bdl-20251227

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

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 27, 2025

☐ 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 001-06836

FLANIGAN’S ENTERPRISES, INC.

(Exact name of registrant as specified in its charter)

Florida		59-0877638
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

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

(954) 377-1961

(Registrant’s telephone number, including area code)

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

Title of each class		Trading symbol(s)		Name of each exchange on which registered
Common Stock, $.10 par value		BDL		NYSE American

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐	Non-accelerated filer ☒	Smaller reporting company ☒
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

As of February 9, 2026 there were 1,858,647 shares of the registrant’s Common Stock, $0.10 par value, outstanding.

FLANIGAN’S ENTERPRISES, INC. AND SUBSIDIARIES

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME	1
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME	2
CONDENSED CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 27, 2025 (UNAUDITED) AND SEPTEMBER 27, 2025	3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY	5
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	6
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	8

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	16
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	22
ITEM 4. CONTROLS AND PROCEDURES	24

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS	25
ITEM 1A. RISK FACTORS	Not Applicable
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	25
ITEM 3. DEFAULTS UPON SENIOR SECURITIES	Not Applicable
ITEM 4. MINE SAFETY DISCLOSURES	Not Applicable
ITEM 5. OTHER INFORMATION	25
ITEM 6. EXHIBITS	25
SIGNATURES	26

LIST XBRL DOCUMENTS

As used in this Quarterly Report on Form 10-Q, the terms “we,” “us,” “our,” the “Company” and “Flanigan’s” mean Flanigan’s Enterprises, Inc. and its subsidiaries (unless the context indicates a different meaning).

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FLANIGAN’S ENTERPRISES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except share and per share amounts)

	Thirteen Weeks Ended
	December 27, 2025			December 28, 2024
REVENUES:
Restaurant food sales	$	30,932		$	29,126
Restaurant bar sales		7,855			7,962
Package store sales		13,285			12,435
Franchise related revenues		438			431
Other revenues		58			41
		52,568			49,995
COSTS AND EXPENSES:
Cost of merchandise sold:
Restaurant		12,951			13,029
Package goods		9,965			9,481
Payroll and related costs		16,371			15,746
Operating expenses		6,985			6,504
Occupancy costs		2,015			1,859
Selling, general and administrative expenses		1,416			1,478
Depreciation and amortization		1,196			1,146
		50,899			49,243
Income from Operations		1,669			752
OTHER INCOME (EXPENSE):
Interest expense		(253	)		(250	)
Interest and other income		68			59
Rental income		277			267
Rental expense		(134	)		(161	)
		(42	)		(85	)

Income before provision for income taxes		1,627			667

Provision for income taxes		(128	)		(35	)

Net Income		1,499			632

Less: Net Income attributable to noncontrolling interests		(694	)		(577	)
Net Income Attributable to Flanigan’s Enterprises Inc. Stockholders	$	805		$	55

Net Income Per Common Share:
Basic and Diluted	$	0.43		$	0.03

Weighted Average Shares and Equivalent Shares Outstanding
Basic and Diluted		1,858,647			1,858,647

See accompanying notes to unaudited condensed consolidated financial statements.

FLANIGAN’S ENTERPRISES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

	Thirteen Weeks Ended
	December 27,		December 28,
	2025		2024
Net Income:	$	1,499	$	632
Other comprehensive income:
Change in fair value of interest rate swap, net of tax		—		331
Total Comprehensive Income	$	1,499	$	963

See accompanying notes to unaudited condensed consolidated financial statements.

FLANIGAN’S ENTERPRISES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

DECEMBER 27, 2025 (UNAUDITED) AND SEPTEMBER 27, 2025

(in thousands, except share amounts)

	December 27, 2025		September 27, 2025
ASSETS

Current Assets:

Cash and cash equivalents	$	22,967	$	20,094
Prepaid income taxes		44		172
Other receivables		1,421		892
Inventories		7,073		6,920
Prepaid expenses		825		1,810
Other current assets		715		705

Total current assets		33,045		30,593

Property and equipment, net		81,968		82,689
Construction in progress		94		3
		82,062		82,692

Right-of-use assets, operating leases		24,130		24,817

Investment in limited partnerships		330		322

Other Assets:

Liquor licenses		1,268		1,268
Leasehold interests, net		34		41
Deposits on property and equipment		776		455
Other		426		435

Total other assets		2,504		2,199

Total assets	$	142,071	$	140,623

See accompanying notes to unaudited condensed consolidated financial statements.

