Financial Analysis

NOTE 12. COMMITMENTS, CONTINGENCIES AND OTHER MATTERS Master Service Agreement During the first quarter of our fiscal year 2025, we entered into a new Master Services Agreement with our current major vendor for a period of one (1) year effective January 1, 2025, with Company options for four (4) one (1) year renewal options to extend the term of the same. In this new Master Service Agreement, as in our prior Master Service Agreements, we commit to purchase specific products through our current major vendor but are free to purchase other products through other vendors, provided no less than 80% of our overall product needs are purchased through our current major vendor. During the third quarter of our fiscal year 2025, we exercised the first one (1) year renewal option and extended the term of the Master Services Agreement for a period of one (1) year effective January 1, 2026. ERP Contract In the third quarter of our fiscal year 2024, we entered into an agreement with Oracle, an unrelated third-party vendor for the licensing and support of NetSuite, a cloud-based Oracle ERP solution to replace our previous general ledger. The agreement is for a period of five years at a fixed rate of approximately $40,000 annually, with a cap on the percentage increase to our fees for our options to extend the term of the agreement for years six and seven. Effective June 29, 2025, the first day of the fourth quarter of our fiscal year 2025, NetSuite functions as the Companys general ledger. L …

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NOTE 11. DEBT Debt consists of the following as of September 27, 2025 and September 28, 2024: Long-Term Debt 2025 2024 Mortgage payable to institutional lender, secured by a first mortgage on real property and improvements, bearing interest at 3.86%, amortized over twenty (20) years, payable in monthly installments of principal and interest of approximately $43,400, with a balloon payment of approximately $5,373,000 due on November 27, 2026. As of September 27 2025, the net book value of the collateral securing this mortgage was $5,460,000. 5,750 6,016 Mortgage payable to institutional lender, secured by first mortgage on real property and improvements, bearing interest at the fixed rate of 3.63% per annum, fully amortized over fifteen (15) years, payable in monthly installments of principal and interest of approximately $31,100, with a final payment on July 1, 2036. As of September 27, 2025, the net book value of the collateral securing this mortgage was $10,741,000. 3,332 3,579 Mortgage payable to institutional lender, secured by first mortgage on real property and improvements, bearing interest at the fixed rate of 3.65% per annum, fully amortized over fifteen (15) years, payable in monthly installments of principal and interest of approximately $16,000, with a final payment on March 2, 2036. As of September 27, 2025, the net book value of the collateral securing this mortgage was $7,667,000. 1,663 1,790 Mortgage payable to institutional lender, secured by a first mortgage …

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Changes in deferred revenue on the consolidated balance sheets were as follows: Loyalty Program Gift Cards Holiday Promo Lunch Club Big Daddy Good Customer Other Total September 28, 2024 $ 1,388 $ $ 102 $ 1,405 $ 2 $ 2,897 Revenue deferred 3,598 1,811 20 1,404 7 6,840 Revenue recognized (3,434 ) (1,811 ) (87 ) (1,819 ) (7 ) (7,158 ) September 27, 2025 $ 1,552 $ $ 35 $ 990 $ 2 $ 2,579 September 30, 2023 $ 1,215 $ $ 79 $ 1,341 $ $ 2,635 Revenue deferred 3,560 1,663 24 831 2 6,080 Revenue recognized (3,387 ) (1,663 ) (1 ) (767 ) (5,818 ) September 28, 2024 $ 1,388 $ $ 102 $ 1,405 $ 2 $ 2,897 …

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NOTE 13. FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS We follow FASB (ASC) Topic 820, Fair Value Measurement, for financial assets and liabilities and for non-financial assets and liabilities that are recognized or disclosed at fair value on at least an annual basis. Topic 820 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, we consider the principal or most advantageous market in which it would transact and consider assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions and risk of non-performance. Topic 820 establishes a fair market hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Topic 820 establishes three levels of inputs that may be used to measure fair value: Level 1 Inputs Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 Inputs Inputs other than quoted prices included in Level 1 that are either directly or indirectly observable through correlation with market data. These include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabili …

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NOTE 10. INCOME TAXES The components of our provision for income taxes for our fiscal years 2025 and 2024 are as follows: (in thousands) 2025 2024 Current: Federal $ 267 $ 246 State 277 305 544 551 Deferred: Federal (1 ) (282 ) State 79 17 78 (265 ) $ 622 $ 286 A reconciliation of income tax computed at the statutory federal rate to income tax expense is as follows: (in thousands) 2025 2024 Tax provision at the statutory rate $ 1,814 $ 1,173 Non-controlling interests (627 ) (408 ) State income taxes, net of federal income tax 279 264 FICA tip credit (1,112 ) (1,029 ) True up adjustment 46 77 Other permanent items, net 222 209 $ 622 $ 286 We have deferred tax liabilities and assets which arise primarily due to depreciation recorded at different rates for tax and book purposes offset by cost basis differences in depreciable assets due to the deferral of the recognition of insurance recoveries on casualty losses for tax purposes, investments in and management fees paid by limited partnerships, accruals for potential uninsured claims, bonuses accrued for book purposes but not paid within two and a half months for tax purposes, the capitalization of certain inventory costs for tax purposes not recognized for financial reporting purposes, the recognition of revenue from gift cards and other promotional programs not redeemed within twelve months of issuance, allowances for uncollectable receivables, unfunded limited retirement commitments, book-tax differences related to operating l …

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Recently Adopted and Recently Issued Accounting Pronouncements Adopted The FASB issued guidance, Accounting Standards Update (ASU) 2016-13 Financial Instruments Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which provides a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. This guidance was effective for the Company in the first quarter of our fiscal year 2024; however, after performing a thorough analysis the Company concluded there was no material impact from the adoption of this ASU. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which updates reportable segment disclosure requirements, primarily through requiring enhanced disclosures about significant segment expenses and information used to assess segment performance. We early adopted this ASU in the third quarter of our fiscal year 2024 and this ASU affected …

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NOTE 17. 401(k) PLAN Effective July 1, 2004, we began sponsoring a 401(k) retirement plan covering substantially all employees who meet certain eligibility requirements. Employees may contribute elective deferrals to the plan up to amounts allowed under the Internal Revenue Code. We are not required to contribute to the plan but may make discretionary profit sharing and/or matching contributions. During our fiscal years ended September 27, 2025 and September 28, 2024, the Board of Directors approved discretionary matching contributions totaling $87,000 and $74,000, respectively.

