
   Investment in certificate of deposit                                    (4,000)      (350,000)            --
   Investment in marketable securities                                   (159,000)            --             --
   Purchase of liquor licenses                                                 --        (50,000)            --
   Sale of liquor license                                                      --         45,000             --
   Proceeds from eminent domain                                                --        700,000             --
   Deposit on investment                                                 (188,000)            --             --
   Distributions to joint venture minority partners                      (987,000)    (1,128,000)      (680,000)
   Distributions from unconsolidated joint venture                         30,000         17,000         10,000
   Proceeds from joint ventures interests                               1,148,000             --      1,486,000
                                                                      -----------    -----------    -----------
             Net cash used in investing activities                     (3,108,000)    (2,009,000)    (1,665,000)
                                                                      -----------    -----------    -----------

Cash Flows from Financing Activities:
   Borrowings of long-term debt                                                --             --        895,000
   Payments of long-term debt                                            (346,000)      (381,000)      (417,000)
   Payments of obligations under capital leases                                --             --       (135,000)
   Payments of damages payable on terminated or rejected leases                --       (117,000)      (283,000)
   Collections on notes receivable, sale of common stock                       --        291,000         12,000
   Purchase of treasury stock                                                  --       (423,000)       (18,000)
   Dividends paid                                                        (520,000)      (499,000)      (231,000)
   Proceeds from exercise of stock options                                     --        237,000          9,000
                                                                      -----------    -----------    -----------
             Net cash used in financing activities                       (866,000)      (892,000)      (168,000)
                                                                      -----------    -----------    -----------

Net Increase (Decrease) in Cash and Cash Equivalents                      444,000       (406,000)       643,000

Cash and Cash Equivalents, Beginning                                    1,143,000      1,549,000        906,000
                                                                      -----------    -----------    -----------

Cash and Cash Equivalents, Ending                                     $ 1,587,000    $ 1,143,000    $ 1,549,000
                                                                      ===========    ===========    ===========
</TABLE>

                                                                     (Continued)

                See notes to consolidated financial statements.


                                      F-5
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

    YEARS ENDED SEPTEMBER 27, 2003, SEPTEMBER 28, 2002 AND SEPTEMBER 29, 2001

                                   (Continued)

<TABLE>
<CAPTION>
                                                                2003        2002        2001
                                                                ----        ----        ----

<S>                                                           <C>         <C>         <C>
Supplemental Disclosure of Cash Flow Information:
   Cash paid during the year for:
     Interest                                                 $ 140,000   $ 175,000   $ 215,000
                                                              =========   =========   =========
     Income taxes                                             $ 425,000   $ 493,000   $ 433,000
                                                              =========   =========   =========

   Non-Cash Financing and Investing Activities:
     Notes receivable issued upon exercise of stock options   $      --   $      --   $ 122,000
                                                              =========   =========   =========
     Notes receivable for sale of liquor license              $      --   $  67,000   $      --
                                                              =========   =========   =========
</TABLE>

                See notes to consolidated financial statements.


                                      F-6
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

          SEPTEMBER 27, 2003, SEPTEMBER 28, 2002 AND SEPTEMBER 29, 2001

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      Organization and Capitalization

            Incorporated in 1959, Flanigan's Enterprises, Inc. ("Flanigan's" or
            the "Company") operates in South Florida as a chain of full-service
            restaurants and package liquor stores. Restaurant food and beverage
            sales make up the majority of total revenue. At September 27, 2003,
            the Company owned and operated two full-service restaurants, four
            package liquor stores and four combination full-service restaurants
            and package liquor stores in Florida. In addition, Flanigan's owns
            one club in Georgia, which is operated pursuant to a management
            agreement with an unrelated third party. The Company holds interests
            in six of the twelve franchised units through joint venture
            investments. The Company owns 100% of one of the joint venture
            investments as a result of an eminent domain action (see Note 5).
            The Company's restaurants are operated under the "Flanigan's Seafood
            Bar and Grill" servicemark while the Company's package stores are
            operated under the "Big Daddy's Liquors" servicemark.

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

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

      Principles of Consolidation

            The consolidated financial statements include the accounts of
            Flanigan's Enterprises, Inc. and its subsidiaries, all of which are
            wholly owned, and the accounts of five of the six joint venture
            investments, which are consolidated due to the Company's controlling
            interests. All significant intercompany transactions and balances
            have been eliminated in consolidation.

      Use of Estimates

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

      Cash and Cash Equivalents

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


                                      F-7
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

      Investments

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

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

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

      Inventories

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

      Liquor Licenses

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

      Property and Equipment

            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.
            Depreciation and amortization commences when the asset is placed in
            service.

            Leasehold interests are amortized over the term of the lease up to a
            maximum of 15 years. In fiscal year 2003, the Company reevaluated
            its estimate of the useful lives for its leasehold improvements.
            Leasehold improvements are currently being amortized over the life
            of the lease up to a maximum of 20 years. The change in estimate has
            been accounted for prospectively in the accompanying financial
            statements and did not result in a significant adjustment to
            amortization expense.

            If the locations are sold or abandoned before the end of the
            amortization period, the unamortized costs are expensed. The office
            building is being depreciated over forty years.


                                      F-8
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

      Investment in Joint Ventures

            The Company uses the consolidation method of accounting when the
            Company has a controlling interest in other companies, joint
            ventures, and partnerships. The Company uses the equity method of
            accounting when the Company has an interest between twenty to fifty
            percent in other companies, joint ventures, and partnerships, and
            does not exercise control. Under the equity method, original
            investments are recorded at cost and are adjusted for the Company's
            share of undistributed earnings or losses. All significant
            intercompany profits are eliminated.

