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What changed in FLANIGANS ENTERPRISES INC's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of FLANIGANS ENTERPRISES INC's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+379 added−395 removedSource: 10-K (2023-12-29) vs 10-K (2022-01-14)

Top changes in FLANIGANS ENTERPRISES INC's 2023 10-K

379 paragraphs added · 395 removed · 249 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

85 edited+30 added−25 removed44 unchanged
Biggest changeWith the exception of “The Whale’s Rib”, a restaurant we operate but do not own, all of the restaurants operate under our service marks “Flanigan’s Seafood Bar and Grill” or “Flanigan’s” and all of the package liquor stores operate under our service marks “Big Daddy’s Liquors” or “Big Daddy’s Wine & Liquors.” TYPES OF UNITS FISCAL YEAR 2021 FISCAL YEAR 2020 Company-Owned: Combination package liquor store and restaurant 3 3 (1) Restaurant only 7 7 Package liquor store only 7 7 Company Managed Restaurants Only: Limited partnerships 8 8 Franchise 1 1 Unrelated Third Party 1 1 TOTAL – Company-Owned/Operated Units 27 27 Franchised Units 5 5 (2) ____________________ Notes: (1) During the first quarter of our fiscal year 2019, our combination package liquor store and restaurant located at 2505 N.
Biggest changeWith the exception of “The Whale’s Rib”, a restaurant we operate but do not own, and “Brendan’s Sports Pub” a restaurant/bar we own, all of the restaurants operate under our service marks “Flanigan’s Seafood Bar and Grill” or “Flanigan’s” and all of the package liquor stores operate under our service marks “Big Daddy’s Liquors” or “Big Daddy’s Wine & Liquors”.
In addition to our receipt of distributable amounts from the limited partnerships, we receive a fee equal to 3% of gross sales for use of our “Flanigan’s Seafood Bar and Grill” or “Flanigan’s” service marks, which use is authorized while we act as general partner only.
In addition to receipt of distributable amounts from the limited partnerships, we receive a fee equal to 3% of gross sales for use of our service marks “Flanigan’s Seafood Bar and Grill” or “Flanigan’s”, which use is authorized while we act as general partner only.
This limited partnership has returned to its investors all of their initial cash invested and we receive an annual management fee equal to one-half (½) of the cash available for distribution by this limited partnership.
This limited partnership has returned to its investors all of their initial cash invested and we receive an annual management fee equal to one-half (½) of the cash available for distribution by this limited partnership.
This limited partnership has returned to its investors all of their initial cash invested and we receive an annual management fee equal to one-half (½) of the cash available for distribution by this limited partnership.
This limited partnership has returned to its investors all of their initial cash invested and we receive an annual management fee equal to one-half (½) of the cash available for distribution by this limited partnership.
This limited partnership has returned to its investors all of their initial cash invested and we receive an annual management fee equal to one-half (½) of the cash available for distribution by this limited partnership.
This limited partnership has returned to its investors all of their initial cash invested and we receive an annual management fee equal to one-half (½) of the cash available for distribution by this limited partnership.
This limited partnership has returned to its investors all of their initial cash invested and we receive an annual management fee equal to one-half (½) of the cash available for distribution by this limited partnership.
This limited partnership has returned to its investors all of their initial cash invested and we receive an annual management fee equal to one-half (½) of the cash available for distribution by this limited partnership.
This limited partnership has returned to its investors all of their initial cash invested and we receive an annual management fee equal to one-half (½) of the cash available for distribution by this limited partnership.
This limited partnership has returned to its investors all of their initial cash invested and we receive an annual management fee equal to one-half (½) of the cash available for distribution by this limited partnership.
This limited partnership has returned to its investors all of their initial cash invested and we receive an annual management fee equal to one-half (½) of the cash available for distribution by this limited partnership.
This limited partnership has returned to its investors all of their initial cash invested and we receive an annual management fee equal to one-half (½) of the cash available for distribution by this limited partnership.
We negotiate short and long term agreements for certain of our principal food product requirements , depending on market conditions and expected demand. We evaluate the possibility of entering into arrangements to assist us in managing risk and variability associated with the supply and demand of food products.
We negotiate short-term and long-term agreements for certain of our principal food product requirements, depending on market conditions and expected demand. We evaluate the possibility of entering into arrangements to assist us in managing risk and variability associated with the supply and demand of food products.
Two of the three remaining franchised package liquor stores are franchised to members of the family of our Chairman of the Board, officers and/or directors. We have not entered into a franchise arrangement for either a package liquor store, restaurant or combination package liquor store/restaurant since 1986 and do not anticipate that we will do so in the foreseeable future.