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NOTE 7. DEFERRED REVENUE Changes in deferred revenue on the consolidated balance sheets were as follows: Loyalty Program Gift Cards Holiday Promo Lunch Club Big Daddy Good Customer Other Total September 28, 2024 $ 1,388 $ $ 102 $ 1,405 $ 2 $ 2,897 Revenue deferred 3,598 1,811 20 1,404 7 6,840 Revenue recognized (3,434 ) (1,811 ) (87 ) (1,819 ) (7 ) (7,158 ) September 27, 2025 $ 1,552 $ $ 35 $ 990 $ 2 $ 2,579 September 30, 2023 $ 1,215 $ $ 79 $ 1,341 $ $ 2,635 Revenue deferred 3,560 1,663 24 831 2 6,080 Revenue recognized (3,387 ) (1,663 ) (1 ) (767 ) (5,818 ) September 28, 2024 $ 1,388 $ $ 102 $ 1,405 $ 2 $ 2,897 …

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NOTE 15. BUSINESS SEGMENTS We operate in two reportable segments package stores and restaurants. The operation of package stores consists of retail liquor sales and related items. The operation of restaurants consists of restaurant food and bar sales. Operating income is total revenue less cost of merchandise sold and operating expenses relative to each segment. In order to evaluate each of these two operating segments we also break out our Corporate entity which functions as a cost center accumulating expenses that do not directly relate to the reportable segments operations. As such, our Chief Operating Decision Maker (CODM) (our Chief Financial Officer ) ensures that these expenses are separated in order to properly evaluate the two main reportable segments as presented below. We have disclosed for each reportable segment the significant expense categories that are reviewed by CODM in the tables below and there are no additional significant expenses within the expense categories presented. The key areas of focus by CODM for allocation of resources are revenues from each reportable segment, as well as their cost of merchandise sold, payroll related costs, and operating expenses (these figures are presented both pre-elimination and post-elimination with a line clearly distinguishing the elimination amounts). While CODM analyzes these categories, the area of focus is period over period fluxes to determine that the right allocation of resources is attributed to each segment in …

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NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Capitalization The Company was incorporated in 1959 and operates in South Florida as a chain of full-service restaurants and package liquor stores. Restaurant food and beverage sales make up the majority of our total revenue. As of September 27, 2025, we (i) operate 32 units consisting of restaurants, package liquor stores and combination restaurants/package liquor stores that we either own or have operational control over and partial ownership in; and (ii) franchise an additional five units, consisting of two restaurants, (one of which we operate) and three combination restaurants/package liquor stores. With the exception of one restaurant we operate under the name The Whales Rib, a restaurant in which we do not have an ownership interest, and Brendans Sports Pub, a restaurant/bar we own, all of the restaurants operate under our service marks Flanigans Seafood Bar and Grill or Flanigans and all of the package liquor stores operate under our service marks Big Daddys Liquors or Big Daddys Wine & Liquors. The Companys Articles of Incorporation, as amended, authorize us to issue and have outstanding at any one time 5,000,000 shares of common stock at a par value of $0.10 per share. We operate under a 52-53 week year ending the Saturday closest to September 30. Our fiscal years 2025 and 2024 are each comprised of a 52-week period. Principles of Consolidation The consolidated financial statements include the a …

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NOTE 14. COMMON STOCK Treasury Stock Purchase of Common Shares During our fiscal years 2025 and 2024, we did not purchase any shares of our common stock. As of September 27, 2025, we still have authority to purchase 65,414 shares of our common stock under the discretionary plan approved by the Board of Directors on May 17, 2007. Our current repurchase plan has no expiration date and purchases under this program may be made from time to time on the open market and in private transactions, depending on market conditions, up to a purchase price of price of $15 per share. The Internal Revenue Service imposes a 1.0% tax on stock repurchases after December 31, 2022 over $1,000,000 within a fiscal year.

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NOTE 18. SUBSEQUENT EVENTS Subsequent to the end of our fiscal year end 2025, we approved the 2026 baby back rib contract with our existing rib supplier. See the section titled Purchase Commitments in Note 12 for additional details. Subsequent to the end of our fiscal year 2025, we re-financed with our institutional lender, our mortgage loan encumbering the real property and improvements located at 12750 12790 S.W. 88 th Street, Miami, Florida where our Flanigans Calusa Center and our limited partnership owned Flanigans Seafood Bar and Grill restaurant operate (Store #70), without increasing the principal amount borrowed at this time ($5,676,856). The re-financed mortgage loan earns interest at a fluctuating rate per year equal to the sum of (i) the greater of the Term SOFR Daily Floating Rate or the Index Floor (which for purposes hereof is 0.00%) and (ii) 2.25%, with the first payment of principal and interest due January 31, 2026 and monthly thereafter on the last day of each month until November 30, 2030 when the entire principal payment and all accrued interest is due in full. We received no excess funds from the re-financing of this mortgage loan. …

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