      Concentrations of Credit Risk

            Financial instruments that potentially subject the Company to
            concentrations of credit risk are cash and cash equivalents,
            certificates of deposit, marketable securities, other receivables
            and notes and mortgages receivable.

            From time to time during the year, the Company had deposits in
            financial institutions in excess of the federally insured limits. At
            September 27, 2003, the Company had deposits in excess of federally
            insured limits of approximately $2,237,000. The Company maintains
            its cash with high quality financial institutions, which the Company
            believes limits these risks.

            In addition, the Company maintains an investment account with a
            financial institution that is not insured by the FDIC. These funds,
            which were invested primarily in marketable securities at September
            27, 2003, may be subject to insurance by SIPC, Securities Investor
            Protection Corporation, subject to various limitations. At September
            27, 2003, approximately $185,000 were held in these accounts.

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

      Major Supplier/Refundable Deposit

            In a prior year, the Company had entered into a master distribution
            agreement with a major supplier, which entitled the Company to
            receive certain purchase discounts, rebates and advertising
            allowances. The Company recorded these discounts, rebates and
            allowances as earned, and presented discounts as a reduction of cost
            of sales, advertising allowances as a reduction of selling, general
            and administrative expenses, and rebates as a reduction of cost of
            sales. In exchange, the Company agreed to make payments of 35% of
            restaurant sales weekly against amounts owed for food purchases. The
            Company was required to make an initial deposit of $750,000, which
            was refundable, to the extent not applied against amounts owing,


                                      F-9
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

      Major Supplier/Refundable Deposit (Continued)

            upon termination of the agreement. In September 2003, the Company
            and the supplier mutually agreed to terminate the agreement and the
            majority of the deposit was applied to amounts owed. At September
            27, 2003 approximately $77,000 of the deposit was remaining, which
            was applied to amounts owed subsequent to year end. Effective upon
            termination of the agreement, the Company no longer receives
            purchase discounts, rebates or advertising allowances from the
            supplier. The Company purchases substantially all of its food
            products from this supplier; however, management believes that
            several other alternative vendors are available if necessary.

      Revenue Recognition

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

      Pre-opening Costs

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

      Advertising Costs

            Advertising costs are expensed as incurred. Advertising costs
            incurred for the years ended September 27, 2003, September 28, 2002
            and September 29, 2001 were approximately $296,000, $263,000 and
            $262,000, respectively.

      Fair Value of Financial Instruments

            The respective carrying value of certain on-balance-sheet financial
            instruments approximated their fair value. These instruments include
            cash and cash equivalents, marketable securities, notes and
            mortgages receivable, other receivables, and long-term debt. Fair
            values were assumed to approximate carrying values for those
            financial instruments, which are short-term in nature or are
            receivable or payable on demand.

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


                                      F-10
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

      Derivative Financial Instruments and Hedging Activities

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

            Derivatives are held only for the purpose of hedging such risks, not
            for speculation. Generally, the Company entered into the hedging
            relationship such that changes in the fair values or cash flows of
            items and transactions being hedged are expected to be offset by
            corresponding changes in the value of the derivative. At September
            27, 2003, a hedging relationship existed for the mortgage obligation
            described in Note 8.

      Income Taxes

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

      Comprehensive Income

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

      Stock-Based Compensation

            Statement of Financial Accounting Standards No. 123, "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.


                                      F-11
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

      Long-Lived Assets

            The Company continually evaluates whether events and circumstances
            have occurred that may warrant revision of the estimated life of its
            intangible and other long-lived assets or whether the remaining
            balance of its intangible and other long-lived assets should be
            evaluated for possible impairment. If and when such factors, events
            or circumstances indicate that intangible or other long-lived assets
            should be evaluated for possible impairment, the Company will
            determine the fair value of the asset by making an estimate of
            expected future cash flows over the remaining lives of the
            respective assets and compare that fair value with the carrying
            value of the assets in measuring their recoverability. In
            determining the expected future cash flows, the assets will be
            grouped at the lowest level for which there are cash flows, at the
            individual store level.

      Reclassifications

            Certain amounts in the 2002 and 2001 financial statements have been
            reclassified to conform with the 2003 financial statements.


      Recently Issued Accounting Pronouncements

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

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


                                      F-12
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

      Recently Issued Accounting Pronouncements (Continued)

            In January 2003, the Financial Accounting Standards Board issued
            Interpretation 46, "Consolidation of Variable Interest Entities" an
            Interpretation of ARB 51. This statement requires under certain
            circumstances consolidation of variable interest entities (primarily
            joint ventures and other participating activities). The adoption of
            this statement did not have a significant impact on the Company's
            financial position or results of operations.

            In December 2002, the Financial Accounting Standards Board issued
            SFAS No. 148, "Accounting for Stock-Based Compensation - Transition
            and Disclosure." SFAS No. 148 amends SFAS No. 123 as it relates to
            the transition by an entity to the fair value method of accounting
            for stock-based employee compensation. The provisions of SFAS No.
            148 are effective for financial statements for fiscal years ending
            after December 15, 2002. The adoption of this statement did not have
            a significant impact on the Company's financial position or results
            of operations.

