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

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

For the fiscal year ended September 30, 2000
                          ------------------

                                   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.)

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


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

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


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

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

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

The  aggregate  market value of the voting stock held by  non-affiliates  of the
registrant was $3,786,000 as of November 16, 2000.

There were 1,856,478 shares of the  Registrant's  Common Stock ($0.10) Par Value
outstanding as of September 30, 2000.

<PAGE>

                       DOCUMENTS INCORPORATED BY REFERENCE

Information  contained in the  Registrant's  2001 definitive  proxy material has
been  incorporated  by  reference in Items 10, 11, 12 and 13 of Part III of this
Annual Report on Form 10-KSB.

         Exhibit Index Begins on Page 31
         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 30, 2000, the Company operated 15
units, and had interests in seven additional units which have been franchised by
the  Company.  The table  below  sets out the  changes in the type and number of
units being operated.

                                     FISCAL      FISCAL
                                      YEAR        YEAR           NOTE
TYPES OF UNITS                        2000        1999          NUMBER
--------------                        ----        ----          ------

Combination package and restaurant      4          4
Restaurant only                         6          5        (1)(2)(3)(4)(5)
Package store only                      4          4           (6)(7)(8)
Clubs                                   1          1
----------------------------------------------------------------------------
TOTAL - Company operated units         15         14

FRANCHISED - units                      7          7             (3)

Notes:
------

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

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

                                      -2-

<PAGE>


ownership of the  partnership.  The  restaurant  opened for business on April 9,
2000.

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

  (4) During the third quarter of fiscal year 2000, the Company,  as agent for a
limited partnership to be formed,  entered into an agreement for the purchase of
an existing  restaurant  location in West Miami,  Florida.  The Company plans to
file its  application  for a special use and zoning  variances  with  Miami-Dade
County,  FL during the  second  quarter of fiscal  year 2001.  Once the  limited
partnership  is formed,  with the  Company  acting as general  partner and up to
forty percent  owner of the same,  funds will be raised to renovate the business
premises for operation as a "Flanigan's  Seafood Bar and Grill" restaurant.  The
renovations  are expected to begin during the third  quarter of fiscal year 2001
and the restaurant is expected to be open for business by the end of fiscal year
2001. This restaurant is not included in the table of units.

  (5) During the fiscal year, the Company received  official  notification  from
the State of Florida,  Department of  Transportation  ("DOT"),  that the DOT was
exercising its right of eminent domain to "take" the hotel property upon which a
restaurant, operated by the Company as general partner of a limited partnership,
is  located.  It is also  anticipated  that the DOT will take title to the hotel
property  during the  fourth  quarter  of fiscal  year  2001,  at which time the
restaurant will be forced to close.

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

  (7) 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.  The
Company plans to file its  application  for a zoning  variance during the second
quarter of fiscal year 2001 and expects the package  liquor store to be open for
business during the third quarter of fiscal year 2001. This package liquor store
is not included in the table of units.

  (8) The lease for one (1)  package  liquor  store  owned and  operated  by the
Company in Lake  Worth,  Florida  expires 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 will close permanently, at the close
of business on December 31, 2000.  The net book value of the assets in the store
approximates  $35,000.  The past  five (5)  years  the  store  has  operated  at
approximately  break  even.  The  Company  does not expect the closing to have a
material impact on the Company.

                                      -3-

<PAGE>

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

   The Company was incorporated in Florida in 1959 and operated in South Florida
as a chain of small cocktail  lounges and package  liquor  stores.  By 1970, the
Company had  established  a chain of "Big  Daddy's"  lounges and package  liquor
stores between Vero Beach and Homestead, Florida. From 1970 to 1979, the Company
expanded its package liquor store and lounge operations  throughout  Florida and
opened clubs in five other "Sun Belt" states. In 1975, the Company  discontinued
most of its package  store  operations  in Florida  except in the South  Florida
areas of Dade,  Broward,  Palm Beach and Monroe  Counties.  In 1982 the  Company
expanded its club operations into the Philadelphia, Pennsylvania area as general
partner of several limited partnerships  organized by the Company. In March 1985
the Company began franchising its package liquor stores and lounges in the South
Florida  area.  See  Note 9 to the  consolidated  financial  statements  and the
discussion of franchised units on page 6.

   During fiscal year 1987, the Company began  renovating its lounges to provide
full restaurant food service, and subsequently  renovated and added food service
to most of its lounges.  The restaurant  concept,  as the Company offers it, has
been so well received by the public that food sales now represent  approximately
75% of total restaurant sales.

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

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

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

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

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

                                      -4-

<PAGE>

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

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

   As noted in Note 6 to the consolidated  financial statements,  on November 4,
1985,  the Company,  not  including any of its  subsidiaries,  filed a Voluntary
Petition in the United  States  Bankruptcy  Court for the  Southern  District of
Florida seeking to reorganize  under Chapter 11 of the Federal  Bankruptcy Code.
The  primary  purposes  of the  petition  were (1) to reject  leases  which were
significantly  above market rates and (2) to reject leases on closed units which
had been  repossessed  by, or  returned  to the  Company.  On May 5,  1987,  the
Company's  Plan of  Reorganization  as amended and modified was confirmed by the
Bankruptcy  Court.  On December 28, 1987 the Company was  officially  discharged
from  bankruptcy.  See Note 6 to the  consolidated  financial  statements  for a
discussion of the bankruptcy  proceedings to date and Item 7 for a discussion of
the effect of the bankruptcy proceedings herein.

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

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

   Financial  information  broken into these two principal industry segments for
the two fiscal years ended  September  30, 2000 and October 2, 1999 is set forth
in the  consolidated  financial  statements  which are attached  hereto,  and is
incorporated herein by reference.

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

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

   The Company's restaurants offer full food and alcoholic beverage service with
approximately  75% 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

                                      -5-

<PAGE>

conditions.  Food prices are standardized.  The restaurants'  hours of operation
are from 11:00 a.m. to 1:00-5:00  a.m. The Company  continues to develop  strong
customer  recognition  of its  "Flanigan's  Seafood  Bar and Grill"  servicemark
through very competitive pricing and efficient and friendly service.

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

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

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

   As of the end of fiscal year 2000, seven units are franchised.  Five of these
units are  franchised  to members of the family of the Chairman of the Board and
Officers or Directors. The Company has suspended its franchise plan.

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

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

                                      -6-

<PAGE>


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

   During fiscal year 1995,  the Company  completed its new franchise  agreement
for a franchisee to operate a restaurant  under the "Flanigan's  Seafood Bar and
Grill"  servicemark  pursuant to a license from the Company.  The new  franchise
agreement was drafted jointly with existing  franchisees with all  modifications
requested by the franchisees  incorporated  therein. The new franchise agreement
provides  the Company  with the ability to maintain a high level of food quality
and service at its franchised  restaurants,  which are essential to a successful
franchise  operation.  A  franchisee  is  required  to  execute a new  franchise
agreement  for the balance of the term of its lease for the  business  premises,
extended  by the  franchisee's  continued  occupancy  of the  business  premises
thereafter,  whether by lease or ownership. The new franchise agreement provides
for a royalty to the  Company in the amount of  approximately  3% of gross sales
plus a  contribution  to  advertising in an amount between 1-1/2% to 3% of gross
sales. In most cases, the Company does not sublease the business premises to the
franchisee and in those cases where it does, the Company no longer receives rent
in excess of the amount paid by the Company.

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

Investment in Joint Ventures
----------------------------

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

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

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

                                      -7-

<PAGE>


of the gross sales from the operation of the restaurant,  only while the Company
acts as general partner.  This restaurant opened in the second quarter of fiscal
year 1998.

   During the third  quarter of fiscal  year 1998,  the Company  entered  into a
lease  agreement for a restaurant in Kendall,  Florida and a separate  agreement
for the  purchase of the  furniture,  fixtures  and  equipment  of the  existing
restaurant.  The lease and  separate  agreement  were each  contingent  upon the
Company  applying for an receiving  zoning  variances  from  Miami-Dade  County,
Florida.  Although  zoning  variances  became final during the first  quarter of
fiscal  year 1999,  for  reasons  beyond the  control of the  Company,  building
permits  were not issued  until  September  1999 at which  time the  renovations
commenced. At the same time, the Company raised funds through a private offering
for a limited  partnership to be formed,  to own and renovate the restaurant for
operation of the same under the "Flanigan's Seafood Bar and Grill" servicemark.

   The Company is general partner of the limited partnership and is the owner of
forty percent of the same, as well as other related  parties,  including but not
limited to officers and directors of the Company and their families. The limited
partnership agreement will give the partnership the right to use the "Flanigan's
Seafood Bar and Grill" servicemark for a fee equal to 3% of the gross sales from
the operation of the restaurant, while the Company acts as general partner only.
The restaurant opened for business on April 9, 2000.