Two of the three franchised package liquor stores are franchised to members of the family of our Chairman of the Board, officers and/or directors. We have not entered into a franchise arrangement for either a package liquor store, restaurant or combination package liquor store/restaurant since 1986 and do not anticipate that we will do so in the foreseeable future.
Florida 100 CIC Investors #13, Limited Partnership Florida 45 CIC Investors #25, Limited Partnership Florida 100 CIC Investors #50, Limited Partnership Florida 24 CIC Investors #55, Limited Partnership Florida 49 CIC Investors #60, Limited Partnership Florida 46 CIC Investors #65, Limited Partnership Florida 28 CIC Investors #70, Limited Partnership Florida 41 CIC Investors #80, Limited Partnership Florida 27 CIC Investors #85, Limited Partnership Florida 100 CIC Investors #90, Limited Partnership Florida 5 Josar Investments, LLC Florida 100 Flanigan’s Calusa Center, LLC Florida 100 Flanigan’s Fish Company, LLC Florida 51 2 Table of Contents Package Liquor Store Operations Our package liquor stores emphasize high volume business by providing customers with a wide selection of brand name and private label liquors, beers and wines while offering competitive pricing by meeting the published sales prices of our competitors.
Florida 100 CIC Investors #13, Limited Partnership Florida 45 CIC Investors #25, Limited Partnership Florida -- CIC Investors #50, Limited Partnership Florida 24 CIC Investors #55, Limited Partnership Florida 49 CIC Investors #60, Limited Partnership Florida 46 CIC Investors #65, Limited Partnership Florida 28 CIC Investors #70, Limited Partnership Florida 41 CIC Investors #80, Limited Partnership Florida 27 CIC Investors #85, Limited Partnership Florida 7 CIC Investors #90, Limited Partnership Florida 5 Josar Investments, LLC Florida 100 Flanigan’s Calusa Center, LLC Florida 100 Flanigan’s Fish Company, LLC Florida 51 2 Package Liquor Store Operations Our package liquor stores emphasize high volume business by providing customers with a wide selection of brand name and private label liquors, beers and wines while offering competitive pricing by meeting the published sales prices of our competitors.
If we are unable to retain qualified restaurant management and operating personnel in an increasingly competitive market, we may be unable to effectively operate and grow our business and revenues, which could materially adversely affect our financial performance. Development and Training We invest resources to ensure our staff receive training in order to maximize their potential.
If we are unable to hire or retain qualified restaurant management and operating personnel in an increasingly competitive market, we may be unable to effectively operate and grow our business and revenues, which could materially adversely affect our financial performance. Development and Training We invest resources to ensure our staff receive training in order to maximize their potential.
We believe that the principal means of competition among package liquor stores is price and that, in general, the principal means of competition among restaurants include the location, type and quality of facilities and the type, quality and price of beverage and food served. Our package liquor stores compete directly or indirectly with local retailers and discount "superstores".
We believe that the principal means of competition among package liquor stores is price and that, in general, the principal means of competition among restaurants include the location, type and quality of facilities and the type, quality and price of beverage and food served. Our package liquor stores compete directly or indirectly with local retailers and discount “superstores”.
In addition to being a limited partner in these limited partnerships, we are the sole general partner of eight of these limited partnerships and manage and control the operations of these restaurants. We are only a limited partner in the limited partnership which owns and operates the restaurant located in Fort Lauderdale, Florida.
In addition to being a limited partner in these limited partnerships, we are the sole general partner of ten of these limited partnerships and manage and control the operations of these restaurants. We are only a limited partner in the limited partnership which owns and operates the restaurant located in Fort Lauderdale, Florida.
Under our current liability insurance policy, certain expenses incurred in defending a claim, including attorney's fees, are a part of our $10,000 deductible. In accordance with accounting guidance, we accrue for any liability by recognizing costs when it is probable that a covered liability has been incurred and the cost can be reasonably estimated.
Under our current liability insurance policy, certain expenses incurred in defending a claim, including attorney's fees, are a part of our $10,000 deductible and/or our self-insured retention. In accordance with accounting guidance, we accrue for any liability by recognizing costs when it is probable that a covered liability has been incurred and the cost can be reasonably estimated.
Many of our locations participate voluntarily in a Tip Reporting Alternative Commitment (“TRAC”) agreement with the Internal Revenue Service (“IRS”). By complying with the educational and other requirements of the TRAC agreement, we reduce the likelihood of potential employer-only FICA tax assessments for unreported or underreported tips.
Many of our locations participate voluntarily in a Tip Reporting Alternative Commitment (“TRAC”) agreement with the Internal Revenue Service (“IRS”). By complying with the educational and other requirements of the TRAC agreement, we reduce the likelihood of potential employer-only FICA (Federal Insurance Contributions Act) tax assessments for unreported or underreported tips.
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 us allow the sale of liquor for on premises consumption only.