FLANIGAN’S ENTERPRISES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

DECEMBER 27, 2025 (UNAUDITED) AND SEPTEMBER 27, 2025

(in thousands, except share amounts)

(Continued)

	December 27, 2025			September 27, 2025
LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities:

Accounts payable and accrued expenses	$	5,467		$	5,889
Accrued compensation		2,937			2,113
Due to franchisees		2,496			3,192
Current portion of long-term debt		1,598			1,484
Operating lease liabilities, current		2,757			2,704
Other current liabilities		38			157
Deferred revenue		4,771			2,579
Total current liabilities		20,064			18,118

Long-term debt, net of current portion		18,662			19,134

Operating lease liabilities, non-current		23,086			23,793
Deferred tax liabilities		481			481

Total liabilities		62,293			61,526

Commitments and Contingencies Note 9
Stockholders’ Equity:
Flanigan’s Enterprises, Inc.’s Stockholders’ Equity
Common stock, $.10 par value, 5,000,000 shares authorized; 4,197,642 shares issued; 1,858,647 shares outstanding		420			420
Capital in excess of par value		6,128			6,128
Retained earnings		65,490			64,685
Treasury stock, at cost, 2,338,995 shares		(6,077	)		(6,077	)
Total Flanigan’s Enterprises, Inc.’s Stockholders’ Equity		65,961			65,156
Noncontrolling interests		13,817			13,941
Total stockholders’ equity		79,778			79,097

Total liabilities and stockholders’ equity	$	142,071		$	140,623

See accompanying notes to unaudited condensed consolidated financial statements.

FLANIGAN’S ENTERPRISES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS

OF STOCKHOLDERS’ EQUITY

FOR THE THIRTEEN WEEKS ENDED DECEMBER 27, 2025 AND DECEMBER 28, 2024

(in thousands, except share amounts)

	Common Stock				Capital in Excess of				Retained		Treasury Stock					Noncontrolling
	Shares		Amount		Par Value		AOCI		Earnings		Shares		Amount			Interests			Total

Balance, September 27, 2025		4,197,642	$	420	$	6,128	$	—	$	64,685		2,338,995	$	(6,077	)	$	13,941		$	79,097

Net income		—		—		—		—		805		—		—			694			1,499
Distributions to noncontrolling interests		—		—		—		—		—		—		—			(818	)		(818	)

Balance, December 27, 2025		4,197,642	$	420	$	6,128	$	—	$	65,490		2,338,995	$	(6,077	)	$	13,817		$	79,778

	Common Stock				Capital in Excess of					Retained		Treasury Stock					Noncontrolling
	Shares		Amount		Par Value		AOCI			Earnings		Shares		Amount			Interests			Total

Balance, September 28, 2024		4,197,642	$	420	$	6,240	$	(41	)	$	60,674		2,338,995	$	(6,077	)	$	14,194		$	75,410

Net income		—		—		—		—			55		—		—			577			632
Other comprehensive income		—		—		—		331			—		—		—			—			331
Distributions to noncontrolling interests		—		—		—		—			—		—		—			(740	)		(740	)
Purchase of noncontrolling interest		—		—		—		—			—		—		—			(4	)		(4	)

Balance, December 28, 2024		4,197,642	$	420	$	6,240	$	290		$	60,729		2,338,995	$	(6,077	)	$	14,027		$	75,629

See accompanying notes to unaudited condensed consolidated financial statements.

FLANIGAN’S ENTERPRISES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THIRTEEN WEEKS ENDED DECEMBER 27, 2025 AND DECEMBER 28, 2024

(in thousands)

	December 27, 2025			December 28, 2024
Cash Flows from Operating Activities:
Net income	$	1,499		$	632
Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities:
Depreciation and amortization		1,196			1,146
Amortization of leasehold interests		7			7
Amortization of operating lease right-of-use assets		687			652
Gain on interest rate swap		(6	)		—
Loss on abandonment of property and equipment		4			4
Amortization of deferred loan costs		9			9
Income from unconsolidated limited partnership		(12	)		(5	)