   During the third  quarter of fiscal  year  2000,  the  Company as agent for a
limited partnership to be formed,  entered into an agreement for the purchase of
an existing  restaurant  location in West Miami,  Florida.  The Company plans to
file its  application  for a special use and zoning  variances  from  Miami-Dade
County,  Florida during the second quarter of fiscal year 2001. Once the limited
partnership  is formed  with the  Company  as  general  partner  and up to forty
percent  owner of the  same,  funds  will be  raised to  renovate  the  business
premises for operation as a "Flanigan's Seafood Bar and Grill" restaurant. Other
related  parties,  including  but not limited to officers  and  directors of the
Company  and their  families,  are also  expected  to be limited  partners.  The
limited  partnership  agreement will give the  partnership  the right to use the
"Flanigan's  Seafood  Bar and  Grill"  servicemark  for a fee equal to 3% of the
gross sales from the  operation  of the  restaurant,  while the Company  acts as
general  partner only.  The  renovations  are expected to begin during the third
quarter of fiscal year 2001 and the  restaurant is expected to open for business
by the end of fiscal year 2001.

Clubs
-----

   As of the end of fiscal  year 2000,  the  Company  owned one club in Atlanta,
Georgia, which was operated by an unaffiliated third party, as discussed below.

                                      -8-
<PAGE>


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

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

   Pursuant to the Management  Agreement,  as modified,  the Company  receives a
monthly owner's fee of $12,500, subject to adjustment each year on or about July
1, with an  additional  owners  fee equal to 10% of the  gross  sales  exceeding
$1,500,000 for the prior 12 month period,  being due the Company.  Subsequent to
the end of fiscal year 2000, the Company  accepted the exercise of the five year
renewal option by Mardi Gras Management  upon its receipt of a security  deposit
of $175,000 and the  agreement  of Mardi Gras  Management  to pay an  additional
$25,000 within a reasonable period of time. Simultaneously,  with its acceptance
of the  exercise of the  renewal  option by Mardi Gras  Management,  the Company
exercised  its five year renewal  option under the ground lease for the business
premises.

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

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

   All of the Company's managers and salespersons  receive extensive training in
sales techniques.

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

                                      -9-

<PAGE>

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

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

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

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

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

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

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

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

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

   In the State of Florida,  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

                                      -10-

<PAGE>

in which they are issued.  The quota licenses held by the Company allow the sale
of liquor for on and off premises consumption only. In Florida, the other liquor
licenses held by the Company or limited partnerships of which the Company is the
general  partner  are  restaurant  liquor  licenses,  which  do not  have  quota
restrictions  and no purchase or resale value.  A restaurant  liquor  license is
issued to every  applicant  who  meets  all of the  state  and  local  licensing
requirements,  including, but not limited to zoning and minimum restaurant size,
seating and menu. The restaurant  liquor  licenses held by the Company allow the
sale of liquor for on premises consumption only.

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

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

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

   The Company is subject in certain states to "dram shop" or "liquor liability"
statutes,  which generally provide a person injured by an intoxicated person the
right to recover damages from an establishment  that wrongfully served alcoholic
beverages to such person.  See Item 1,  Insurance and Item 3, Legal  Proceedings
for further  discussion.  The Company maintains a continuous program of training
and surveil-lance from its corporate  headquarters to assure compliance with all
applicable liquor laws and regulations. During the fourth quarter of fiscal year
1997, the Division of Alcoholic Beverages and Tobacco (DABT), subpoenaed several
employees of the Company to inquire about three cash purchases of inventory made
in calendar years 1995 and 1996 from a distributor,  without invoices. The total
purchase   price  for  the  inventory  was  $5,100.   The  Company  was  charged
administratively  by the  DABT for  failing  to have  invoices  for  these  cash
transactions,  but during the fourth  quarter of fiscal  year 1999,  the Company
entered in a settlement  agreement  with the DABT and paid a fine of $4,000.  At
its meeting on  September  4,  1997,the  Board of  Directors  was advised of the
investigation  by the  DABT and  unanimously  passed  a  resolution

                                      -11-

<PAGE>

prohibiting  management  from  purch-asing  inventory  without an invoice and in
cash.  Otherwise,  during the fiscal years ended October 2, 1999,  and September
30, 2000, and through the present time, no significant pending matters have been
initiated by the DABT  concerning  any of the Company's  licenses which might be
expected  to result in a  revocation  of a liquor  license or other  significant
actions against the Company.

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

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

Insurance
---------

   The  Company  has  general   liability   insurance   which   incorporates   a
semi-self-insured  plan under  which the  Company  assumes  the full risk of the
first $50,000 of exposure per  occurrence.  The Company's  insurance  carrier is
responsible  for  $1,000,000   coverage  per  occurrence   above  the  Company's
self-insured  deductible,  up to a maximum  aggregate  of  $2,000,000  per year.
During the fiscal  year,  the  Company  was able to  purchase  excess  liability
insurance  at a  reasonable  premium,  whereby the  Company's  excess  insurance
carrier is  responsible  for  $4,000,000  coverage  above the Company's  primary
general  liability  insurance  coverage.  The Company is self-  insured  against
liability claims in excess of $5,000,000.

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

   An accrual for the  Company's  estimated  liability  on  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

                                      -12-

<PAGE>

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 30, 2000 the Company owned and operated six
restaurants,  all of which had  formerly  been  lounges  and were  renovated  to
provide  full food  service.  These  restaurants  compete  directly  with  other
restaurants   serving  liquor  in  the  area.  The  Company's   restaurants  are
competitive due to four factors; product quality, portion size, moderate pricing
and a  standardization  throughout the Company owned restaurants and most of the
franchises.

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

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

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

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

                                      -13-

<PAGE>

Employees
---------

   As of year  end,  the  Company  employed  342  employees,  of which  267 were
full-time  and 75 were  part-time.  Of these,  26 were employed at the corporate
offices. Of the remaining  employees,  32 were employed in package liquor stores
and 284 in restaurants.

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

<TABLE>
<CAPTION>

                      EXECUTIVE OFFICERS OF THE REGISTRANT

                              Positions and Offices                                  Office or Position
      Name                       Currently Held                         Age              Held Since
      ----                       --------------                         ---              ----------
<S>                           <C>                                       <C>                 <C>
Joseph G. Flanigan            Chairman of the Board                      71                 1959
                              of Directors, Chief
                              Executive Officer and
                              President

William Patton                Vice President                             77                 1975
                              Community Relations

Edward A. Doxey               Chief Financial Officer and Secretary      59                 1992

Jeffrey D. Kastner            Assistant Secretary                        47                 1995
</TABLE>


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

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

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

                                      -14-

<PAGE>


   All of the Company's units require  periodic  refurbishing in order to remain
competitive.  The Company has budgeted $500,000 for its refurbishing program for
fiscal year 2001 which includes  expenditures  in order to bring the stores into
compliance  with  ADA.  See  Item  7,  "Liquidity  and  Capital  Resources"  for
discussion of the amounts spent in fiscal year 2000.

   The following table  summarizes the Company's  properties as of September 30,
2000 including franchise locations, a club and Company managed locations.

<TABLE>
<CAPTION>
                                                      Square      License               Lease
     Name and Location                    Footage     Seats       Owned by              Terms
     -----------------                    -------     -----       --------              -----
<S>                                       <C>         <C>         <C>              <C>
Big Daddy's Liquors #8                    1,800        N/A        Company          5/1/99 to 4/30/14
Flanigan's Enterprises, Inc.
959 State Road 84
Fort Lauderdale, FL

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

Hialeah, FL

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

Flanigan's Legends                        5,000        180        Franchise        11/15/92 to 11/15/02
Seafood Bar and Grill                                                              Option to 11/15/12
#12 Galeon Tavern, Inc. (3)
2401 Tenth Ave. North
Lake Worth, FL

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

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

Piranha Pats II-#15                       4,000        90         Joint            3/2/76 to 8/31/01
CIC Investors #15 Ltd. (3) (5)                                    Venture/         Options to 8/31/11
1479 E. Commercial Blvd.                                          Franchise
Ft. Lauderdale, 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                       4,300        100         Franchise        2/15/72 to 12/31/05
Bar and Grill #18                                                                  Option to 12/31/10
Twenty Seven Birds Corp.
(2)(3)(5)

2721 Bird Avenue
Miami, FL

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

Flanigan's Seafood                       5,100        140         Company          7/15/68 to 12/31/01
Bar and Grill #20                                                                  Options to 12/31/05
Flanigan's Enterprises                                                             Additional Lease
Inc.  (2)                                                                          5/1/69 to 12/31/01
13205 Biscayne Blvd.                                                               Options to 12/31/05
North Miami, FL

Flanigan's Seafood                       4,100        200         Company          12/16/68 to 12/31/05
Bar and Grill #22                                                                  Option to 12/31/10
Flanigan's Enterprises
Inc. (2)(4)
2600 W. Davie Blvd.
Ft. Lauderdale, FL

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

Flanigan's Seafood                       4,600        150         Company          9/6/68 to 12/31/05
Bar and Grill #31                                                                  Option to 12/31/10
Flanigan's Enterprises
Inc. (2)
4 N. Federal Highway
Hallandale, FL

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

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

                                      -16-

<PAGE>

<TABLE>
<CAPTION>
                                                      Square      License               Lease
    Name and Location                    Footage      Seats       Owned by              Terms
    -----------------                    -------      -----       --------              -----
<S>                                       <C>         <C>         <C>              <C>
Big Daddy's Liquors                       4,600        N/A        Company          3/10/87 to 12/31/00
#36, Flanigan's                                                                    Additional Lease
Enterprises, Inc. (2)(11)                                                          4/29/87 to 12/31/00
102 N. Dixie Highway                                                               Option to 12/31/05
Lake Worth, FL

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

Piranha Pat's #43                         4,500        90         Franchise        12/1/72 to 11/30/02
BD 43 Corporation (2)(3)(5)                                                        Option to 11/30/12
2500 E. Atlantic Blvd.
Pompano Beach, FL

Big Daddy's Liquors                       6,000        N/A        Company          12/21/68 to 1/1/10
#47, Flanigan's                                                                    Options to 1/1/60
Enterprises, Inc. (6)(8)
8600 Biscayne Blvd.
Miami, FL

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

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

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

(1) License subject to chattel mortgage.