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 us allow the sale of liquor for on premises consumption only, (the “4 COP SFS Liquor License”).
Due to the competitive nature of the liquor industry in South Florida, we have had to adjust our pricing to stay competitive, including meeting all competitors’ advertisements. Such practices will continue in the package liquor business.
Due to the competitive nature of the liquor industry in South Florida, we have had to adjust our pricing to stay competitive, including meeting all competitors’ advertisements subject to certain limitations. Such practices will continue in the package liquor business.
This unit is included in the table both as a franchised restaurant as well as a Company-operated restaurant. 1 Table of Contents History and Development of Our Business We were incorporated in Florida in 1959 and commenced operating as a chain of small cocktail lounges and package liquor stores throughout South Florida.
This unit is included in the table both as a franchised restaurant, as well as a restaurant operated by us. 1 History and Development of Our Business We were incorporated in Florida in 1959 and commenced operating as a chain of small cocktail lounges and package liquor stores throughout South Florida.
Our package liquor stores emphasize high volume business by providing customers with a wide variety of brand name and private label merchandise at discount prices. Our restaurants offer alcoholic beverages and full food service with abundant portions and reasonable prices, served in a relaxed, friendly and casual atmosphere.
Our package liquor stores emphasize high volume business by providing customers with a wide variety of brand name and private label merchandise at discount prices. Our restaurants and our new sports bar establishment offer alcoholic beverages and food service with abundant portions and reasonable prices, served in a relaxed, friendly and casual atmosphere.
Entity State Of Organization Percentage Owned Flanigan’s Management Services, Inc. Florida 100 Flanigan’s Enterprises, Inc. of Georgia Georgia 100 Flanigan’s Enterprises, Inc. of Pa. Pennsylvania 100 Flanigan’s Enterprises of N. Miami, Inc.
Entity State Of Organization Percentage Owned Flanigan’s Management Services, Inc. Florida 100 Flanigan’s Enterprises, Inc. of Georgia Georgia 100 Flanigan’s Enterprises of N. Miami, Inc.
Kastner Chief Financial Officer, General Counsel and Secretary 68 (2) Christopher O’Neil Vice President of Package Operations 56 2016 ---------------- (1) Chairman of the Board of Directors, Chief Executive Officer since 2005; President since 2002. (2) Chief Financial Officer since 2004; Secretary since 1995; and General Counsel since 1982.
Kastner Chief Financial Officer, General Counsel and Secretary 70 (2) Christopher O’Neil Vice President of Package Operations 58 2016 (1) Chairman of the Board of Directors, Chief Executive Officer since 2005; President since 2002. (2) Chief Financial Officer since 2004; Secretary since 1995; and General Counsel since 1982.
If maturity of the Institutional Loans were accelerated, it would have a material adverse impact on our consolidated financial statements and results of operations. General Liability Insurance We have general liability insurance which incorporates a deductible of $10,000 per occurrence for both us and the limited partnerships.
If maturity of the Institutional Loans were accelerated, it would have a material adverse impact on our consolidated financial statements and results of operations. General Liability Insurance For the policy year beginning December 30, 2022, we have general liability insurance which incorporates a deductible of $10,000 per occurrence for both us and the limited partnerships.
Government Regulation Our operations are subject to various federal, state and local laws affecting our business. In particular, our operations are subject to regulation by federal agencies and to licensing and regulation by state and local health, food preparation and safety, sanitation, alcoholic beverage control, safety and fire department agencies in the state or municipality where our units are located.
In particular, our operations are subject to regulation by federal agencies and to licensing and regulation by state and local health, food preparation and safety, sanitation, alcoholic beverage control, safety and fire department agencies in the state or municipality where our units are located.
We arrange for independent third parties, or "shoppers", to inspect each unit in order to evaluate the unit's operations, including the handling of cash transactions. 7 Table of Contents Purchasing and Inventory The package liquor business requires a constant substantial capital investment in inventory in the units.
We arrange for independent third parties, or "shoppers", to inspect each unit in order to evaluate the unit's operations, including the handling of cash transactions. Purchasing and Inventory The package liquor business requires a constant substantial capital investment in inventory at the stores.
Our operations are supervised by supervisors, who visit units to provide on-site management and support. There are three supervisors responsible for package liquor store operations and six supervisors responsible for restaurant operations. All of our managers and salespersons receive extensive training in sales techniques.
Our operations are supervised by supervisors, who visit all Company, limited partnership and franchise owned units and the managed unit to provide on-site management and support. There are three supervisors responsible for package liquor store operations and six supervisors responsible for restaurant operations. All of our managers and salespersons receive extensive training in sales techniques.