            In November 2002, the Financial Accounting Standards Board issued
            Interpretation 45, "Guarantor's Accounting and Disclosure
            Requirements for Guarantees, Including Indirect Guarantees of
            Indebtedness of Others" and interpretation of SFAS No. 5, 57, and
            107 and rescission of SFAS Interpretation No. 34. This statement
            addresses the disclosures to be made by a guarantor in its interim
            and annual financial statements about its obligations under
            guarantees. This interpretation also clarifies the requirements
            related to the recognition of a liability by a guarantor at the
            inception of a guarantee for the obligations the guarantor has
            undertaken in issuing that guarantee. The adoption of this statement
            did not have a significant impact on the Company's financial
            position or results of operations.

            In October 2002, the Financial Accounting Standards Board issued
            SFAS No. 147, "Acquisitions of Certain Financial Institutions." This
            statement amends SFAS No. 72, SFAS No. 144 and FASB Interpretation
            No. 9. FASB Statement No. 72, "Accounting for Certain Acquisitions
            of Banking or Thrift Institutions, and FASB Interpretation No. 9,
            "Applying APB Opinions No. 16 and 17 When a Savings and Loan
            Association or a Similar Institution Is Acquired in a Business
            Combination Accounted for by the Purchase Method, provided
            interpretive guidance on the application of the purchase method to
            acquisitions of financial institutions. Except for transactions
            between two or more mutual enterprises, this Statement removes
            acquisitions of financial institutions from the scope of both
            Statement 72 and Interpretation 9 and requires that those
            transactions be accounted for in accordance with FASB Statements No.
            141, "Business Combinations," and No. 142, "Goodwill and Other
            Intangible Assets." In addition, this Statement amends FASB
            Statement No. 144, "Accounting for the Impairment or Disposal of
            Long-Lived Assets," to include in its scope long-term
            customer-relationship intangible assets of financial institutions
            such as depositor- and borrower-relationship intangible assets and
            credit cardholder intangible assets. The adoption of SFAS No. 147
            did not have a material effect on the consolidated financial
            statements.


                                      F-13
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

      Recently Issued Accounting Pronouncements (Continued)

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

            In August 2001, the Financial Accounting Standards Board issued SFAS
            No. 144, "Accounting for the Impairment or Disposal of Long-Lived
            Assets". SFAS No. 144, which was adopted by the Company in the first
            quarter of fiscal 2003, requires testing for recoverability of
            long-lived assets whenever events or circumstances indicate that the
            carrying value may not be recoverable. An impairment loss shall be
            recognized when the carrying value of a long-lived asset exceeds its
            fair value. The adoption of SFAS No. 144 did not have a material
            effect on the consolidated financial statements.

            In June 2001, the Financial Accounting Standards Board issued SFAS
            No. 143, "Accounting for Asset Retirement Obligations". The
            statement addresses accounting for and reporting obligations
            relating to the retirement of long lived assets by requiring that
            the fair value of a liability for an asset retirement obligation be
            recognized in the period in which it is incurred if a reasonable
            estimate of fair value can be made. The statement was effective for
            the Company's financial statements for the fiscal year ended
            September 27, 2003. The adoption of SFAS No. 143 did not have a
            material effect on the consolidated financial statements.

            Also in June 2001, the Financial Accounting Standards Board issued
            SFAS No. 142, "Goodwill and Other Intangible Assets". SFAS No. 142
            requires companies to account for goodwill and other intangibles in
            the following manner. Intangible assets which are acquired shall be
            recognized and measured based on fair value. Recognized intangible
            assets are to be amortized over their useful life. Goodwill and
            intangible assets determined to have an indefinite life are not
            amortized. Intangible assets that are not amortized and goodwill
            shall be tested for impairment annually. The provisions of SFAS No.
            142 were applied by the Company in fiscal year ended September 27,
            2003. The adoption of SFAS No. 142 did not have a material effect on
            the consolidated financial statements.

      Restatement

            In fiscal year 2003, the Company determined that certain joint
            venture revenue and costs of approximately equal amounts were
            reflected twice in the accompanying consolidated income statement
            for the year ended September 28, 2002. As a result, the Company has
            restated the accompanying consolidated income statement to reflect
            this change. This restatement resulted in no change to net income or
            the related earnings per share information, or to stockholders'
            equity.


                                      F-14
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 2. INVESTMENTS

      The Company holds a certificate of deposit recorded at cost which
      approximates fair value. Cost and fair value of investments available for
      sale are as follows:

                                                                          2003
                                                                          ----

      Cost - equity instruments                                         $159,000
      Gross unrealized gains                                              26,000
                                                                        --------
      Total                                                             $185,000
                                                                        ========

      Certificate of deposit                                            $354,000
                                                                        ========

NOTE 3. NOTES AND MORTGAGES RECEIVABLE

      Receivables, net of allowances for uncollectible amounts, consist of the
      following at September 27, 2003 and September 28, 2002:

<TABLE>
<CAPTION>
                                                                             2003       2002
                                                                             ----       ----
<S>                                                                        <C>        <C>
      Notes and mortgages receivable from unrelated parties, bearing
         interest at rates ranging from 10.5% to 15% and due in varying
         installments through 2013                                         $ 70,000   $108,000

      Notes and mortgages receivable from related parties, bearing
         interest at rates ranging from 10% to 14% and due in varying
         installments through 2007                                          102,000    144,000
                                                                           --------   --------
                                                                            172,000    252,000
      Amount representing current portion                                    23,000     85,000
                                                                           --------   --------
                                                                           $149,000   $167,000
                                                                           ========   ========
</TABLE>

      The majority of the notes and mortgages receivable represent amounts owed
      to the Company for store operations which were sold. Unless a significant
      amount of cash is received on the sale, a pro rata portion of the gain is
      deferred and recognized only as payments on the notes and mortgages are
      received by the Company. Any losses on sales of stores are recognized
      currently. Approximately $5,000 of deferred gains were recognized on
      collections of such notes receivable during each of the fiscal years ended
      September 27, 2003 and September 28, 2002 and $4,000 was recognized during
      the fiscal year ended September 29, 2001.