(2) License pledged to secure lease rental.

(3) Franchised by Company.

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

(5) Lease assigned to franchisee.

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

                                      -17-

<PAGE>

(7) Location managed by an unaffiliated third party.

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

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

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

(11) Lease expires December 31, 2000 and the Company elected not to exercise the
     final five year renewal option.

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, the Company was able
to purchase  excess  liability  insurance,  at a reasonable  premium whereby the
Company's excess insurance carrier is responsible for $4,000,000  coverage above
the Company's primary general liability insurance coverage.  Certain states have
liquor  liability (dram shop) laws which allow a person injured by an "obviously
intoxicated  person" to bring a civil suit against the business (or social host)
who  had  served  intoxicating  liquors  to an  already  "obviously  intoxicated
person".  The Company's  insurance coverage relating to this type of incident is
limited.

   Dram shop claims normally involve traffic accidents and the Company generally
does not learn of dram  shop  claims  until  after a claim is filed and then the
Company vigorously defends these claims on the grounds that its employee did not
serve an  "obviously  intoxicated  person".  Damages in most dram shop cases are
substantial.  At the present time,  there are no dram shop cases pending against
the  Company.  The  Company has in place  insurance  coverage to protect it from
losses, if any.

   On November 4, 1985 the Company,  not  including  its  subsidiaries,  filed a
Voluntary  Petition  in the  United  States  Bankruptcy  Court for the  Southern
District  of  Florida  seeking to  reorganize  under  Chapter 11 of the  Federal
Bankruptcy Code. The Petition, identified as case no. 85-02594-BKC-AJC was filed
in Fort Lauderdale,  Florida.  By Order

                                      -18-

<PAGE>

of the Court dated  November  4, 1985,  the  Company  was  appointed  "debtor in
possession".

  The  Company's  action  was a result  of  significant  escalations  of rent on
certain of the Company's  leases which made continued  profitable  operations at
those locations impossible and jeopardized the Company's financial position. The
major purpose of the reorganization was to reject such leases.

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

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

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

   Pursuant to the terms of the Amended Plan of  Reorganization,  the  Effective
Date of the same  was June 30,  1987.  As of that  date,  confirmation  payments
totaling  $1,171,925 were made by the Company's  Disbursing  Agent with $647,226
being retained in escrow for disputed

                                      -19-

<PAGE>

claims ($1,819,151  total). The Bankruptcy Court ratified the disbursements made
by the Disbursing Agent by its Order dated December 21, 1987.

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

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

  During the fiscal year 2000,  the Company was served with  several  complaints
alleging  violations of the Americans with Disabilities Act, ("ADA"),  at all of
its  locations.  The  lawsuits  included  the  restaurants  owned by the limited
partnerships  and  franchises.  The  sudden  influx  of  lawsuits  alleging  ADA
violations was due to the fact that it is likely that the ADA will be amended to
include a provision requiring plaintiffs to provide the potential defendant with
90 days notice of ADA  violations  prior to filing  suit,  during which time the
violations may be corrected.  As of now, 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. The Company has retained an ADA expert.
who is in the  process  of  inspecting  all  locations,  including  the  limited
partnerships  and  franchises,  and will  provide  a report  setting  forth  ADA
violations which need to be corrected. It is the Company's intent to correct all
ADA violations  noted by its ADA expert and then vigorously  defend the lawsuits
arguing  that all  locations  are in  compliance.  The cost to  correct  the ADA
violations is included in the budget for capital improvements during fiscal year
2000-2001.

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

   During the fourth  quarter of fiscal year 2000 the Company did not submit any
matter to a vote of the security holders

                                      -20-

<PAGE>

                                     PART II

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

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

                          Fiscal 2000              Fiscal 1999
                          -----------              -----------

                         High      Low            High      Low

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

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

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

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

Item 6. Selected Financial Data.

Not required

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

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

General
-------

     As of September 30, 2000,  the Company was  operating  fifteen  units.  The
     Company  had  interests  in  an  additional  seven  units  which  had  been
     franchised by the Company. Of the units operated by the Company,  four were
     combination package liquor stores and restaurant, six were restaurants only
     and four were package liquor stores only. There was one club operated by an
     unaffiliated third party under a management  agreement.  During fiscal year
     1999, one  restaurant  only was closed with the expiration of its lease and
     the liquor license and some of the  furniture,  fixtures and equipment were
     sold to an unaffiliated third party. The closing of the restaurant resulted
     in a $51,000  loss to the  Company.  During  fiscal  year 1999 the  Company
     opened one  package  liquor  store only in Fort  Lauderdale,  Florida,  and
     purchased the Management Agreement of a franchise, which includes the right
     to manage the  franchised  restaurant  only.  During fiscal year 2000,  one
     restaurant only,  owned by a limited

                                      -21-

<PAGE>

     partnership  of which the Company acts as general  partner,  was opened for
     business.

REVENUES (in thousands):
                                  Fifty Two             Fifty Two
                                 Weeks Ended           Weeks Ended
Sales                           Sept. 30, 2000         Oct. 2, 1999
-----                           --------------         ------------
Restaurant, food              $  11,485  49.5%       $ 10,708  51.8%
Restaurant, bar                   2,859  12.3%          2,722  13.2%
Package goods                     8,870  38.2%          7,255  35.0%
                                 ------ -----           ----- -----
 Total                           23,214 100.0%         20,685 100.0%

Franchise revenues                1,065                   894
Owners fee                          261                   230
Joint venture income                460                   341
Other operating income              160                   165
                                 ------                ------
Total Revenues                $  25,160              $ 22,315

   As the table above illustrates,  total revenues have increased for the fiscal
year ended  September 30, 2000 when compared to the fiscal year ended October 2,
1999.

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

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

   During the second  quarter of fiscal year 1999,  the Company formed a limited
partnership to renovate and operate a restaurant  under the "Flanigan's  Seafood
Bar and Grill"  servicemark in Kendall,  Florida,  as general  partner and forty
percent  owner of the same.  Due to the  difficulties  in obtaining the required
permits  to  begin  construction  which  were  beyond  control  of the  Company,
construction  began in the first quarter of fiscal year 2000 and the  restaurant
opened for business  during the third  quarter of fiscal year 2000.  The Company
reported  income of $17,000  for the fiscal  year ended  September  30,  2000 as
compared to the recognition of a $106,000 loss for the fiscal year ended October
2, 1999.  The loss was  attributed  to  pre-opening  costs and  expenditures  of
certain  intangible  costs as required by  SOP-98-5,  "reporting  on the cost of
start-up activities".

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

                                      -22-

<PAGE>

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

   During the third  quarter of fiscal year 2000,  the  Company,  as agent for a
limited partnership to be formed,  entered into an agreement for the purchase of
an  existing  restaurant  location  in  West  Miami,  Florida.  The  Company  is
completing  its  application  for  a  special  use  and  zoning  variances  from
Miami-Dade County, Florida and expects to file its application during the second
quarter of fiscal year 2001.

  Restaurant  food sales  represented  49.5% of total  sales in the fiscal  year
ended  September  30, 2000 as compared to 51.8% in the fiscal year ended October
2, 1999. The weekly average of same store restaurant food sales was $220,859 and
$198,057 for the fiscal year ended  September 30, 2000 and the fiscal year ended
October 2, 1999 respectively, an increase of 11.5%.

   Restaurant  bar sales  represented  12.3% of total  sales in the fiscal  year
ended  September  30, 2000 as compared to 13.2% in the fiscal year ended October
2, 1999. The weekly  average of same store  restaurant bar sales was $54,981 and
$50,226 for the fiscal year ended  September  30, 2000 and the fiscal year ended
October 2, 1999 respectively, an increase of 9.5%.

   Package  store  sales with same store  weekly  sales  averaged  $147,923  and
$133,173 for the fiscal year ended  September 30, 2000 and the fiscal year ended
October 2, 1999 respectively, an increase of 11.1%.

   Franchise revenue increased to $1,065,000 for the fiscal year ended September
30, 2000 as compared to $894,000 for the fiscal year ended October 2, 1999.  The
increase in franchise revenue resulted from higher sales for the franchises, and
the opening of an additional joint venture  restaurant  during the third quarter
of the fiscal year ended September 30, 2000.

   Owner's fee represents fees received pursuant to a Management  Agreement from
the operation of a club owned by the Company in Atlanta, Georgia. The Management
Agreement was amended effective July 1, 1996,  whereby the Company also receives
ten percent of sales exceeding  $1,500,000 per annum as additional owner's fees.
Income from this club was $261,000 for the fiscal year ended  September 30, 2000
as compared to $230,000 for the fiscal year ended October 2, 1999.

   The gross  profit  margin for  restaurant  sales were 63.9% and 64.2% for the
fiscal years 2000 and 1999 respectively.

   The gross profit margin for package goods sales were 26.4% and 26.6%, for the
fiscal years 2000 and 1999 respectively.