BUSINESS General As of October 2, 2021, Flanigan’s Enterprises, Inc., a Florida corporation, together with its subsidiaries (“we”, “our”, “ours” and “us” as the context requires), (i) operates 27 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) franchises an additional five units, consisting of two restaurants (one of which we operate) and three combination restaurants/package liquor stores.
BUSINESS General As of September 30, 2023, Flanigan’s Enterprises, Inc., a Florida corporation, together with its subsidiaries (“we”, “our”, “ours” and “us” as the context requires), (i) operates 31 units, consisting of restaurants, package liquor stores, combination restaurant/package liquor stores and a sports bar that we either own or have operational control over and partial ownership in; and franchises an additional five units, consisting of two restaurants (one of which we operate) and three combination restaurant/package liquor stores.
We periodically donate philanthropic organizations through campaigns designed to engage our staff company-wide service programs, as follows: · Breast Cancer Awareness – We donate $10,000 to local Breast Cancer Support organizations. · Donated over $100,000 to HOPE mission over five years through our Flanigan’s Rockin’ Rib Run.
We periodically donate to philanthropic organizations through campaigns designed to engage our staff company-wide service programs, as follows: ● Breast Cancer Awareness – We donate $10,000 annually to local Breast Cancer Support organizations. ● Donated over $100,000 to HOPE mission.
The table below provides information concerning the type (i.e. restaurant, package liquor store or combination restaurant/package liquor store) and ownership of the units (i.e. whether (i) we own 100% of the unit; (ii) the unit is owned by a limited partnership of which we are the sole general partner and/or have invested in; or (iii) the unit is franchised by us), as of October 2, 2021 and as compared to October 3, 2020.
The table below provides information concerning the type (i.e. restaurant, sports bar, package liquor store or combination restaurant/package liquor store) and ownership of the units (i.e. whether (i) we own 100% of the unit; (ii) the unit is owned by a limited partnership of which we are the sole general partner and/or have invested in; or (iii) the unit is franchised by us), as of September 30, 2023 and as compared to October 1, 2022.
In March 1985, we began franchising package liquor stores and lounges in the South Florida area. See Note 16 to the consolidated financial statements and the discussion of franchised units on page 8.
In March 1985, we began franchising package liquor stores and lounges in the South Florida area. (See Note 14 to the consolidated financial statements and the discussion of franchised units on pages 3 and 4).
Because the total number of liquor licenses available under a quota license system is limited and restrictions are placed upon their transfer, the licenses have purchase and resale value based upon supply and demand in the particular areas in which they are issued. The quota licenses held by us allow the sale of liquor for on and off premises consumption.
Because the total number of liquor licenses available under a quota license system is limited and restrictions are placed upon their transfer, the licenses have purchase and resale value based upon supply and demand in the particular areas in which they are issued.
Giving Back Another key aspect of our culture is giving back to the communities where our staff live and work, and uniting our staff members around charitable causes personal to them.
We consider our labor relations to be favorable. 8 Giving Back Another key aspect of our culture is giving back to the communities where our staff live and work, and uniting our staff members around charitable causes personal to them.
During our fiscal year 1987, we began renovating our lounges to provide full restaurant food service, and subsequently renovated and added food service to most of our lounges. Food sales currently represent approximately 80.2% and bar sales approximately 19.8% of our total restaurant sales.
During our fiscal year 1987, we began renovating our lounges to provide full restaurant food service, and subsequently renovated and added food service to most of our lounges. Food sales currently represent approximately 78.71% and bar sales approximately 21.29% of our total restaurant sales.
This limited partnership has returned to its investors all of their initial cash invested and we receive an annual management fee equal to one-half (1/2) of the cash available for distribution by this limited partnership. 5 Table of Contents Pinecrest, Florida We are the sole general partner and 45% limited partner in this limited partnership which has owned and operated a restaurant in Pinecrest, Florida under our “Flanigan’s Seafood Bar and Grill” service mark since August 14, 2006. 20.2% of the remaining limited partnership interest is owned by persons who are either our officers, directors or their family members.
This limited partnership has returned to its investors all of their initial cash invested and we receive an annual management fee equal to one-half (½) of the cash available for distribution by this limited partnership. 4 Wellington, Florida We are the sole general partner and a 28% limited partner in this limited partnership which has owned and operated a restaurant in Wellington, Florida under our “Flanigan’s Seafood Bar and Grill” service mark since May 27, 2005. 22.4% of the remaining limited partnership interest is owned by persons who are either our officers, directors or their family members.
We give out approximately 30,000 awards every year. · Fishing Tournaments/Marine Conservation – We donate to fishing tournaments and beach cleanup projects. · Supporting the local community – We donate funds to boy scouts, baseball teams, schools, etc. · Habitat for Humanity – We have sponsored multiple home building projects through Habitat for Humanity. · Sheridan House – We donated 500 backpacks to underprivileged children.