Changes in operating assets and liabilities:
(Increase) decrease in:
Other receivables		(529	)		(156	)
Prepaid income taxes		128			35
Inventories		(153	)		(475	)
Prepaid expenses		985			1,030
Other current assets		(10	)		—
Other assets		15			34
Increase (decrease) in:
Accounts payable and accrued expenses		402			2,808
Other current liabilities		(119	)		—
Operating lease liabilities		(654	)		(579	)
Due to franchisees		(696	)		(22	)
Deferred revenue		2,192			2,581
Net cash and cash equivalents provided by operating activities		4,945			7,701

Cash Flows from Investing Activities:
Purchase of property and equipment		(472	)		(736	)
Purchase of construction in progress		(91	)		—
Deposits on property and equipment		(353	)		(13	)
Proceeds from sale of property and equipment		25			12
Proceeds from insurance recovery		—			30
Distributions from unconsolidated limited partnership		4			4
Net cash and cash equivalents used in investing activities		(887	)		(703	)

See accompanying notes to unaudited condensed consolidated financial statements.

FLANIGAN’S ENTERPRISES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THIRTEEN WEEKS ENDED DECEMBER 27, 2025 AND DECEMBER 28, 2024

(in thousands)

(Continued)

	December 27, 2025			December 28, 2024
Cash Flows from Financing Activities:
Payments on long-term debt		(349	)		(334	)
Payment of debt issuance costs		(18	)		—
Purchase of noncontrolling limited partnership interest		—			(4	)
Distributions to limited partnerships’ noncontrolling interests		(818	)		(740	)
Net cash and cash equivalents used in financing activities		(1,185	)		(1,078	)
Net Increase in Cash and Cash Equivalents		2,873			5,920
Cash and Cash Equivalents - Beginning of Period		20,094			21,402
Cash and Cash Equivalents - End of Period	$	22,967		$	27,322
Supplemental Disclosure for Cash Flow Information:
Cash paid during the year for:
Interest	$	192		$	205
Income taxes	$	—		$	—
Supplemental Disclosure of Non-Cash Investing and Financing Activities:
Increase in fair value of interest rate swap	$	—		$	443
Purchase deposits capitalized to property and equipment	$	32		$	9

See accompanying notes to unaudited condensed consolidated financial statements.

FLANIGAN’S ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THIRTEEN WEEKS ENDED DECEMBER 27, 2025 AND DECEMBER 28, 2024

(1) BASIS OF PRESENTATION:

The accompanying condensed consolidated financial information for the thirteen weeks ended December 27, 2025 and December 28, 2024 is unaudited. Financial information as of September 27, 2025 has been derived from the audited financial statements of Flanigan’s Enterprises, Inc., a Florida corporation, together with its subsidiaries, (the “Company”, “we”, “our”, “ours” and “us” as the context requires), but does not include all disclosures required by accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the financial information for the periods indicated have been included. For further information regarding the Company’s accounting policies, refer to the Consolidated Financial Statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended September 27, 2025. Operating results for interim periods are not necessarily indicative of results to be expected for a full year.

The condensed consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries and the accounts of the ten limited partnerships in which we act as general partner and have controlling interests. All intercompany balances and transactions have been eliminated. Non-controlling interest represents the limited partners’ proportionate share of the net assets and results of operations of the ten limited partnerships.

The consolidated financial statements and related disclosures for condensed interim reporting are prepared in conformity with accounting principles generally accepted in the United States. We are required to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities at the date of the financial statements. These estimates include assessing the estimated useful lives of tangible assets, the recognition of deferred tax assets and liabilities and estimates relating to the calculation of incremental borrowing rates and length of leases associated with right-of-use assets and corresponding liabilities, and estimates relating to loyalty reward programs and gift cards. Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in our condensed consolidated financial statements in the period they are determined to be necessary. Although these estimates are based on our knowledge of current events and actions we may undertake in the future, they may ultimately differ from actual results.

We adjusted our condensed consolidated Statements of Income to correct rental income from Revenues to Other Income and rental expense from Operating, Occupancy and Selling, General and Administrative expenses to Other Expense. We believe this presentation more accurately reflects revenue generated from ancillary activity rather than revenue generated from core operations. Prior period amounts have been adjusted. This correction had no impact on reported results of operations.