                                      -23-

<PAGE>

   Overall gross profits were 49.5% and 50.7% for the fiscal years 2000 and 1999
respectively.

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

   Operating  costs and  expenses for the fiscal year ended  September  30, 2000
were  $23,380,000  compared to $20,772,000  for the fiscal year October 2, 1999.
Operating  expenses are comprised of the cost of merchandise  sold,  payroll and
related costs, occupancy costs and selling, general and administrative expenses.

   Payroll  and related  costs  which  include  workers  compensation  insurance
premiums  were  $6,724,000  and  $6,135,000  for  fiscal  years  2000 and  1999,
respectively.  The 9.6 % increase is attributed to increases in salaries paid to
all employees in order to recruit and maintain  competent  individuals in a very
competitive labor market.

   Occupancy costs,  which include rent,  common area  maintenance,  repairs and
taxes  were   $1,050,000   and   $1,033,000  for  fiscal  years  2000  and  1999
respectively.  The 1.6%  increase  was  attributable  to  increases  in property
maintenance.

   Selling,  general and administrative  expenses were $3,889,000 for the fiscal
year ended  September 30, 2000 and  $3,410,000 for the fiscal year ended October
2, 1999.  The net  increase  of 13.9% in  selling,  general  and  administrative
expenses is due to a general increase in prices.

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

   Other  income and  expense  were a loss of $75,000  for the fiscal year ended
September 30, 2000 as compared with income of $232,000 for the fiscal year ended
October 2, 1999.

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

  During  fiscal  year 2000 the  Company's  interest  expense  was  $177,000  as
compared with $148,000 for the fiscal year ended October 2, 1999.

   The category "Other, net" was $44,000 for the fiscal year ended September 30,
2000 and $325,000 for the fiscal year ended October 2, 1999.  Other,  net in the
consolidated statements of income consists of the following for the fiscal years
ended September 30, 2000 and October 2, 1999:

                                      -24-

<PAGE>


                                               Fiscal
                                             Years Ended
                                         -------------------
                                           2000       1999
                                         ========   ========
Non-franchise related rental income     $ 31,000    $ 36,000
Loss on retirement of fixed assets          -        (66,000)
Insurance recovery & reserve reduction       -       275,000
Gain on sale of liquor license             8,000      30,000
Miscellaneous                              5,000      50,000
                                         -------     -------
Other Net                              $  44,000   $ 325,000
                                         ========    =======

Trends
------

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

  The Company utilized the balance of its net operating loss carryforward during
fiscal year 2000.  The  provision  for income taxes was $341,000 for fiscal year
ended  September  30, 2000 as compared with a benefit of $593,000 for the fiscal
year ended October 2, 1999 due the recognition of the deferred tax asset and the
utilization of the net operating loss carryforward.

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

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

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

   The following  table is a summary of the Company's  cash flows for the fiscal
years ended September 30, 2000 and October 2, 1999:

                                                   Fiscal
                                                 Years Ended
                                              ----------------
                                              2000        1999
                                              ----        ----
                                                 (in thousands)

Net cash provided by operating activities    $   558    $ 2,652

Net cash used in investing activities         (1,412)    (1,032)

Net cash used in financing activities           (159)    (1,336)
                                              -------    -------

Net increase (decrease) in cash
and equivalents                               (1,013)       284

Cash and equivalents, beginning of year        1,752      1,468
                                              ------      -----

Cash and equivalents, end of year            $   739    $ 1,752
                                              ======     ======

                                      -25-

<PAGE>

The Year 2000 Issue
-------------------

   The Company completed the installation of a Great Plains  Accounting  Package
in fiscal  year 1999 to address the year 2000 issue at a cost of  $152,000.  The
system is fully  operational  and is year 2000 compliant.  The Company  incurred
consultants  fees, in the amount of $113,000,  which were expensed during fiscal
year 1999, and $46,000 which were expensed during fiscal year 2000.

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

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

   Capital  expenditures  were  $1,945,000 and $934,000 during fiscal years 2000
and 1999, respectively.  The capital expenditures for both fiscal years were for
upgrading existing units serving food, improvements to package liquor stores and
the replacement of the corporate  computer system.  The fiscal year 2000 capital
expenditures  included the  purchase of an office  building  for  $850,000.  The
corporate offices will be located in the building.

   All of the Company's units require  periodic  refurbishing in order to remain
competitive . During fiscal 1992, as cash flow improved, the Company embarked on
a refurbishing  program which continued through fiscal year 2000. The budget for
fiscal  year  2001  includes  approximately  $500,000  for this  purpose  and an
additional $250,000 for renovations to the office building.  The Company expects
the funds for these improvements to be provided from operations.

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

   The  Company  purchased  an office  building  for  $850,000  during the first
quarter of 2000.  As the end of fiscal year 2000,  the Company had not  received
the required building permits to begin renovations to the building.  The Company
estimates  the permits  will be issued  during the first  quarter of fiscal year
2001 and the cost of the  renovations  will  approximate  $250,000.  The Company
expects that the funds for these improvements will be provided from operations.

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

   In order to ensure that the Company had adequate cash reserves in view of its
investment  in joint  ventures,  and for other  improvements,  during the second
quarter of fiscal year 1997,  the Board of Directors  authorized  the Company to
borrow up to $1,200,000  at an interest  rate of twelve  percent (12%) per annum
and fully  amortized  over five (5) years.  During the fourth  quarter of fiscal
year 1997, the Company  borrowed  $375,000 from  investors,  in units of $5,000,
which loan is fully secured with specific receivables owned by the Company.

                                      -26-

<PAGE>


   During the first quarter of fiscal year 1998,  the Company closed on its loan
from Bank of America  (formerly  Barnett Bank and Nations Bank) in the principal
amount of  $500,000  with  interest  at prime rate.  Equal  quarterly  principal
payments began March 31, 1998 with interest payable monthly. The Company prepaid
the loan in full during the third quarter of fiscal year 1999.

   The  Company  closed on its  $1,000,000  loan with Bank of America  (formerly
Nations Bank) during the second quarter of fiscal year 2000. The promissory note
earns  interest  at prime rate,  payable  monthly on the  outstanding  principal
balance,  with quarterly payments of principal commencing at the rate of $50,000
per quarter  for 8  quarters,  and then at the rate of $75,000 per quarter for 8
quarters,  at which  time any  outstanding  principal  balance  and all  accrued
interest  shall be due in full.  The  promissory  note is  secured by a security
interest in all assets of the Company,  including the office building  purchased
by the  Company.  The  promissory  note may be paid at any time,  in whole or in
part, with any prepayments applying against the quarterly payment or payments of
principal next due.

   The  Company  repaid  long term  debt,  including  the Bank of  America  note
payable,  capital lease  obligations  and Chapter 11  bankruptcy  damages in the
amount of $421,000 and $807,000 in fiscal years 2000 and 1999 respectively.

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

   The table  below  summarizes  the current  assets,  current  liabilities  and
working capital for the fiscal years 2000 and 1999:

                                     Sept. 30         Oct. 2
Item                                   2000            1999
----                                 --------         ------
Current assets                     $ 3,419,000    $ 4,075,000
Current liabilities                  2,136,000      2,693,000
Working capital                      1,283,000      1,382,000

   Management  believes that positive cash flow from  operations will adequately
fund operations, debt reductions and planned capital expenditures in fiscal year
2001.

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

   Financial Accounting Standards Board Statement No. 109, Accounting for Income
Taxes requires, among other things,  recognition of future tax benefits measured
at enacted  rates  attributable  to  deductible  temporary  differences  between
financial  statement and income tax bases of assets and  liabilities  and to tax
net operating loss carryforwards to the extent that realization of said benefits
is more likely than not. For  discussion  regarding  the Company's net operating
loss carryforwards refer to Note 7 to the consolidated  financial statements for
fiscal year ended September 30, 2000.

                                      -27-

<PAGE>

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

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

   During fiscal year 1986 the Company terminated or rejected 34 leases. Many of
the leases remaining were  renegotiated to five year terms, with three five year
renewal  options at fair market rental.  As was their right under the Bankruptcy
Code,  the  landlords  of  properties  rejected by the Company  filed claims for
losses or  damages  sustained  as a result of the  Company's  rejection  of such
leases.  The amount of such  damages is limited  by  federal  law.  The  Company
outlined a schedule for payment of these  damages in the Amended  Plan. As noted
above, the Amended Plan was approved in the Bankruptcy Court on May 5, 1987. The
gross  amount of  damages  payable  to  creditors  for the  rejected  leases was
$4,278,000. Since the damage payments were to be made over nine years, the total
amount due was  discounted  at a rate of 9.25%.  See Note 6 to the  consolidated
financial statements for the current payment schedule of these damages.

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

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

   During the fiscal year, the Company received  official  notification from the
State of Florida, Department of Transportation, ("DOT"), that DOT was exercising
ifs  right  of  eminent  domain  to  "take"  the  hotel  property  upon  which a
restaurant,  operated by the Company as general partner of a limited partnership
is located.  The DOT made its initial  offer for the property  approximately  60
days ago and it is anticipated that suit for eminent domain will be filed at any
time, with the DOT depositing funds  representing its offer into the Registry of
the Court.  If an agreement is not reached over the value of the property taken,
the value is decided  by the court.  A dispute  has also  arisen  with the hotel
owner over the limited  partnership's  right to  participate in an award paid by
DOT. It is the Company's  position that the limited  partnership  has possessory
rights to the restaurant property,  which entitles it to substantial damages. If
an agreement is not reached with the hotel owner upon an equitable  distribution
of the condemnation award, the issue will also be decided by the court.  Eminent
domain cases are heard by the court on an expedited basis,  moving to the top of
the jury calendar.  It is also  anticipated  that the DOT will take title to the
hotel property  during the fourth quarter of fiscal year 2001, at which time the
restaurant will be forced to close.