We give out approximately 50,000 awards every year. ● Fishing Tournaments/Marine Conservation – We donate to fishing tournaments and beach cleanup projects. ● Supporting the local community – We donate funds to boy scouts, baseball teams, schools, etc. ● Sheridan House – We donated 500 backpacks to underprivileged children.
Wellington, Florida We are the sole general partner and a 28% limited partner in this limited partnership which has owned and operated a restaurant in Wellington, Florida under our “Flanigan’s Seafood Bar and Grill” service mark since May 27, 2005. 22.4% of the remaining limited partnership interest is owned by persons who are either our officers, directors or their family members.
Pinecrest, Florida We are the sole general partner and 45% limited partner in this limited partnership which has owned and operated a restaurant in Pinecrest, Florida under our “Flanigan’s Seafood Bar and Grill” service mark since August 14, 2006. 20.2% of the remaining limited partnership interest is owned by persons who are either our officers, directors or their family members.
Our ability to attract highly-motivated staff members and retain an engaged, experienced team is key to successful execution of our strategy. We are currently operating in a competitive labor environment.
Human Capital We depend on our staff members to successfully execute all aspects of our day-to-day operations. Our ability to attract highly motivated staff members and retain an engaged, experienced team is key to successful execution of our strategy. We are currently operating in a competitive labor environment.
We own and operate nine package liquor stores in the South Florida area under the name “Big Daddy’s Liquors” or “Big Daddy’s Wine & Liquors”, two of which are jointly operated with restaurants we own. Franchised Package Liquor Stores .
As of our fiscal year ended September 30, 2023, we own and operate eleven package liquor stores in the South Florida area under the name “Big Daddy’s Liquors” or “Big Daddy’s Wine & Liquors”, two of which are jointly operated with restaurants we own. Franchised Package Liquor Stores .
We anticipate that we will continue to form limited partnerships to raise funds to own and operate restaurants under our service marks “Flanigan’s Seafood Bar and Grill” or “Flanigan’s” using the same or substantially similar financial arrangements. 4 Table of Contents Below is information on the nine limited partnerships which own and operate “Flanigan’s Seafood Bar and Grill” or “Flanigan’s” restaurants: Surfside, Florida We are the sole general partner and a 46% limited partner in this limited partnership which has owned and operated a restaurant in Surfside, Florida under our “Flanigan’s Seafood Bar and Grill” service mark since March 6, 1998. 33.3% of the remaining limited partnership interest is owned by persons who are either our officers, directors or their family members.
Below is information on the eleven limited partnerships which own and operate “Flanigan’s Seafood Bar and Grill” or “Flanigan’s” restaurants: Surfside, Florida We are the sole general partner and a 46% limited partner in this limited partnership which has owned and operated a restaurant in Surfside, Florida under our “Flanigan’s Seafood Bar and Grill” service mark since March 6, 1998. 33.3% of the remaining limited partnership interest is owned by persons who are either our officers, directors or their family members.
Restaurants Owned by Affiliated Limited Partnerships We have invested along with others, (some of whom are or are affiliated with our officers and directors), in nine limited partnerships which currently own and operate nine South Florida based restaurants under our service mark “Flanigan’s Seafood Bar and Grill”.
Franchise royalties we receive are recognized as revenue when sales are made by franchisees. 3 Restaurants Owned by Affiliated Limited Partnerships We have invested along with others, (some of whom are or are affiliated with our officers and directors), in eleven limited partnerships which currently own and operate eleven South Florida based restaurants under our service mark “Flanigan’s Seafood Bar and Grill”.
We also believe our sustainability programs and initiatives like restaurant-based composting and recycling and replacing our off-premise packaging with materials that reduce the use of plastics and improve recyclability serve to foster pride in our staff.
We also collect and donate school supplies annually. ● Reclaimed Wood – All of our locations use reclaimed wood on interior walls. We also believe our sustainability programs and initiatives like restaurant-based composting and recycling and replacing our off-premise packaging with materials that reduce the use of plastics and improve recyclability serve to foster pride in our staff.
During our fiscal years ended October 2, 2021 and October 3, 2020, the Board of Directors approved discretionary matching contributions totaling $59,000 and $81,000, respectively. Coronavirus Pandemic In March 2020, a novel strain of coronavirus was declared a global pandemic and a National Public Health Emergency.
During our fiscal years ended September 30, 2023 and October 1, 2022, the Board of Directors approved discretionary matching contributions totaling $70,000 and $71,000, respectively. Coronavirus Pandemic In March 2020, a novel strain of coronavirus was declared a global pandemic and a National Public Health Emergency.
We are in discussions to secure property insurance for the period commencing after the expiration of the current policy on December 30, 2021. For property losses caused by windstorm, the property insurance has a fixed deductible of $100,000, plus 5% of all insured losses, per occurrence.