      Future scheduled payments on the receivables at September 27, 2003 consist
      of the following:

      2004                                                              $ 23,000
      2005                                                                20,000
      2006                                                                13,000
      2007                                                                72,000
      2008                                                                    --
      Thereafter                                                          44,000
                                                                        --------
                                                                        $172,000
                                                                        ========


                                      F-15
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 4.  PROPERTY AND EQUIPMENT

<TABLE>
<CAPTION>
                                                              September 27,   September 28,
                                                                  2003            2002
                                                                  ----            ----
<S>                                                            <C>             <C>
            Furniture and equipment                            $ 8,500,000     $ 7,733,000
            Leasehold interests and improvements                 8,200,000       7,244,000
            Land and land improvements                           3,587,000       3,437,000
            Building and improvements                            1,746,000       1,265,000
            Vehicles                                               231,000         204,000
            Construction in progress                               501,000              --
                                                               -----------     -----------
                                                                22,765,000      19,883,000
            Less accumulated depreciation and amortization      10,352,000       9,369,000
                                                               -----------     -----------
                                                               $12,413,000     $10,514,000
                                                               ===========     ===========
</TABLE>

NOTE 5. INVESTMENTS IN JOINT VENTURES

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

      Beginning with the limited partnership which owns the restaurant in
      Kendall, Florida and for all limited partnerships formed subsequent
      thereto for the purpose of owning and operating a restaurant under the
      "Flanigan's Seafood Bar and Grill" servicemark, a standard financial
      arrangement has been used in each limited partnership agreement. Under
      this financial arrangement, until the limited partnership has received an
      aggregate sum equal to the initial investment of all limited partners from
      the net profit from the operation of the restaurant, the limited
      partnership receives an aggregate sum equal to 25% of the initial
      investment of all limited partners first each year, with an additional net
      profit divided equally between the Company, as manager of the restaurant,
      and the limited partnership. Once the limited partnership has received an
      aggregate sum equal to the initial investment of all limited partners from
      the net profit from the operation of the restaurant, the net profit is
      divided equally between the Company, as manager of the restaurant, and the
      limited partnership. As of September 27, 2003, only the limited
      partnership which owns the restaurant in Kendall, Florida has received an
      aggregate sum equal to the initial investment of all limited partners from
      the net profit from the operation of the restaurant and the Company
      receives one-half (1/2) of the net profit as manager of the restaurant.
      The Company plans to continue forming limited partnerships to raise funds
      to own and operate restaurants under the "Flanigan's Seafood Bar and
      Grill" servicemark using the same financial arrangement.


                                      F-16
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 5. INVESTMENTS IN JOINT VENTURES (Continued)

      Pinecrest, Florida

            The Company operated a restaurant in Miami, Florida under the
            "Flanigan's Seafood Bar and Grill" servicemark pursuant to a joint
            venture agreement. The Company is the general partner and had a
            fifty percent limited partnership interest. The Company closed the
            restaurant in the second quarter of 2002 as a result of an eminent
            domain action. The partnership received $700,000 in the eminent
            domain action and recognized a gain on disposal of approximately
            $459,000, which is included in other income in the accompanying
            consolidated statement of income. The unrelated joint venture
            partner received $350,000 in full settlement of their interest and
            the Company controls 100% of the partnership as of September 27,
            2003.

            During the third quarter of fiscal year 2003, Flanigan's, as general
            partner of the limited partnership, entered into a Sale of Business
            Agreement for the purchase of an existing restaurant in Pinecrest,
            Florida. During the first quarter of fiscal year 2004, Flanigan's,
            as general partner of the limited partnership, closed on the
            transaction with Flanigan's agreeing to unconditionally guaranty the
            lease for the business premises (see Note 9), as required by the
            landlord in order to procure its consent to the assignment of the
            lease. As of September 27, 2003, the Company had made an initial
            deposit of approximately $188,000 towards the total purchase price
            of $390,000. This entity is consolidated in the accompanying
            financial statements.

            In the second quarter of fiscal 2004, the limited partnership
            expects to raise equity funds in the approximate amount of
            $2,500,000 to renovate the premises and provide working capital to
            begin operations. The Company expects to retain a 33% limited
            partnership interest, as well as its general partnership interest.
            The Company anticipates that the restaurant will open for business
            in the fourth quarter fiscal 2004.

      Fort Lauderdale, Florida

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

      Surfside, Florida

            The Company has an investment in a limited partnership, which
            purchased the assets of a restaurant in Surfside, Florida and
            renovated it for operation under the "Flanigan's Seafood Bar and
            Grill" servicemark. The Company acts as general partner of the
            limited partnership and is also a forty-two percent limited partner.
            Other related parties, including, but not limited to, officers and
            directors of the Company and their families are also investors. This
            entity is consolidated in the accompanying financial statements.


                                      F-17
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 5. INVESTMENTS IN JOINT VENTURES (Continued)

      Kendall, Florida

            The Company owns an investment in a limited partnership, which
            constructed and now operates a restaurant under the "Flanigan's
            Seafood Bar and Grill" servicemark in Kendall, Florida. Construction
            began in late 1999 and the restaurant opened in April 2000. The
            Company is the general partner and has a forty percent limited
            partnership interest. As of April 1, 2003, the limited partners had
            received distribution from the limited partnership equal to their
            original investment and pursuant to the limited partnership
            agreement, the Company thereafter receives fifty percent of the net
            profit from the operation of the restaurant as a management fee.
            This entity is consolidated in the accompanying financial
            statements.