                                      -28-

<PAGE>


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

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

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

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

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

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

   None

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

   Financial  statements  of the  Company at  September  30, 2000 and October 2,
1999, which include each of the two years in the period ended September 30, 2000
and the independent  certified public accountants' report thereon,  are included
herein.

Item 9. Change in Certifying Accountant.
----------------------------------------

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

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

   AA audited the Company's annual consolidated  financial  statements as of and
for each of the fiscal years from the date of the Company's  initial offering in
1969  through  the fiscal  year ended  October 3, 1998,  ("Historical  Financial
Statements").  AA's  auditors  reports  for

                                      -29-

<PAGE>

at least the past seven (7) years on these Historical  Financial  Statements did
not contain any adverse  opinion or disclaimer of opinion and were not qualified
or modified as to uncertainty, audit scope or accounting principles.

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

                                    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  2001  Annual   Meeting  of
Shareholders,  to be filed with the Securities and Exchange  Commission pursuant
to regulation 14A under the Securities and Exchange Act of 1934, as amended (the
2001 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 2001  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 2001 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  2001  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 2000 or subsequent to year end.

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

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

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

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

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

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

(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).

                                      -31-

<PAGE>

(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 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)

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

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

                                      -32-

<PAGE>

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

                                   SIGNATURES
                                   ----------

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

                            Flanigan's Enterprises, Inc.
                            Registrant

                            By: JOSEPH G. FLANIGAN  Date:  12/29/00
                                ------------------         --------
                                Chief Executive Officer

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

JOSEPH G. FLANIGAN      Chairman of the Board,        Date:  12/29/00
------------------      Chief Executor Officer,              --------
Joseph G. Flanigan      and President


EDWARD A. DOXEY         Chief Financial Officer       Date:  12/29/00
---------------         Secretary and Director               --------
Edward A. Doxey

CHARLES KUHN            Director                      Date:  12/29/00
------------                                                 --------
Charles Kuhn

GERMAINE M. BELL        Director                      Date:  12/29/00
----------------                                             --------
Germaine M. Bell

CHARLES E. MCMANUS      Director                      Date:  12/29/00
------------------                                           --------
Charles E. McManus

JEFFREY D. KASTNER      Assistant Secretary           Date:  12/29/00
------------------      and Director                         --------
Jeffrey D. Kastner

WILLIAM PATTON          Vice President, Public        Date:  12/29/00
--------------          Relations and Director               --------
William Patton

JAMES G. FLANIGAN       Director                      Date:  12/29/00
-----------------                                            --------
James G. Flanigan

PATRICK J. FLANIGAN     Director                      Date:  12/29/00
-------------------                                          --------
Patrick J. Flanigan

                                      -33-

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

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


                                                                PAGE
                                                                ----


REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS               F-1

CONSOLIDATED FINANCIAL STATEMENTS

   Balance Sheet                                                 F-2

   Statements of Income                                          F-3

   Statements of Stockholders' Equity                            F-4

   Statements of Cash Flows                                    F-5-F-6

   Notes to Financial Statements                               F-7-F-23


<PAGE>

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

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


We have  audited  the  accompanying  consolidated  balance  sheet of  Flanigan's
Enterprises,  Inc. and  Subsidiaries  as of September 30, 2000,  and the related
consolidated  statements of income,  stockholders' equity and cash flows for the
two  years  then  ended.  These  consolidated   financial   statements  are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our 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  30,  2000,  and  the
consolidated  results of their operations and their cash flows for the two years
then ended in conformity with generally accepted accounting principles.


                            RACHLIN COHEN & HOLTZ LLP


Fort Lauderdale, Florida
November 22, 2000

                                      F-1

<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET

                               SEPTEMBER 30, 2000


                                      ASSETS
                                      ------

<TABLE>
<CAPTION>

Current Assets:
<S>                                                                        <C>
    Cash and cash equivalents                                              $    739,000
    Notes and mortgages receivable, current maturities, net                     119,000
    Due from franchisees                                                        186,000
    Other receivables                                                           264,000
    Inventories                                                               1,382,000
    Prepaid expenses                                                            318,000
    Deferred tax assets                                                         411,000
                                                                           ------------
      Total current assets                                                    3,419,000
                                                                           ------------

Property and Equipment                                                        5,317,000
                                                                           ------------

Leased Property Under Capital Leases, Net                                        60,000
                                                                           ------------

Other Assets:
    Liquor licenses, net                                                        271,000
    Notes and mortgages receivable, net                                         147,000
    Investments in joint ventures                                             1,530,000
    Deferred tax assets                                                         251,000
    Other                                                                       214,000
                                                                           ------------
         Total other assets                                                   2,413,000
                                                                           ------------
         Total assets                                                      $ 11,209,000
                                                                           ============


                       LIABILITIES AND STOCKHOLDERS' EQUITY
                       ------------------------------------

Current Liabilities:
    Accounts payable and accrued expenses                                  $  1,514,000
    Current portion of long-term debt                                           295,000
    Current obligations under capital leases                                     38,000
    Current portion of damages payable on terminated or rejected leases         289,000
                                                                           ------------
         Total current liabilities                                            2,136,000
                                                                           ------------

Long-Term Debt, Net of Current Maturities                                     1,160,000
                                                                           ------------

Obligations Under Capital Leases, Net of Current Portion                        135,000
                                                                           ------------

Damages Payable on Terminated or Rejected Leases, Net of Current Portion        111,000
                                                                           ------------

Commitments, Contingencies, Other Matters and Subsequent Event                     --

Stockholders' Equity:
    Common stock, $.10 par value; 5,000,000 shares authorized;
      4,197,642 shares issued                                                   420,000
    Capital in excess of par value                                            6,052,000
    Retained earnings                                                         6,565,000
    Notes receivable on sale of common stock                                   (181,000)
    Treasury stock, at cost, 2,341,164 shares                                (5,189,000)
                                                                           ------------
         Total stockholders' equity                                           7,667,000
                                                                           ------------
         Total liabilities and stockholders' equity                        $ 11,209,000
                                                                           ============
</TABLE>


                See notes to consolidated financial statements.

                                      F-2
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                        CONSOLIDATED STATEMENTS OF INCOME

               YEARS ENDED SEPTEMBER 30, 2000 AND OCTOBER 2, 1999


<TABLE>
<CAPTION>
                                                                  2000            1999
                                                                  ----            ----

Revenues:
<S>                                                          <C>             <C>
    Restaurant food sales                                    $ 11,485,000    $ 10,708,000
    Restaurant beverage sales                                   2,859,000       2,722,000
    Package goods sales                                         8,870,000       7,255,000
    Franchise-related revenues                                  1,065,000         894,000
    Owner's fee                                                   261,000         230,000
    Joint venture income                                          460,000         341,000
    Other operating income                                        160,000         165,000
                                                             ------------    ------------
                                                               25,160,000      22,315,000
Costs and Expenses:
    Cost of merchandise sold:
      Restaurants and lounges                                   5,185,000       4,871,000
      Package goods                                             6,532,000       5,323,000
    Payroll and related costs                                   6,724,000       6,135,000
    Occupancy costs                                             1,050,000       1,033,000
    Selling, general and administrative expenses                3,889,000       3,410,000
                                                             ------------    ------------
                                                               23,380,000      20,772,000

Income from Operations                                          1,780,000       1,543,000
                                                             ------------    ------------

Other Income (Expense):
    Interest expense on obligations under capital leases          (46,000)        (34,000)
    Interest expense on long-term debt and damages payable       (131,000)       (114,000)
    Interest income                                                54,000          52,000
    Recognition of deferred gains                                   4,000           3,000
    Other (Note 14)                                                44,000         325,000
                                                             ------------    ------------
                                                                  (75,000)        232,000

Income Before Provision for Income Taxes                        1,705,000       1,775,000
                                                             ------------    ------------

Provision (Benefit) for Income Taxes (Note 7):
    Current                                                       373,000          37,000
    Deferred                                                      (32,000)       (630,000)
                                                             ------------    ------------
                                                                  341,000        (593,000)
                                                             ------------    ------------

Net Income                                                   $  1,364,000    $  2,368,000
                                                             ============    ============

Net Income Per Common Share:
    Basic                                                    $       0.73    $       1.21
                                                             ============    ============
    Diluted                                                  $       0.71    $       1.15
                                                             ============    ============

Weighted Average Shares and Equivalent Shares Outstanding:
    Basic                                                       1,856,000       1,957,000
                                                             ============    ============
    Diluted                                                     1,931,000       2,062,000
                                                             ============    ============
</TABLE>

                  See notes consolidated financial statements.