For property losses caused by windstorm, the property insurance has a fixed deductible of $100,000, plus 5% of all insured losses, per occurrence. For all other property losses, the property insurance has deductibles of $10,000 per location, per occurrence. We secured property insurance for the period commencing after the expiration of the current policy on December 30, 2023.
To mitigate business interruptions, we utilize a data backup and replication infrastructure between our onsite and external data centers, so all data is replicated nightly between the sites. We require cybersecurity awareness training for all staff members with access to our cyber systems. We also maintain cyber risk insurance coverage to further reduce our risk profile.
All of our core and critical applications are backed up to external data centers. To mitigate business interruptions, we utilize a data backup and replication infrastructure between our onsite and external data centers, so all data is replicated nightly between the sites. We require cybersecurity awareness training for all staff members with access to our cyber systems.
We attempt to provide a robust suite of benefits and wellness offerings. Employee Engagement Listening to our staff members is an essential part of building an engaged workforce, and we provide avenues for staff to share their ideas and concerns. As of our fiscal year end 2021, we employed 1,555 persons, of which 665 were full-time and 890 were part-time.
Employee Engagement Listening to our staff members is an essential part of building an engaged workforce, and we provide avenues for staff to share their ideas and concerns. As of our fiscal year end 2023, we employed 1,855 persons, of which 707 were full-time and 1,148 were part-time.
During the third quarter of our fiscal year 2020, we, certain of the entities owning the limited partnership stores (the “LP’s”), franchised stores (the “Franchisees”) as well as the store we manage but do not own (the “Managed Store”), (collectively, the “Borrowers”), applied for and received loans from an unrelated third party lender pursuant to the Paycheck Protection Program (the “PPP”) under the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) enacted March 27, 2020, in the aggregate principal amount of approximately $13.1 million, (the “PPP Loans”), of which approximately: (i) $5.9 million was loaned to us; (ii) $4.1 million was loaned to eight of the LP’s; (iii) $2.6 million was loaned to five of the Franchisees; and (iv) $0.5 million was loaned to the Managed Store.
During the second quarter of our fiscal year 2021, certain of the entities owning the limited partnership stores (the “LP’s”), as well as the store we manage but do not own (the “Managed Store”), applied for and received loans from an unrelated third party lender pursuant to the Paycheck Protection Program (the “PPP”) under the United States Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) enacted March 27, 2020, in the aggregate principal amount of approximately $3.98 million, (the “2 nd PPP Loans”), of which approximately: (i) $3.46 million was loaned to six of the LP’s; and (ii) $0.52 million was loaned to the Managed Store.
The other liquor licenses held by us or limited partnerships of which we are the general partner, are restaurant liquor licenses, which do not have quota restrictions or purchase or resale value.
The quota licenses held by us allow the sale of liquor for on and off premises consumption (the “4 COP Quota Liquor License”). The other liquor licenses held by us or limited partnerships of which we are the general partner, are restaurant liquor licenses, which do not have quota restrictions or purchase or resale value.
Of these, 51 were employed at our corporate offices in administrative capacities and 12 were employed in maintenance. Of the remaining employees, 58 were employed in our package liquor stores and 1,434 in our restaurants. None of our employees are represented by collective bargaining organizations. We consider our labor relations to be favorable.
Of these, 57 were employed at our corporate offices in administrative capacities and 12 were employed in maintenance. Of the remaining employees, 74 were employed in our package liquor stores and 1,712 in our restaurants. None of our employees are represented by collective bargaining organizations.
As of October 2, 2021, we are in compliance with the financial covenants contained in our loans with our unrelated third party institutional lender (the “Institutional Lender”) under which we owe in the aggregate, approximately $17,096,000 (the “Institutional Loans”).
As of September 30, 2023, we are in compliance with the financial covenants contained in our loans with our unrelated third-party institutional lender (the “Institutional Lender”) under which we owe in the aggregate, approximately $21,610,000 (the “Institutional Loans”) of our total loans of approximately $23,128,000.
This limited partnership has returned to its investors all cash invested, but since we are not the general partner of this limited partnership, we do not receive an annual management fee. We have a franchise arrangement with this limited partnership and for accounting purposes, we do not consolidate the operations of this limited partnership into our operations.
This limited partnership has returned to its investors all cash invested, but since we are not the general partner of this limited partnership, we do not receive an annual management fee.
Our operations are also subject to federal and state laws governing such matters as wages, working conditions, citizenship requirements and overtime. Significant numbers of hourly personnel at our restaurants are paid at rates related to the federal or Florida minimum wage, whichever is higher, and accordingly, increases in the minimum wage will increase labor costs.