(2) EARNINGS PER SHARE:

We follow Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Section 260 - “Earnings per Share”. This section provides for the calculation of basic and diluted earnings per share. The data on Page 1 shows the amounts used in computing earnings per share. As of December 27, 2025 and December 28, 2024, no stock options or other potentially dilutive securities were outstanding and accordingly, there is no difference in basic and diluted per share amounts.

(3) RECENTLY ADOPTED AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS:

Recently Adopted

During the 13 weeks ended December 27, 2025 the Company did not adopt any new accounting pronouncements that had a material impact on our financial statements.

Recently Issued

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which requires enhanced income tax disclosures, primarily related to standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. This ASU will be effective for the Company for our fiscal year 2026 annual reporting period, with the guidance applied either prospectively or retrospectively. Early adoption is permitted. We are currently evaluating the impact that the adoption of this ASU will have on our tax disclosures.

In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures” which requires disclosure of disaggregated information about certain income statement expense line items in the notes to the financial statements on an interim and annual basis. In January 2025, the FASB issued ASU 2025-01 clarifying the effective date of ASU 2024-03, which will be effective for the Company for our fiscal year 2028 annual reporting period, including interim periods within that fiscal year, with guidance applied either prospectively or retrospectively. Early adoption is permitted. We are currently evaluating the impact that the adoption of this ASU will have on our interim and consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06, “Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40)” which eliminates all references to project stages and requires capitalization of software costs when: (i) management authorizes and commits to funding the software project, and (ii) it is probable the software project will be completed and used as intended, known as the “probable-to-completion recognition threshold.” Entities must consider whether there is significant uncertainty associated with the development activities of the software in determining if the threshold is met. In addition, the amendments in the update specify that property, plant and equipment disclosure requirements are required for capitalized internal-use software costs, regardless of financial statement presentation and also incorporate the recognition requirements for website-specific development costs. This ASU will be effective for the Company for our fiscal year 2029 annual reporting period, including interim periods within that fiscal year, with the guidance applied either prospectively, retrospectively, or via a modified prospective transition method. Early adoption is permitted. We are currently evaluating the impact that the adoption of this ASU will have on our interim and consolidated financial statements.

In December 2025, the FASB issued ASU 2025-11, “Interim Reporting (Topic 270): Narrow-Scope Improvements”, which clarifies the guidance in Topic 270 to improve the consistency of interim financial reporting. The ASU provides a comprehensive list of required interim disclosures and introduces a disclosure principle requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. This ASU will be effective for the Company for our fiscal year 2029 annual reporting period, including interim periods within that fiscal year, with the guidance applied either prospectively or retrospectively. Early adoption permitted. We are currently evaluating the impact that the adoption of this ASU will have on our interim and consolidated financial statements.

There are no other recently issued accounting pronouncements that we have not yet adopted that we believe will have a material effect on our financial statements.

(4) PURCHASE OF REAL PROPERTY:

During the third quarter of our fiscal year 2025, we purchased the vacant real property located at 20971 Old Cutler Road, Cutler Bay, Florida 33189 (the “Cutler Bay Property”) for a purchase price of $2,200,000. We paid all cash at closing. We plan to construct a 6,400 square foot building on the Cutler Bay Property to lease to a limited partnership of which we will be the sole general partner pursuant to our limited partnership financial arrangement to develop and operate a “Flanigan’s” restaurant.

(5) INCOME TAXES:

We account for our income taxes using FASB ASC Topic 740, “Income Taxes”, which requires among other things, recognition of future tax benefits measured at enacted rates attributable to deductible temporary differences between financial statement and income tax basis of assets and liabilities and to tax net operating loss carryforwards and tax credits to the extent that realization of said tax benefits is more likely than not. The Company’s income tax expense computed at the statutory federal rate of 21% differs from its effective tax rate primarily due to state income taxes, noncontrolling interests, and income tax credits.

On July 4, 2025, the One Big Beautiful Bill Act (Public Law No. 119-21) was signed into law. Among other provisions, the legislation includes certain tax incentives and regulatory changes applicable to businesses in the food service and hospitality industries. The legislation has multiple effective dates, with certain provisions effective in 2025 and others to be implemented through 2027. We continue to review the legislation to determine its potential impact.