                                      F-3
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

               YEARS ENDED SEPTEMBER 30, 2000 AND OCTOBER 2, 1999

<TABLE>
<CAPTION>
                                                                                                                    Notes
                                                             Common Stock                                        Receivable
                                                             ------------          Capital in                    on Sale of
                                                                                   Excess of       Retained        Common
                                                         Shares        Amount      Par Value       Earnings         Stock
                                                         ------        ------      ---------       --------         -----
<S>                                                    <C>         <C>           <C>            <C>            <C>
Balance, October 3, 1998                               4,197,642   $   420,000   $ 6,185,000    $ 3,234,000    $      --

Year Ended October 2, 1999:
    Dividends paid ($0.10 per share)                        --            --            --         (186,000)          --
    Net income                                              --            --            --        2,368,000           --
    Purchase of treasury stock                              --            --            --             --             --
    Common stock issued in exchange for
      notes receivable                                      --            --          61,000           --         (198,000)
    Exchange of shares - exercise of stock options          --            --        (188,000)          --             --
    Payments received on notes receivable                   --            --            --             --            6,000
                                                     -----------   -----------   -----------    -----------    -----------

Balance, October 2, 1999                               4,197,642       420,000     6,058,000      5,416,000       (192,000)

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

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

<CAPTION>

                                                            Treasury Stock
                                                            --------------

                                                         Shares         Amount         Total
                                                         ------         ------         -----
<S>                                                    <C>          <C>            <C>
Balance, October 3, 1998                               2,339,442    $(4,734,000)   $ 5,105,000

Year Ended October 2, 1999:
    Dividends paid ($0.10 per share)                        --             --         (186,000)
    Net income                                              --             --        2,368,000
    Purchase of treasury stock                            68,700       (313,000)      (313,000)
    Common stock issued in exchange for
      notes receivable                                   (68,000)       137,000           --
    Exchange of shares - exercise of stock options       (92,949)       188,000           --
    Payments received on notes receivable                   --             --            6,000
                                                     -----------    -----------    -----------

Balance, October 2, 1999                               2,247,193     (4,722,000)     6,980,000

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

Balance, September 30, 2000                            2,341,164    $(5,189,000)   $ 7,667,000
                                                     ===========    ===========    ===========
</TABLE>


                See notes to consolidated financial statements.


                                      F-4
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

               YEARS ENDED SEPTEMBER 30, 2000 AND OCTOBER 2, 1999

<TABLE>
<CAPTION>
                                                                                 2000           1999
                                                                                 ----           ----
Cash Flows from Operating Activities:
<S>                                                                          <C>            <C>
    Net income                                                               $ 1,364,000    $ 2,368,000
    Adjustments to reconcile net income to net cash provided by
      operating activities:
        Depreciation and amortization                                            681,000        637,000
        Deferred income taxes benefit                                            (32,000)      (630,000)
        Recognition of deferred gains and other deferred income                   (4,000)        (3,000)
        (Gain) loss on disposal of property, equipment and liquor licenses        (8,000)        36,000
        Joint venture income                                                    (460,000)      (341,000)
        Changes in operating assets and liabilities:
          (Increase) decrease in:
             Other receivables                                                  (144,000)       208,000
             Inventories                                                          46,000       (191,000)
             Prepaid expenses                                                     84,000         29,000
             Other assets                                                         (4,000)      (152,000)
          Increase (decrease) in:
             Accounts payable and accrued expenses                               (80,000)        (8,000)
             Due to franchisees                                                 (885,000)       699,000
                                                                             -----------    -----------
               Net cash provided by operating activities                         558,000      2,652,000
                                                                             -----------    -----------

Cash Flows from Investing Activities:
    Collections on notes and mortgages receivable                                 36,000         95,000
    Purchase of property and equipment                                        (1,860,000)      (934,000)
    Distributions from joint ventures                                            401,000        413,000
    Collections on notes receivable, sale of common stock                         11,000           --
    Investment in joint venture                                                     --         (606,000)
                                                                             -----------    -----------
               Net cash used in investing activities                          (1,412,000)    (1,032,000)
                                                                             -----------    -----------

Cash Flows from Financing Activities:
    Borrowings of long-term debt                                                 950,000           --
    Payments of long-term debt                                                   (79,000)      (450,000)
    Payments of obligations under capital leases                                 (70,000)       (76,000)
    Payments of damages payable on terminated or rejected leases                (272,000)      (281,000)
    Purchase of treasury stock                                                  (492,000)      (313,000)
    Dividends paid                                                              (215,000)      (186,000)
    Proceeds from exercise of options                                             19,000           --
    Due to Pennsylvania limited partnership                                         --          (30,000)
                                                                             -----------    -----------
               Net cash used in financing activities                            (159,000)    (1,336,000)
                                                                             -----------    -----------

Net Increase (Decrease) in Cash and Cash Equivalents                          (1,013,000)       284,000

Cash and Cash Equivalents, Beginning                                           1,752,000      1,468,000
                                                                             -----------    -----------

Cash and Cash Equivalents, Ending                                            $   739,000    $ 1,752,000
                                                                             ===========    ===========

                                                                                            (Continued)
</TABLE>


                See notes to consolidated financial statements.

                                      F-5
<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

               YEARS ENDED SEPTEMBER 30, 2000 AND OCTOBER 2, 1999
                                   (Continued)


<TABLE>
<CAPTION>
                                                       2000          1999
                                                       ----          ----
Supplemental Disclosure of Cash Flow Information:
<S>                                                   <C>         <C>
    Cash paid during the year for:
      Interest                                        $ 177,000   $168,000
                                                      =========   ========
      Income taxes                                    $ 490,000   $ 52,000
                                                      =========   ========

    Non-Cash Financing and Investing Activities:
      Deposit transferred to property and equipment   $  85,000   $   --
                                                      =========   ========
      Notes receivable for sales of liquor license    $  35,000   $196,000
                                                      =========   ========
      Common stock issued for notes receivable        $    --     $198,000
                                                      =========   ========
</TABLE>

                 See notes to consolidated financial statements.

                                      F-6
<PAGE>


                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                     SEPTEMBER 30, 2000 AND OCTOBER 2, 1999


NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Organization and Capitalization

             Incorporated in 1959, Flanigan's Enterprises, Inc. ("Flanigan's" or
             the "Company") operates in South Florida as a chain of full-service
             restaurants  and package liquor stores.  At September 30, 2000, the
             Company owned and/or operated six  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 four of the eleven  franchised  units  through  joint
             venture investments.  The Company's  restaurants are operated under
             the  "Flanigan's  Seafood  Bar and  Grill"  servicemark  while  the
             Company's  package  stores  are  operated  under  the "Big  Daddy's
             Liquors" servicemark.

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

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

         Principles of Consolidation

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

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

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

         Use of Estimates

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

                                      F-7

<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Continued)


NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         Cash and Cash Equivalents

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

         Inventories

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

         Liquor Licenses

             The cost of liquor  licenses  purchased  prior to October  21, 1970
             (the date Accounting Principles Board ("APB") Opinion No. 17 became
             effective),  amounted to  approximately  $130,000 at September  30,
             2000.  These  licenses are not  amortized  unless an  impairment in
             value is  indicated.  The  costs of all  liquor  licenses  acquired
             subsequent  to October 21, 1970 are  amortized  over a period of 40
             years.

         Property and Equipment

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

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

         Investment in Joint Ventures

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

         Concentrations of Credit Risk

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

                                      F-8

<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Continued)


NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         Concentrations of Credit Risk (Continued)

             From time to time  during the year,  the  Company  had  deposits in
             financial  institutions in excess of the federally  insured limits.
             At  September  30,  2000,  the  Company  had  deposits in excess of
             federally insured limits of approximately  $1,459,000.  The Company
             maintains its cash with high quality financial institutions,  which
             the Company believes limits these risks.

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

         Revenue Recognition

             The Company records  revenues from normal  recurring sales upon the
             delivery of products or services. 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 30, 2000 and October 2, 1999
             were $174,000 and $160,000, respectively.

         Fair Value of Financial Instruments

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

         Newly Issued Accounting Pronouncements

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

                                      F-9

<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Continued)


NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         Newly Issued Accounting Pronouncements (Continued)

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

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

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

         Income Taxes

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

                                      F-10

<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Continued)

NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         Stock-Based Compensation

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

         Long-Lived Assets

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


NOTE 2.  NOTES AND MORTGAGES RECEIVABLES

         Receivables,  net of allowances for uncollectible  amounts and deferred
         gains, consist of the following at September 30, 2000:

<TABLE>
<CAPTION>
          <S>                                                                                           <C>
           Notes and mortgages receivable from unrelated parties, bearing interest at rates
              ranging from 9% to 15% and due in varying installments through 2004                        $195,000
           Notes and mortgages receivable from related parties, bearing interest at rates
              ranging from 10% to 14% and due in varying installments through 2007                        155,000
                                                                                                          -------
                                                                                                          350,000
           Less deferred gains                                                                             84,000
                                                                                                         --------
                                                                                                          266,000
           Amount representing current portion                                                            119,000
                                                                                                          -------
                                                                                                         $147,000
</TABLE>

         The majority of the notes and mortgages  receivable  represent  amounts
         owed to the Company  for store  operations,  which were sold.  Unless a
         significant  amount of cash is received on the sale, a pro rata portion
         of the gain is deferred  and  recognized  only as payments on the notes
         and  mortgages  are  received  by the  Company.  Any losses on sales of
         stores are recognized  currently.  During fiscal 2000 and 1999,  $4,000
         and $3,000 of deferred  gains were  recognized on  collections  of such
         notes receivable.