Significant numbers of hourly personnel at our restaurants are paid at rates related to the federal or Florida minimum wage, whichever is higher, and accordingly, increases in the minimum wage will increase labor costs.
Property Insurance; Windstorm Insurance; Deductibles For the policy year beginning December 30, 2021, our property insurance is a one (1) year policy with an unaffiliated third party insurance carrier, including coverage for properties leased by us and our consolidated limited partnerships, and provides for full insurance coverage for property losses, including those caused by windstorm, such as a hurricane.
A significant unfavorable judgment or settlement against us in excess of our liability insurance coverage could have a materially adverse effect on the Company. 10 Property Insurance; Windstorm Insurance; Deductibles For the policy year beginning December 30, 2022, our property insurance is a one (1) year policy with an unaffiliated third party insurance carrier, including coverage for properties leased by us and our consolidated limited partnerships, and provides for full insurance coverage for property losses, including those caused by windstorm, such as a hurricane.
However, in view of the number of jurisdictions in which we conduct 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. Human Capital We depend on our staff members to successfully execute all aspects of our day-to-day operations.
However, in view of the number of local jurisdictions within the State of Florida in which we conduct 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.
For accounting purposes, we do not consolidate the revenue and expenses of our franchisees’ operations with our revenue and expenses. Franchise royalties we receive are “earned” when sales are made by franchisees.
For accounting purposes, we do not consolidate the revenue and expenses of our franchisees’ operations with our revenue and expenses. Franchise royalties we receive are recognized as revenue when sales are made by franchisees. Restaurant Operations Our restaurants provide a neighborhood casual, standardized dining experience, typical of casual restaurant chains.
University Drive, Hollywood, Florida (Store #19) was damaged by a fire which has caused it to be closed since the first quarter of our fiscal year 2019. Revenues and expenses from Store #19 for the time Store #19 was open during the first quarter of our fiscal year 2019 (two (2) days) are immaterial, with the exception of payroll.
University Drive, Hollywood, Florida (Store #19), was damaged by a fire which has caused it to be closed since the first quarter of our fiscal year 2019.
Accordingly, our annual insurance costs may be subject to adjustment from previous estimates as facts and circumstances change. Our accruals are included in the accompanying consolidated balance sheets in the caption "Accounts payable and accrued expenses". A significant unfavorable judgment or settlement against us in excess of our liability insurance coverage could have a materially adverse effect on the Company.
Accordingly, our annual insurance costs may be subject to adjustment from previous estimates as facts and circumstances change. Our accruals are included in the accompanying consolidated balance sheets in the caption "Accounts payable and accrued expenses".
We are also subject to laws relating to information security, privacy, cashless payments and consumer credit protection and fraud. We are not aware of any statute, ordinance, rule or regulation under present consideration which would significantly limit or restrict our business as now conducted.
We are not aware of any statute, ordinance, rule or regulation under present consideration which would significantly limit or restrict our business as now conducted.
Our training programs allow us to fill certain of our management positions with internal candidates. 10 Table of Contents Benefits and Wellness We believe access to healthcare is a compelling benefit for many staff members and we offer healthcare benefits to our hourly staff members who work a minimum of 30 hours per week, on average.
Benefits and Wellness We believe access to healthcare is a compelling benefit for many staff members and we offer healthcare benefits to our hourly staff members who work a minimum of 30 hours per week, on average. We attempt to provide a robust suite of benefits and wellness offerings.
The PPP Loans to the Franchisees and the Managed Store are not included in our consolidated financial statements.
The 2 nd PPP Loan to the Managed Store is not included in our consolidated financial statements.
Our insurance carrier is responsible for $1,000,000 coverage per occurrence above our deductible, up to a maxi mum aggregate of $2,000,000 per year. During our fiscal year 2021, we were able to purchase excess liability insurance at a reasonable premium, whereby our excess insurance carrier is responsible for $10,000,000 coverage above our primary general liability insurance coverage.
We were also able to purchase excess liability insurance at a reasonable premium, whereby our excess insurance carrier is responsible for $10,000,000 coverage above our primary general liability insurance coverage. We are uninsured against liability claims in excess of $11,000,000 per occurrence and in the aggregate.
Each restaurant and package liquor store has a private high-speed wide area connection to send and receive critical business data as well as to access web-based applications securely as well as a failover capability. All of our core and critical applications are backed up to external data centers.
Restaurant and package liquor store hardware and software support is provided by both our internal support services team as well as third-party vendors. Each restaurant and package liquor store has a private high-speed wide area connection to send and receive critical business data as well as to access web-based applications securely as well as a failover capability.
We are in discussions to secure general liability and excess liability insurance for the period commencing after the expiration of the current policies on December 30, 2021. 13 Table of Contents Our 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.