      West Miami, Florida

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

      Weston, Florida

            During 2002, the Company made an investment in a limited
            partnership, which acquired and renovated a restaurant under the
            "Flanigan's Seafood Bar and Grill" servicemark in Weston, Florida.
            The restaurant opened for business in January 2003. The Company is
            the general partner and has a twenty-eight percent limited
            partnership interest as of September 27, 2003. Other related
            parties, including, but not limited to, officers and directors of
            the Company and their families are also investors. This entity is
            consolidated in the accompanying financial statements.

      Stuart, Florida

            Subsequent to year end, the Company made an investment in a limited
            partnership, which acquired and renovated a restaurant under the
            "Flanigan's Seafood Bar and Grill" servicemark in Stuart, Florida.
            The Company became the general partner and purchased a twelve
            percent limited partnership interest. Other related parties,
            including, but not limited to, officers and directors of the Company
            and their families are also investors. Prior to year-end, the
            Company incurred approximately $501,000 of construction costs
            associated with the new location on behalf of the joint venture,
            which will be repaid. The partnership, in a private placement, has
            raised approximately $1.2 million of investment capital as of
            September 27, 2003, which is being held in escrow until the total
            minimum funds of $1.5 million are raised. In the first quarter of
            fiscal year 2004, the total minimum funds were raised and the funds
            were released to the partnership. The Company anticipates the
            restaurant to be open for business in January 2004. This entity is
            consolidated in the accompanying financial statements.


                                      F-18
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 5. INVESTMENTS IN JOINT VENTURES (Continued)

      Summary

            All joint ventures, other than Fort Lauderdale, are consolidated in
            the accompanying financial statements due to the controlling
            interest of the general partner. The following is a summary of
            condensed unaudited financial information pertaining to the
            Company's joint venture investment in Fort Lauderdale, Florida:

                                                2003         2002         2001
                                                ----         ----         ----
            Financial Position:
              Current assets                $   63,000   $   59,000   $   47,000
              Non-current assets               492,000      545,000      633,000
              Current liabilities               26,000       57,000      126,000
              Non-current liabilities           99,000      106,000      112,000

            Operating Results:
              Revenues                       2,165,000    2,066,000    2,122,000
              Gross profit                   1,401,000    1,291,000    1,349,000
              Net income                       125,000      107,000      105,000

NOTE 6. LIQUOR LICENSES

      The Company stopped amortizing liquor licenses September 29, 2002. Liquor
      licenses are tested for impairment in September of each fiscal year. The
      fair value of liquor licenses at September 27, 2003 exceeded the carrying
      amount, therefore, no impairment loss was recognized. The fair value of
      the liquor licenses was estimated using the present value of future cash
      flows. At September 27, 2003, the total carrying amount of liquor licenses
      was approximately $347,000. There were no liquor licenses acquired in
      fiscal year 2003.

NOTE 7. INCOME TAXES

      The components of the Company's provision for income taxes, for the fiscal
      years ended 2003, 2002 and 2001 are as follows:

                                                2003         2002         2001
                                                ----         ----         ----
            Current:
               Federal                        $284,000     $383,000     $366,000
               State                            91,000      136,000      117,000
                                              --------     --------     --------
                                               375,000      519,000      483,000
                                              --------     --------     --------
            Deferred:
               Federal                         160,000      161,000        6,000
               State                             7,000        8,000           --
                                              --------     --------     --------
                                               167,000      169,000        6,000
                                              --------     --------     --------
                                              $542,000     $688,000     $489,000
                                              ========     ========     ========


                                      F-19
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 7. INCOME TAXES (Continued)

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

<TABLE>
<CAPTION>
                                                               2003         2002         2001
                                                               ----         ----         ----
<S>                                                         <C>          <C>          <C>
            Tax provision at the statutory rate of 34%      $ 485,000    $ 704,000    $ 686,000
            State income taxes, net of federal income tax      43,000       62,000       61,000
            Deferred income taxes                             167,000      169,000        6,000
            Tip credit utilization                           (199,000)    (261,000)    (256,000)
            Other                                              46,000       14,000       (8,000)
                                                            ---------    ---------    ---------
                                                            $ 542,000    $ 688,000    $ 489,000
                                                            =========    =========    =========
</TABLE>

      At September 27, 2003, the Company has available tip credit carryforwards
      of approximately $92,000, which expire through 2015, and alternative
      minimum tax credit carryforwards of approximately $74,000, which do not
      expire.

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

      The components of the deferred tax assets were as follows at September 27,
      2003 and September 28, 2002:

<TABLE>
<CAPTION>
                                                                   2003         2002
                                                                   ----         ----
<S>                                                             <C>          <C>
            Current:
               Tip credit carryforward                          $  92,000    $ 149,000
               Alternative minimum tax credit                          --       74,000
               Accruals for potential uninsured claims             20,000       16,000
                                                                ---------    ---------
                                                                $ 112,000    $ 239,000
                                                                =========    =========
            Long-Term:
               Book/tax differences in property and equipment   $ 160,000    $ 201,000
               Alternative minimum tax credit                      74,000           --
               Joint venture investments                          (26,000)      47,000
                                                                ---------    ---------
                                                                $ 208,000    $ 248,000
                                                                =========    =========
</TABLE>