                                      F-11

<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Continued)


NOTE 2.  NOTES AND MORTGAGES RECEIVABLES (Continued)

         Future  scheduled  payments on the  receivables  at September  30, 2000
         consist of the following:

          2001                       $119,000
          2002                         55,000
          2003                         23,000
          2004                         62,000
          2005                          9,000
          Thereafter                   82,000
                                     --------
                                     $350,000


NOTE 3.  PROPERTY AND EQUIPMENT

         Property  and  equipment  at  September  30,  2000   consisted  of  the
         following:

          Furniture and equipment                            $  6,010,000
          Leasehold interests and improvements                  5,498,000
          Land and land improvements                            1,007,000
          Building and improvements                               771,000
          Vehicles                                                147,000
                                                             ------------
                                                               13,433,000
          Less accumulated depreciation and amortization        8,116,000
                                                              -----------
                                                             $  5,317,000


NOTE 4.  INVESTMENTS IN JOINT VENTURES

         Miami, Florida

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

         Fort Lauderdale, Florida

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

         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.

                                      F-12

<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Continued)

NOTE 4.  INVESTMENTS IN JOINT VENTURES (Continued)

         Surfside, Florida (Continued)

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

         Kendall, Florida

             During  1999,   the  Company  made  an   investment  in  a  limited
             partnership,  which 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  acts as the general  partner and has a
             forty percent limited partnership interest.

         Summary

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

                                                  2000            1999
                                                  ----            ----
              Financial Position:
                Current assets              $     403,000     $   564,000
                Non-current assets              4,590,000       3,038,000
                Current liabilities               588,000         437,000
                Non-current liabilities           538,000         548,000

              Operating Results:
                Revenues                       10,208,000       5,609,000
                Income from operations          6,480,000       3,600,000
                Net income                      1,192,000         424,000


NOTE 5.  ACCOUNTS PAYABLE AND ACCRUED EXPENSES

         Accounts  payable  and accrued  expenses  consist of the  following  at
         September 30, 2000:

           Accounts payable                  $   972,000
           Salaries and wages                    186,000
           Property taxes                        124,000
           Potential uninsured claims             81,000
           Franchisee advance funds               17,000
           Other                                 134,000
                                              ----------
                                              $1,514,000

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

                                      F-13

<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Continued)


NOTE 6.  DAMAGES PAYABLE ON TERMINATED OR REJECTED LEASES

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

         In fiscal 1986 in connection with the bankruptcy  petition,  Flanigan's
         recorded  estimated  damages of  $4,278,000  for claims for losses as a
         result of rejected leases.  Because the damage payments were to be made
         over nine  years,  the total  amount  due was  discounted  at a rate of
         9.25%,  Flanigan's then effective borrowing rate. Remaining liabilities
         for damage  payments are included as "Damages  Payable on Terminated or
         Rejected Leases" in the accompanying  consolidated balance sheet. Based
         on the borrowing rate currently available to the Company for bank loans
         with similar  terms and average  maturities,  the fair value of damages
         payable on terminated and rejected leases is approximately $400,000.

         As of September  30, 2000,  damages  payable on  terminated or rejected
         leases, including imputed interest, mature as follows:

          2001                               $300,000
          2002                                119,000
                                              -------
             Total                            419,000
          Less amount representing interest    19,000
                                              -------
                                              400,000
          Less current maturities             289,000
                                              -------
          Long-term maturities               $111,000
                                              =======


NOTE 7.  INCOME TAXES

         The components of the Company's  provision  (benefit) for income taxes,
         for the fiscal years ended 2000 and 1999 are as follows:

                                       2000          1999
                                       ----          ----
          Current:
             Federal                 $284,000      $ 24,000
             State                     89,000        13,000
                                     --------      --------
                                      373,000        37,000
          Deferred:
             Federal                  (31,000)     (610,000)
             State                     (1,000)      (20,000)
                                     --------      --------
                                      (32,000)     (630,000)
                                     --------      --------
                                     $341,000     $(593,000)
                                     ========      ========



                                      F-14

<PAGE>



NOTE 7.  INCOME TAXES (Continued)

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

<TABLE>
<CAPTION>
                                                                       2000          1999
                                                                       ----          ----
<S>                                                                 <C>           <C>
          Tax provision at the statutory rate of 34%                $ 580,000     $ 582,000
          State income taxes, net of federal income tax                51,000        10,000
          Change in valuation allowance                                     -      (983,000)
          Net operating loss utilization                              (41,000)      250,000
          Tip credit utilization                                     (199,000)      250,000
          Tip and alternative minimum tax credit carryforwards              -       250,000
          Other                                                       (50,000)       48,000
                                                                    ---------     ---------
                                                                    $ 341,000     $(593,000)
                                                                    =========     =========
</TABLE>

         At  September   30,  2000,   the  Company  has   available  tip  credit
         carryforwards of approximately $310,000, which expire through 2015, and
         alternative minimum tax credit carryforwards of approximately  $73,000,
         which do not expire.

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

         The  components of the deferred tax assets were as follows at September
         30, 2000:

           Current:
              Tip credit carryforward                               $310,000
              Alternative minimum tax credit                          73,000
              Accruals for potential uninsured claims                 28,000
                                                                    --------
                                                                    $411,000

           Long-Term:
              Book/tax differences in property and equipment        $271,000
              Joint venture investments                              (31,000)
              Leases, capitalized for books only                      11,000
                                                                    --------
                                                                    $251,000

                                      F-15

<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Continued)


NOTE 8.  LONG-TERM DEBT

         Long-term debt consists of the following at September 30, 2000:

<TABLE>
<CAPTION>
         <S>                                                                                    <C>
         Note payable to bank, secured by general assets of the Company; bearing
         interest at 9.5% payable in monthly  installments;  principal is due in
         quarterly  installments  of $50,000 for 8 quarters  then  $75,000 for 8
         quarters, maturing in April 2004                                                       $ 950,000

         Mortgage payable,  secured by land,  bearing interest at 8%; payable in
         monthly installments of principal and interest,  maturing in April 2007                  335,000

         Notes  payable to various  employees,  related and  unrelated  parties,
         secured by various company assets,  bearing interest at 12%, payable in
         monthly  installments of principal and interest,  maturing in July 2002                  170,000
                                                                                               ----------
                                                                                                1,455,000
         Less current portion                                                                     295,000
                                                                                               ----------
                                                                                               $1,160,000
                                                                                               ==========
</TABLE>

         Long-term debt at September 30, 2000 matures as follows:

         2001                        $  295,000
         2002                           321,000
         2003                           312,000
         2004                           238,000
         2005                            14,000
         Thereafter                     275,000
                                     ----------
                                     $1,455,000
                                     ==========

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  this  fiscal  year,  the  Company  was served  with  several
            complaints  alleging  violations of the Americans with  Disabilities
            Act ("ADA") at all of its locations. The Company has retained an ADA
            expert, who is in the process of inspecting all locations, including
            the limited  partnerships and franchises,  and will provide a report
            setting forth ADA violations  which need to be corrected.  It is the
            Company's  intent to  correct  all ADA  violations  noted by its ADA
            expert and then  vigorously  defend the  lawsuits  arguing  that all
            locations  are in  compliance.  The Company  estimates  it will cost
            approximately  $10,000  per  location  to bring  the  location  into
            compliance.

                                      F-16

<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Continued)

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

         Pending Joint Venture

            During the third quarter of fiscal year 2000, the Company,  as agent
            for a limited  partnership  to be formed,  entered into an agreement
            for the purchase of an existing  restaurant  location in West Miami,
            Florida. The Company plans to file its application for a special use
            and zoning  variances  with  Miami-Dade  County,  Florida during the
            second  quarter of fiscal  2001.  Once the  limited  partnership  is
            formed,  with the Company acting as general  partner and up to forty
            percent  owner of the same,  funds  will be raised to  renovate  the
            business  premises for  operation as a  "Flanigan's  Seafood Bar and
            Grill" restaurant.  The renovations are expected to begin during the
            third quarter of fiscal year 2001 and the  restaurant is expected to
            be open for business by the end of fiscal year 2001.

         Leases

            The Company  leases a  substantial  portion of the land and building
            used in its  operations  under  leases with initial  terms  expiring
            between 2001 and 2049.  Renewal options are available on many of the
            leases.  In  certain   instances,   lease  rentals  are  subject  to
            cost-of-living  increases or fair market  rental  appraisals  and/or
            sales overrides.  Certain  properties are subleased  through various
            expiration dates.

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

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

                                                        Capital       Operating
                                                        Leases          Leases
                                                       ---------     ----------
        2001                                           $  55,000     $  811,000
        2002                                              32,000        597,000
        2003                                              32,000        537,000
        2004                                              32,000        524,000
        2005                                              32,000        412,000
        Thereafter                                       139,000      3,515,000
                                                       ---------     ----------
           Total                                         322,000     $6,396,000
                                                                     ==========
        Less amount representing interest                149,000
                                                       ---------
        Present value of minimum lease payments          173,000
        Less current obligations under capital leases     38,000
                                                       ---------
                                                       $ 135,000
                                                       =========

                                      F-17

<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Continued)


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

         Leases (Continued)

            Total rent expense for all operating leases (including those with an
            initial  term of less  than  one  year  and  net of  subleases)  was
            $703,000  and  $695,000  in  2000  and  1999,  respectively,  and is
            included  in  "Occupancy  costs"  in the  accompanying  consolidated
            statements of income.