(6) DEFERRED REVENUE:

Changes in deferred revenue on the unaudited condensed consolidated balance sheets were as follows:

				Loyalty Program
	Gift Cards			Holiday Promo			Lunch Club			Big Daddy Good Customer			Other			Total
September 27, 2025	$	1,552		$	—		$	35		$	990		$	2		$	2,579
Revenue deferred		4,867			931			—			554			—			6,352
Revenue recognized		(3,464	)		—			(8	)		(686	)		(2	)		(4,160	)
December 27, 2025	$	2,955		$	931		$	27		$	858		$	—		$	4,771

September 28, 2024	$	1,388		$	—		$	102		$	1,405		$	2		$	2,897
Revenue deferred		3,292			1,513			7			441			—			5,253
Revenue recognized		(1,911	)		(434	)		—			(325	)		(2	)		(2,672	)
December 28, 2024	$	2,769		$	1,079		$	109		$	1,521		$	—		$	5,478

The Holiday Promo revenue recognized in Q1 2025 pertains to the breakage upon issuance of the promotional cards.

The Holiday Promo revenue recognized in Q1 2026 pertains to the variable transaction price adjusted for the probability of redemption.

(7) INSURANCE PREMIUMS:

During the first quarter of our fiscal year 2026, for the policy year commencing December 30, 2025, we obtained coverage on the following general liability, auto, property, excess liability, terrorism and cyber security policies with premiums totaling approximately $3,855,000, of which general liability, property, excess liability, terrorism and cyber security insurance includes coverage for our franchises (of approximately $848,000), which are not included in our condensed consolidated financial statements:

(i) For the policy year beginning December 30, 2025, our general liability insurance, excluding limited partnerships, is a one (1) year policy with our insurance carriers. For the policy commencing December 30, 2025, the self-insured retention per occurrence is $50,000. The one (1) year general liability insurance premium is in the amount of $548,000;

(ii) For the policy year beginning December 30, 2025, the general liability insurance for our limited partnerships, including franchisees and the managed restaurant is a one (1) year policy with our insurance carriers. For the policy commencing December 30, 2025, the self-insured retention per occurrence is $10,000. The one (1) year general liability insurance premium is in the amount of $1,052,000;

(iii) For the policy year beginning December 30, 2025, our automobile insurance is a one (1) year policy. The one (1) year automobile insurance premium is in the amount of $223,000;

(iv) For the policy year beginning December 30, 2025, our property insurance is a one (1) year policy. The one (1) year property insurance premium is in the amount of $1,079,000;

(v) For the policy year beginning December 30, 2025, our excess liability insurance is a one (1) year policy. The one (1) year excess liability insurance premium is in the amount of $903,000;

(vi) For the policy year beginning December 30, 2025, our terrorism insurance is a one (1) year policy. The one (1) year terrorism insurance premium is in the amount of $19,000; and

(vii) For the policy year beginning December 30, 2025, our cyber security insurance is a one (1) year policy. The one (1) year cyber security insurance premium is in the amount of $31,000.

We paid the $3,855,000 annual premium amounts on January 15, 2026, which includes coverage for our franchises which are not included in our condensed consolidated financial statements.

(8) DEBT:

During the first quarter of our fiscal year 2026, we refinanced with our institutional lender, our mortgage loan encumbering the real property and improvements located at 12750 – 12790 S.W. 88th Street, Miami, Florida where our Flanigan’s Calusa Center and our limited partnership owned Flanigan’s Seafood Bar and Grill restaurant operate (Store #70), without increasing the principal amount borrowed at this time ($5,676,856). The refinanced 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 refinancing of this mortgage loan.

(9) COMMITMENTS AND CONTINGENCIES:

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 fourth 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 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. NetSuite began functioning as the Company’s general ledger system at the start of the fourth quarter of our fiscal year 2025.

Leases

To conduct certain of our operations, we lease restaurant and package liquor store space in South Florida from unrelated third parties. Our leases have remaining lease terms of up to 46 years, some of which include options to renew and extend the lease terms for up to an additional 24 years. We presently intend to renew some of the extension options available to us and for purposes of computing the right-of-use assets and lease liabilities required by ASC 842, we have incorporated into all lease terms which may be extended, an additional term of the lesser of (i) the amount of years the lease may be extended; or (ii) 15 years.