                                      F-20
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 8. LONG-TERM DEBT

<TABLE>
<CAPTION>
                                                                                   September 27,    September 28,
                                                                                       2003             2002
                                                                                       ----             ----
<S>                                                                                 <C>              <C>
      Mortgage payable to bank; secured by first mortgage on a building;
      payable $1,594 per month, plus interest through maturity in August,
      2008, at which time the unpaid principal of approximately $736,000 plus
      unpaid interest becomes due. The Company has entered into an interest
      rate swap agreement for a notional amount of approximately $895,000
      The interest rate swap agreement hedges the interest rate risk of the
      mortgage payable to a fixed rate of 8.62%                                     $  857,000       $  876,000

      Note payable to bank, unsecured, bearing interest at prime (4% at
      September 27, 2003); payable in monthly installments of principal and
      interest of approximately $20,000, maturing in July, 2004                        190,000          418,000

      Mortgage payable, secured by land, bearing interest at 8%; payable in
      monthly installments of principal and interest of approximately $3,000,
      maturing in April 2013                                                           302,000          314,000

      Note payable, chattel mortgage secured by general assets of a joint
      venture, bearing interest at 8%, payable monthly in installments of
      principal and interest of approximately $6,100, maturing in July 2007            243,000          295,000

      Other                                                                                 --           35,000
                                                                                    ----------       ----------
                                                                                     1,592,000        1,938,000
      Less current portion                                                             278,000          345,000
                                                                                    ----------       ----------
                                                                                    $1,314,000       $1,593,000
                                                                                    ==========       ==========

      Long-term debt at September 27, 2003 matures as follows:

      2004                                                                                           $  278,000
      2005                                                                                               95,000
      2006                                                                                              118,000
      2007                                                                                              107,000
      2008                                                                                               43,000
      Thereafter                                                                                        951,000
                                                                                                     ----------
                                                                                                     $1,592,000
                                                                                                     ==========

</TABLE>


                                      F-21
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 9. COMMITMENTS, CONTINGENCIES AND OTHER MATTERS

      Legal Matters

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

            During fiscal year 2000, the Company was served with several
            complaints alleging violations of the Americans with Disabilities
            Act ("ADA") at all of its locations. As of September 27, 2003, all
            complaints have been settled, except for one location. The Company
            has cured, or is in the process of curing all ADA violations
            pursuant to the settlement agreements and management believes that
            the one location that has not been settled is in compliance.

      Leases

            The Company leases a substantial portion of the land and building
            used in its operations under leases with initial terms expiring
            between 2004 and 2049. Renewal options are available on many of the
            leases. Most of the leases are fixed rent agreements. In three
            instances, lease rentals are subject to sales overrides ranging from
            1.75% - 4% of annual sales in excess of between $1,162,000 and
            $1,200,000. Rent expense is recognized on a straight line basis over
            the term of the lease. Certain of the leases are subject to fair
            market rental appraisals at the time of renewal. Certain properties
            are subleased through various expiration dates.

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

            During the fourth quarter of fiscal year 2001, the Company entered
            into a ground lease for an out parcel in Hollywood, Florida. The
            Company constructed a building on the out parcel, one-half (1/2) of
            which is to be used by the Company for the operation of a package
            liquor store and the other one-half (1/2) is planned to be subleased
            by the Company as retail space. The Company opened the package
            liquor store for business during November 2003.

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

            2004                                                    $ 1,647,000
            2005                                                      1,479,000
            2006                                                      1,101,000
            2007                                                        928,000
            2008                                                        881,000
            Thereafter                                                5,134,000
                                                                    -----------
               Total                                                $11,170,000
                                                                    ===========


                                      F-22
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

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

      Leases (Continued)

            Total rent expense for all operating leases was approximately
            $1,632,000, $1,350,000 and $1,040,000 in 2003, 2002 and 2001,
            respectively, and is included in "Occupancy costs" in the
            accompanying consolidated statements of income. This total rent
            expense is comprised of the following:

                                               2003         2002         2001
                                               ----         ----         ----

            Minimum                         $1,468,000   $1,207,000   $  897,000
            Contingent                         164,000      143,000      143,000
                                            ----------   ----------   ----------
            Total                           $1,632,000   $1,350,000   $1,040,000
                                            ==========   ==========   ==========

            The Company guarantees various leases for franchisees. Remaining
            rental payments required under these leases total approximately
            $3,290,000.

      Franchise Programs

            At September 27, 2003, the Company operated twelve units under
            franchise agreements, six of which the Company has an ownership
            interest in pursuant to joint venture agreements. Of the remaining
            six franchised stores, four are owned and operated by related
            parties. Under the franchise agreements, the Company agrees to
            provide guidance, advice and management assistance to the
            franchisees. In addition, the Company acts as fiscal agent for the
            franchisees whereby the Company collects all revenues and pays all
            expenses and distributions. The Company also, from time to time,
            advances funds on behalf of the franchisees for the cost of
            renovations. The resulting amounts receivable from and payable to
            these franchisees are reflected in the accompanying consolidated
            balance sheet as either an asset or a liability, except for those
            joint ventures which are consolidated; those amounts are
            appropriately eliminated in consolidation. The Company also agrees
            to sponsor and manage cooperative buying groups on behalf of the
            franchisees for the purchase of inventory. The franchise agreements
            provide for fees to the Company of approximately 3% of gross sales.
            The Company is not currently offering or accepting new franchises
            other than those with joint ventures in which the Company has an
            ownership interest.