            The Company  guarantees  various leases for  franchisees.  Remaining
            rental commitments  required under these leases total  approximately
            $2,648,000.

         Franchise Programs

            At  September  30,  2000,  the  Company  operated  seven units under
            franchise  agreements and four units under joint venture agreements.
            Under the  franchise  agreements,  the  Company  agrees  to  provide
            guidance,  advice and management assistance to the franchisees.  The
            Company also agrees to sponsor and manage  cooperative buying groups
            on behalf of the  franchisees  for the  purchase of  inventory.  The
            franchise   agreements   provide   for  fees  to  the   Company   of
            approximately  3% of gross sales.  Of the seven  franchised  stores,
            five are  owned or  operated  by  related  parties.  When  received,
            initial  franchise  fees are  deferred  and  recognized  ratably  as
            payments  are  received  on the  related  notes.  The Company is not
            currently offering or accepting new franchises.

         Employment Agreements

            Chief Executive Officer

                The Company has entered into an  employment  agreement  with the
                Chief Executive Officer which is renewable  annually on December
                31. The  agreement  provides,  among  other  things,  for a base
                annual  salary not to exceed  $150,000 and a  performance  bonus
                equal to  fifteen  percent  of  pre-tax  net income in excess of
                $650,000.  Bonuses  for fiscal  years 2000 and 1999  amounted to
                approximately $150,000 and $165,000,  respectively. In addition,
                the  agreement  provides for an option to purchase  4.99% of the
                outstanding  common  stock of the  Company  (but  not less  than
                45,350  shares)  at $2.48 per share  (post-stock  split),  which
                option  expires  December  31, 2001.  During 1999,  the employee
                exercised options to purchase 50,000 shares of common stock.

             Store Managers

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

                                      F-18

<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Continued)


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

         Management Agreement

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

         Eminent Domain Action

             During fiscal year 2000, the Company received official notification
             from the State of Florida,  Department  of  Transportation  ("DOT")
             that the DOT was  exercising  its right of eminent domain to "take"
             the hotel property upon which a restaurant, operated by the Company
             as general  partner of a limited  partnership,  is  located.  It is
             anticipated  that the DOT will  take  title to the  hotel  property
             during the fourth  quarter of fiscal  year 2001,  at which time the
             restaurant will be forced to close.


NOTE 10. COMMON STOCK

         Treasury Stock

             Exchange of Common Shares

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

             Purchase of Common Shares

                During 2000 and 1999,  the Company  purchased a total of 105,971
                and  68,700   shares  of  common   stock  at  a  total  cost  of
                approximately  $492,000 and $313,000 under a repurchase  program
                authorized by the Board of Directors.

                                      F-19

<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Continued)


NOTE 10. COMMON STOCK (Continued)

         Treasury Stock (Continued)

             Sale of Common Shares

                During 1999,  the Company  sold an  aggregate of 68,000  Company
                common shares to certain employee/officers (38,000 of which were
                pursuant  to  the   exercise   of   options)   for  a  total  of
                approximately $198,000. These employee/officers  purchased their
                shares by means of notes  which bear  interest  at 7%. The notes
                are  non-recourse,  and are  secured by the shares  owned by the
                employee/officers. The majority of the notes provide for payment
                of interest only until maturity, June 2004.

         Key Employee Incentive Stock Option Plan

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

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

         Stock Options

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

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

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

                                                   2000            1999
                                                   ----            ----
              Net income:
                 As Reported                     $1,364,000     $2,368,000
                 Pro Forma                       $1,308,000     $2,260,000

              Earnings Per Share:
                 Basic:
                    As Reported                        $.73          $1.21
                    Pro Forma                          $.70          $1.15
                 Diluted:
                    As Reported                        $.71          $1.15
                    Pro Forma                          $.68          $1.10


                                      F-20

<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Continued)


NOTE 10. COMMON STOCK (Continued)

         Stock Options (Continued)

             The  Company  used  the  Black-Scholes   option-pricing   model  to
             determine  the fair value of grants  made in 1999.  No grants  were
             made in 2000. The following assumptions were applied in determining
             the pro forma compensation cost:

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

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

                                                          2000         1999
                                                          ----         ----

              Outstanding at beginning of year           276,295      337,980
              Options granted                                  -      115,900
              Options exercised                          (12,000)    (177,585)
              Options expired                            (31,250)           -
                                                         -------     --------
              Outstanding at end of year                 233,045      276,295
                                                         =======     ========
              Exercisable at end of year                 233,045      160,395
                                                         =======     ========

            Weighted average option exercise price  information for fiscal years
            2000 and 1999 is as follows:

                                                        2000       1999
                                                        ----       ----

              Outstanding at beginning of year          $2.50     $2.39
                                                         ====      ====
              Granted during the year                       -      4.50
                                                         ====      ====
              Exercised during the year                  1.63      2.25
                                                         ====      ====
              Outstanding at end of year                 3.27      3.34
                                                         ====      ====
              Exercisable at end of year                $3.27     $2.50
                                                         ====      ====


             Significant  options  groups  outstanding at September 30, 2000 and
             related weighted average price and life information are as follows:

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

              12/21/95     40,000        40,000          1.63          .25
               3/14/96     36,000        36,000          2.25          .5
               1/08/97     72,395        72,395          3.25         1.25
                7/3/99     84,650        84,650          4.50         8.5


                                      F-21

<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Continued)


NOTE 11. NET INCOME PER COMMON SHARE

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

<TABLE>
<CAPTION>
                                                                   2000              1999
                                                                   ----              ----
         <S>                                                      <C>              <C>
         Basic weighted average shares                            1,856,000        1,957,000
         Incremental shares relating to outstanding options          75,000          105,000
                                                                  ---------        ---------
         Diluted weighted average shares                          1,931,000        2,062,000
                                                                  =========        =========
</TABLE>


NOTE 12. RELATED PARTY TRANSACTIONS

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

         During fiscal 2000 and 1999,  respectively,  the Company incurred legal
         fees in the form of salary of  approximately  $116,000 and $129,000 for
         services provided by a member of the Board of Directors.

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

NOTE 13. BUSINESS SEGMENTS

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

         Information  concerning the revenues and operating income for the years
         ended September 30, 2000 and October 2, 1999, 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.

                                                    2000            1999
                                                    ----            ----
         Operating Revenues:
            Retail package stores               $ 8,870,000     $ 7,255,000
            Restaurants                          14,344,000      13,430,000
            Other revenues                        1,946,000       1,630,000
                                                -----------     -----------
               Total operating revenues         $25,160,000     $22,315,000
                                                ===========     ===========


                                      F-22

<PAGE>

                  FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Continued)


NOTE 13. BUSINESS SEGMENTS (Continued)

<TABLE>
<CAPTION>

                                                                        2000            1999
                                                                        ----            ----
         Income From Operations Reconciled to Income before
         <S>                                                      <C>               <C>
            Income Taxes:
               Retail package stores                              $     308,000     $   256,000
               Restaurants                                            1,761,000       1,607,000
                                                                    -----------       ---------
                                                                      2,069,000       1,863,000
               Corporate expenses, net of other revenues               (289,000)       (320,000)
                                                                    -----------      ----------
            Operating Income                                          1,780,000       1,543,000
            Interest expense, net of interest income                   (123,000)        (96,000)
            Other                                                        48,000         328,000
                                                                  -------------      ----------
         Income Before Income Taxes                                $  1,705,000      $1,775,000
                                                                    ===========       =========

         Identifiable Assets:
            Retail package store                                   $  2,066,000    $  2,108,000
            Restaurants                                               3,969,000       3,587,000
                                                                    -----------     -----------
                                                                      6,035,000       5,695,000
            Corporate                                                 7,398,000       5,077,000
                                                                    -----------     -----------
         Consolidated Totals                                        $13,433,000     $10,772,000
                                                                     ==========      ==========

         Capital Expenditures:
            Retail package stores                                 $      67,000   $      82,000
            Restaurants                                                 967,000         794,000
                                                                   ------------    ------------
                                                                      1,034,000         876,000
            Corporate                                                   911,000          58,000
                                                                   ------------   -------------
         Total Capital Expenditures                                $  1,945,000   $     934,000
                                                                    ===========    ============

         Depreciation and Amortization:
            Retail package stores                                 $      97,000   $      92,000
            Restaurants                                                 438,000         417,000
                                                                   ------------    ------------
                                                                        535,000         509,000
            Corporate                                                   146,000         128,000
                                                                   ------------    ------------
         Total Depreciation and Amortization                      $     681,000   $     637,000
                                                                   ============    ============
</TABLE>

NOTE 14. OTHER INCOME (EXPENSE)

         Other  income  (expense)  in  the  consolidated  statements  of  income
         consists of the  following  for the years ended  September 30, 2000 and
         October 2, 1999, respectively.

                                                            2000         1999
                                                            ----         ----

         Non-franchise related rental income              $31,000    $  36,000
         Loss on retirement of property and equipment           -      (66,000)
         Insurance recoveries                                   -      275,000
         Gain on sale of liquor license                     8,000       30,000
         Miscellaneous                                      5,000       50,000
                                                          -------     --------
                                                          $44,000     $325,000
                                                           ======      =======

                                      F-23