Common area maintenance and property taxes are not considered to be lease components. Variable lease costs include amounts based on a percentage of gross sales in excess of specified levels. They are recognized when probable and are not included in determining the present value of our operating lease liability.

The components of lease expense are as follows:

	(in thousands)
	13 Weeks		13 Weeks
	Ended December 27, 2025		Ended December 28, 2024
Operating Lease Expense, which is included in occupancy costs	$	1,010	$	990

Variable Lease Expense, which is included in occupancy costs	$	224	$	247

	(in thousands)
Classification on the Condensed Consolidated Balance Sheets	December 27, 2025		September 27, 2025

Assets
Operating lease assets	$	24,130	$	24,817

Liabilities
Operating lease current liabilities	$	2,757	$	2,704
Operating lease non-current liabilities	$	23,086	$	23,793

Weighted Average Remaining Lease Term:
Operating leases		9.28 Years		9.53 Years

Weighted Average Discount:
Operating leases		5.13%		5.13%

The following table outlines the minimum future lease payments for the next five years and thereafter:

	(in thousands)
For fiscal year	Operating
2026 (40 weeks remaining)	$	2,969
2027		3,840
2028		3,816
2029		3,836
2030		3,474
Thereafter		17,735

Total lease payments (undiscounted cash flows)		35,670
Less imputed interest		(9,827	)
Total operating lease liabilities	$	25,843

Litigation

Our sale of alcoholic beverages subjects us to “dram shop” statutes, which allow an injured person to recover damages from an establishment that served alcoholic beverages to an intoxicated person. If we receive a judgment substantially in excess of our insurance coverage or if we fail to maintain our insurance coverage, our business, financial condition, operating results or cash flows could be materially and adversely affected. We currently have no “dram shop” claims.

From time to time, we are a party to various other claims, legal actions and complaints arising in the ordinary course of our business, including claims resulting from “slip and fall” accidents, claims under federal and state laws governing access to public accommodations, employment-related claims and claims from guests alleging illness, injury or other food quality, health or operational concerns. It is our opinion, after consulting with legal counsel, that all such matters are without merit or involve such amounts that an unfavorable disposition, some of which is covered by insurance, would not have a material adverse effect on our financial position or results of operations.

(10) 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 order to ensure profitability is maximized. Gross profit is not shown on the Unaudited Condensed Consolidated Statements of Income but is a metric that CODM uses to assess segment performance and as such is included in the tables below. In computing operating income, none of the following items have been included: interest expense, other non-operating income and expenses and income taxes. Identifiable assets by segment are those assets that are used in our operations in each segment. Corporate assets are principally cash and real property, improvements, furniture, equipment and vehicles used at our corporate headquarters. We do not have any operations outside of the United States and transactions between restaurants and package liquor stores are not material. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. CODM analyzes each segment’s income from operations for making decisions regarding resource allocation. Information concerning the revenues and operating income for the quarters ended December 27, 2025 and December 28, 2024, and identifiable assets for the two reportable segments in which we operate, are shown in the following tables.

Thirteen Weeks Ended December 27, 2025

(in thousands)

	Restaurant			Package		Corporate			Eliminations			Total
REVENUES:
Restaurant food sales	$	30,932		$	—	$	—		$	—		$	30,932
Intersegment revenues		1,174			—		—			(1,174	)		—
Restaurant bar sales		7,855			—		—			—			7,855
Package goods sales		—			13,285		—			—			13,285
TOTAL REVENUE:		39,961			13,285		—			(1,174	)		52,072
COST OF MERCHANDISE SOLD:
Cost of merchandise sold:		12,951			9,965		—			—			22,916
Intersegment cost of merchandise sold		1,174			—		—			(1,174	)		—
TOTAL COST OF MERCHANDISE SOLD:		14,125			9,965		—			(1,174	)		22,916
GROSS PROFIT:		25,836			3,320		—			—			29,156

ADDITIONAL REVENUES:
Franchise-related revenues		—			—		438			—			438
Intersegment franchise-related revenues		—			—		1,466			(1,466	)		—
Intersegment partnership income		—			—		382			(382	)		—
Other revenues		42			—		16			—			58
TOTAL ADDITIONAL REVENUES:		42			—		2,302			(1,848	)		496