      Employment Agreements

            Chief Executive Officer

                  The Company entered into an employment agreement with the
                  Chief Executive Officer, which is renewable annually on
                  December 31. The agreement provided, among other things, for a
                  base annual salary not to exceed $150,000 and a performance
                  bonus equal to twenty percent of pre-tax net income in excess
                  of $650,000, 10% of which is to be allocated to other members
                  of management. Bonuses for fiscal years 2003, 2002 and 2001
                  amounted to approximately $156,000, $363,000 and $228,000,
                  respectively.


                                      F-23
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

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

      Management Agreement

            The Company receives an owner's fee pursuant to a management
            agreement with a company which operates a club in Atlanta, Georgia,
            owned by the Company. The management agreement, which expires in
            fiscal 2006, provided for a security deposit of $200,000, which is
            included in accounts payable and accrued expenses. The Company
            receives the greater of $150,000 or 10% of gross sales annually,
            paid monthly. In 2003, 2002 and 2001, the fee earned was $260,000,
            $251,000, and $269,000, respectively.

NOTE 10. COMMON STOCK

      Treasury Stock

            Purchase of Common Shares

                  During 2002 and 2001, the Company purchased a total of 68,803
                  and 4,000 shares of Company common stock at a total cost of
                  approximately $423,000 and $18,000 under a repurchase program
                  authorized by the Board of Directors. The Company did not
                  purchase any shares of Company common stock during 2003.

            Sale of Common Shares

                  During 2002 and 2001, the Company sold an aggregate of 72,795
                  and 70,000 shares of treasury common stock pursuant to the
                  exercise of options to certain employee/officers for a total
                  of approximately $237,000 and $131,000, respectively. During
                  2001, these employee/ officers purchased their shares, in
                  part, by means of notes of approximately $122,000, which were
                  non-interest bearing and due on demand. The notes were fully
                  repaid during August 2002. The Company did not sell any common
                  shares in 2003.

      Stock Options

            In April 2002, the Company granted options to purchase 25,500 shares
            of Company common stock to certain employees. The options vest one
            year from the grant date, have a five-year life, and an exercise
            price of $6.10 per share, the then market price of the common stock.
            At September 27, 2003, 13,350 shares remain outstanding and
            exercisable. There were no options granted during fiscal 2003.

            In April 2001, the Company granted options to purchase 57,800 shares
            of Company common stock to certain employees. The options vest one
            year from the grant date, have a five-year life, and an exercise
            price of $4.16 per share, the then market price of the common stock.
            At September 27, 2003, 24,300 shares remain outstanding and
            exercisable.


                                      F-24
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 10. COMMON STOCK (Continued)

      Stock Options (Continued)

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

            Had compensation cost for the options been determined based on the
            fair value at the grant date during fiscal years 2002 and 2001,
            consistent with SFAS 123, the Company's net income would have been
            as follows:

                                          2003           2002            2001
                                          ----           ----            ----
            Net income:
               As Reported              $888,000      $1,383,000      $1,529,000
               Pro Forma                $888,000      $1,268,000       1,450,000

            Earnings Per Share:
               Basic:
                  As Reported               $.46            $.71            $.80
                  Pro Forma                 $.46            $.65            $.76
               Diluted:
                  As Reported               $.45            $.70            $.80
                  Pro Forma                 $.45            $.64            $.75

            The Company used the Black-Scholes option-pricing model to determine
            the fair value of grants made in 2002 and 2001. The following
            assumptions were applied in determining the pro forma compensation
            cost:

                                                              2002        2001
                                                              ----        ----

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

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

                                                 2003        2002        2001
                                                 ----        ----        ----

            Outstanding at beginning of year    128,900     207,595     233,045
            Options granted                          --      25,500      57,800
            Options exercised                        --     (72,795)    (70,000)
            Options expired                      (6,240)    (31,400)    (13,250)
                                               --------    --------    --------
            Outstanding at end of year          122,660     128,900     207,595
                                               --------    --------    --------
            Exercisable at end of year          122,660     103,400     149,795
                                               ========    ========    ========


                                      F-25
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 10. COMMON STOCK (Continued)

      Stock Options (Continued)

            Weighted average option exercise price information for fiscal years
            2003, 2002 and 2001 is as follows:

                                                       2003      2002      2001
                                                       ----      ----      ----

            Outstanding at beginning of year           $4.69     $3.97     $3.27
                                                       =====     =====     =====
            Granted during the year                    $  --     $6.10     $4.16
                                                       =====     =====     =====
            Exercised during the year                  $  --     $3.25     $1.89
                                                       =====     =====     =====
            Outstanding at end of year                 $4.61     $4.69     $3.97
                                                       =====     =====     =====
            Exercisable at end of year                 $4.61     $4.34     $3.90
                                                       =====     =====     =====

      Significant options groups outstanding at September 27, 2003 and related
      weighted average price and life information are as follows:

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

            7-4-99        85,010         85,010         $4.50           .75
            4-2-01        24,300         24,300         $4.16           3.5
            4-2-02        13,350         13,350         $6.10           4.5

NOTE 11. NET INCOME PER COMMON SHARE

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

<TABLE>
<CAPTION>
                                                            2003         2002         2001
                                                            ----         ----         ----
<S>                                                       <C>          <C>          <C>
            Basic weighted average shares                 1,926,000    1,961,000    1,903,000
            Incremental shares relating to outstanding
              options                                        29,000       28,000       19,000
                                                         ----------   ----------   ----------
            Diluted weighted average shares               1,955,000    1,989,000   $1,922,000
                                                         ==========   ==========   ==========
</TABLE>


                                      F-26
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 12. RELATED PARTY TRANSACTIONS

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

      During fiscal 2003, 2002 and 2001, the Company incurred legal fees in the
      form of salary of approximately $153,000, $151,000 and $129,000,
      respectively, for services provided by a member of the Board of Directors.