ADDITIONAL EXPENSES:
Payroll and related costs		13,646			962		1,763			—			16,371
Operating expenses		5,812			817		356			—			6,985
Intersegment operating expenses		637			—		757			(1,394	)		—
Occupancy costs		1,684			212		119			—			2,015
Intersegment occupancy costs		167			50		—			(217	)		—
Selling, general and administrative expenses		457			39		920			—			1,416
Intersegment selling, general and administrative expenses		—			—		72			(72	)		—
Depreciation and amortization		880			130		186			—			1,196
TOTAL ADDITIONAL EXPENSES:		23,283			2,210		4,173			(1,683	)		27,983

Income (Loss) from Operations		2,595			1,110		(1,871	)		(165	)		1,669

OTHER INCOME (EXPENSE):
Interest expense		—			—		(253	)		—			(253	)
Intersegment interest expense		—			—		(2	)		2			—
Interest and other income		—			25		43			—			68
Intersegment interest and other income		—			—		2			(2	)		—
Rental income		—			—		277			—			277
Intersegment rental income		—			—		217			(217	)		—
Rental expense		—			—		(134	)		—			(134	)
		—			25		150			(217	)		(42	)

Income (loss) before provision for income taxes:		2,595			1,135		(1,721	)		(382	)		1,627

Provision for income taxes		—			—		(128	)		—			(128	)

Net Income (Loss)		2,595			1,135		(1,849	)		(382	)		1,499

Less: Net Income attributable to noncontrolling interests		(694	)		—		—			—			(694	)

Net Income (Loss) Attributable to Flanigan’s Enterprises, Inc.	$	1,901		$	1,135	$	(1,849	)	$	(382	)	$	805

Thirteen Weeks Ended December 28, 2024

(in thousands)

	Restaurant		Package		Corporate			Eliminations			Total
REVENUES:
Restaurant food sales	$	29,126	$	—	$	—		$	—		$	29,126
Intersegment revenues		1,012		—		—			(1,012	)		—
Restaurant bar sales		7,962		—		—			—			7,962
Package goods sales		—		12,435		—			—			12,435
TOTAL REVENUE:		38,100		12,435		—			(1,012	)		49,523
COST OF MERCHANDISE SOLD:
Cost of merchandise sold:		13,029		9,481		—			—			22,510
Intersegment cost of merchandise sold		1,012		—		—			(1,012	)		—
TOTAL COST OF MERCHANDISE SOLD:		14,041		9,481		—			(1,012	)		22,510
GROSS PROFIT:		24,059		2,954		—			—			27,013

ADDITIONAL REVENUES:
Franchise-related revenues		—		—		431			—			431
Intersegment franchise-related revenues		—		—		1,441			(1,441	)		—
Intersegment partnership income		—		—		249			(249	)		—
Other revenues		32		—		9			—			41
TOTAL ADDITIONAL REVENUES:		32		—		2,130			(1,690	)		472

ADDITIONAL EXPENSES:
Payroll and related costs		13,122		902		1,722			—			15,746
Operating expenses		5,387		707		410			—			6,504
Intersegment operating expenses		614		—		755			(1,369	)		—
Occupancy costs		1,593		186		80			—			1,859
Intersegment occupancy costs		166		48		—			(214	)		—
Selling, general and administrative expenses		484		35		959			—			1,478
Intersegment selling, general and administrative expenses		—		—		72			(72	)		—
Depreciation and amortization		880		125		141			—			1,146

TOTAL ADDITIONAL EXPENSES:		22,246		2,003		4,139			(1,655	)		26,733

Income (Loss) from Operations		1,845		951		(2,009	)		(35	)		752

OTHER INCOME (EXPENSE):
Interest expense		—		—		(250	)		—			(250	)
Intersegment interest expense		—		—		(2	)		2			—
Interest and other income		4		16		39			—			59
Intersegment interest and other income		—		—		2			(2	)		—
Rental income		—		—		267			—			267
Intersegment rental income		—		—		214			(214	)		—
Rental expense		—		—		(161	)		—			(161	)
		4		16		109			(214	)		(85	)

Income (loss) before provision for income taxes:		1,849		967		(1,900	)		(249	)		667

Provision for income taxes		—

SEC Form 10-Q filed by Flanigan's Enterprises Inc.