      The Company paid approximately $248,000, $275,000 and $243,000 in lease
      rentals to an entity owned and controlled by a member of its Board of
      Directors and Audit Committee during fiscal years 2003, 2002 and 2001,
      respectively.

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

NOTE 13. BUSINESS SEGMENTS

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

      Information concerning the revenues and operating income for the fiscal
      years ended 2003, 2002 and 2001, 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>
                                                 2003          2002          2001
                                                 ----          ----          ----
<S>                                          <C>           <C>           <C>
            Operating Revenues:
               Restaurants                   $29,194,000   $28,619,000   $25,782,000
               Retail package stores           9,777,000     9,174,000     8,907,000
               Other revenues                  1,282,000     1,331,000     1,349,000
                                             -----------   -----------   -----------
                  Total operating revenues   $40,253,000   $39,124,000   $36,038,000
                                             ===========   ===========   ===========
</TABLE>


                                      F-27
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 13. BUSINESS SEGMENTS (Continued)

<TABLE>
<CAPTION>
                                                                 2003            2002            2001
                                                                 ----            ----            ----
<S>                                                         <C>             <C>             <C>
      Operating Income Reconciled to Income
        before Income Taxes:
            Restaurants                                     $  2,089,000    $  2,823,000    $  2,525,000
            Retail package stores                                295,000         304,000         368,000
                                                            ------------    ------------    ------------
                                                               2,384,000       3,127,000       2,893,000
            Corporate expenses, net of other revenues           (360,000)       (339,000)       (310,000)
                                                            ------------    ------------    ------------
            Operating income                                   2,024,000       2,788,000       2,583,000
            Equity in the net income of joint ventures            20,000          27,000          26,000
            Minority interest in earnings of consolidated
               joint ventures                                   (599,000)     (1,130,000)       (598,000)
            Interest expense, net of interest income             (95,000)       (115,000)       (153,000)
            Other                                                 80,000         501,000         160,000
                                                            ------------    ------------    ------------
                  Income Before Income Taxes                $  1,430,000    $  2,071,000    $  2,018,000
                                                            ============    ============    ============

      Identifiable Assets:
         Restaurants                                        $  9,513,000    $  9,013,000    $ 10,536,000
         Retail package store                                  1,958,000       1,614,000       1,943,000
                                                            ------------    ------------    ------------
                                                              11,471,000      10,627,000      12,479,000
         Corporate                                             7,262,000       6,740,000       7,187,000
                                                            ------------    ------------    ------------
      Consolidated Totals                                   $ 18,733,000    $ 17,367,000    $ 19,666,000
                                                            ============    ============    ============

      Capital Expenditures:
         Restaurants                                        $  1,794,000    $    906,000    $  2,034,000
         Retail package stores                                   434,000          41,000          34,000
                                                            ------------    ------------    ------------
                                                               2,228,000         947,000       2,068,000
         Corporate                                               800,000         269,000         492,000
                                                            ------------    ------------    ------------
      Total Capital Expenditures                            $  3,028,000    $  1,216,000    $  2,560,000
                                                            ============    ============    ============

      Depreciation and Amortization:
         Restaurants                                        $    822,000    $    799,000    $    752,000
         Retail package stores                                   116,000          77,000          89,000
                                                            ------------    ------------    ------------
                                                                 938,000         876,000         841,000
         Corporate                                               249,000         165,000         191,000
                                                            ------------    ------------    ------------
      Total Depreciation and Amortization                   $  1,187,000    $  1,041,000    $  1,032,000
                                                            ============    ============    ============
</TABLE>


                                      F-28
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 14. QUARTERLY INFORMATION (UNAUDITED)

      The following is a summary of the Company's unaudited quarterly results of
      operations for the quarters in fiscal years 2003 and 2002.

<TABLE>
<CAPTION>
                                                              Quarter Ended
                                        ----------------------------------------------------------
                                        December 28,    March 29,       June 28,     September 27,
                                            2002          2003            2003           2003
                                            ----          ----            ----           ----

<S>                                     <C>            <C>            <C>            <C>
      Revenues                          $ 9,297,000    $10,845,000    $10,588,000    $ 9,523,000
      Income from operations                835,000        706,000        367,000        116,000
      Net income (loss)                     474,000        422,000        142,000       (150,000)
      Net income (loss)per share -
        basic                                  0.25           0.22           0.07          (0.08)
      Net income per share -
        diluted                                0.24           0.21           0.07          (0.08)
      Weighted average common
         stock outstanding - basic        1,926,470      1,926,470      1,926,470      1,926,470
      Weighted average common
         stock outstanding - diluted      1,952,667      1,961,882      1,966,806      1,960,234

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

<S>                                     <C>            <C>            <C>            <C>
      Revenues                          $10,296,000    $11,024,000    $ 9,247,000    $ 8,557,000
      Income from operations                741,000      1,378,000        280,000        389,000
      Net income                            448,000        623,000        288,000         24,000*
      Net income per share - basic             0.23           0.32           0.15           0.01
      Net income per share - diluted           0.23           0.31           0.14           0.01
      Weighted average common
         stock outstanding - basic        1,924,865      1,959,869      1,972,843      1,952,916
      Weighted average common
         stock outstanding - diluted      1,941,954      1,997,433      2,013,120      1,980,589
</TABLE>

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

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


                                      F-29