(See Item 2. Subsequent Events for a discussion of general liability and excess liability insurance for the period commencing December 30, 2023 on page 31.) Our 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 novel coronavirus pandemic and related suggested and mandated social distancing and “shelter-in-place” orders and other governmental mandates relating thereto (collectively, “COVID-19”) caused significant disruptions to our business, adversely affected and will, in all likelihood continue to adversely affect, our restaurant operations and financial results for the foreseeable future.
The novel coronavirus pandemic, (“COVID-19”) adversely affected and will, in all likelihood continue to adversely affect our restaurant operations and financial results for the foreseeable future.
As the sale of alcoholic beverages constitutes a large share of our revenue, the failure to receive or retain, or a delay in obtaining a liquor license in a particular location could adversely affect our operations in that location and could impair our ability to obtain licenses elsewhere. 9 Table of Contents During our fiscal years 2021 and 2020, no significant pending matters have been initiated concerning any of our licenses which might be expected to result in a revocation of a liquor license or other significant actions against us.
As the sale of alcoholic beverages constitutes a large share of our revenue, the failure to receive or retain, or a delay in obtaining a liquor license in a particular location could adversely affect our operations in that location and could impair our ability to obtain licenses elsewhere.
Trade Names We operate our package liquor stores and restaurants under the service marks; "Big Daddy's Liquors", “Big Daddy’s Wine & Liquors”, "Flanigan's Seafood Bar and Grill", and “Flanigan’s”.
Our business is subject to seasonal effects, including that liquor purchases tend to increase during the holiday seasons. Trade Names We operate our package liquor stores and restaurants under the service marks; "Big Daddy's Liquors", “Big Daddy’s Wine & Liquors”, “Flanigan’s Seafood Bar and Grill", and “Flanigan’s”. We operate our sports bar under the service mark; “Brendan’s Sports Pub”.
The standard symbolic trademark associated with our facilities and operations 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 us.
The face comprising this trademark is that of the Company’s founder, Joseph "Big Daddy" Flanigan, and is a federally registered trademark owned by us.
Flanigan Chairman of the Board of Directors, Chief Executive Officer and President 57 (1) August Bucci Chief Operating Officer and Executive Vice President 77 2002 Jeffrey D.
Executive Officers Name Positions and Offices Currently Held Age Office or Position Held Since James G. Flanigan Chairman of the Board of Directors, Chief Executive Officer and President 59 (1) August Bucci Chief Operating Officer and Executive Vice President 79 2002 Jeffrey D.
In addition, we strive to provide our staff with career advancement opportunities.
In addition, we strive to provide our staff with career advancement opportunities. Our training programs allow us to fill certain of our management positions with internal candidates.
We do not believe COVID-19 has had a material adverse effect on our access to supplies or labor, although there can be no assurance that there will not be a significant adverse impact on our supply chain or access to labor in the future.
During the first quarter of our fiscal year 2022, we applied for and received forgiveness of the entire amount of principal and accrued interest for all 2 nd PPP Loans, including the Managed Store. 9 COVID-19 has had a material adverse effect on our access to supplies or labor and there can be no assurance that there will not be a significant adverse impact on our supply chain or access to labor in the future.
Management Agreement for “The Whale’s Rib” Restaurant Since January 2006, we have managed “The Whale’s Rib”, a casual dining restaurant located in Deerfield Beach, Florida, pursuant to a management agreement. We paid $500,000 in exchange for our rights to manage this restaurant. The restaurant is owned by a third party unaffiliated with us.
We have a franchise arrangement with this limited partnership and for accounting purposes, we do not consolidate the operations of this limited partnership into our operations. 5 Management Agreement for “The Whale’s Rib” Restaurant Since January 2006, we have managed “The Whale’s Rib”, a casual dining restaurant located in Deerfield Beach, Florida, pursuant to a management agreement.
Operations and Management We emphasize systematic operations and control of all package liquor stores and restaurants regardless of whether we own, franchise or manage the unit.
For our fiscal years ended September 30, 2023 and October 1, 2022, we generated $400,000 of revenue each fiscal year from providing these management services. Operations and Management We emphasize systematic operations and control of all package liquor stores and restaurants regardless of whether we own, franchise or manage the unit.
In order to fix the cost and ensure adequate supply of baby back ribs for our restaurants, on November 9, 2020, we entered into a purchase agreement with our current rib supplier, whereby we agreed to purchase approximately $6,420,000 of baby back ribs during calendar year 2021 from this vendor at a fixed cost.
In order to fix the cost and ensure adequate supply of baby back ribs for our restaurants for calendar years 2023 and 2024, we entered into purchase agreements with our current rib supplier, whereby we agreed to purchase approximately $6.8 million and $7.0 million of “2.25 & Down Baby Back Ribs” (industry jargon for the weight range in which slabs of baby back ribs are sold) from this vendor during calendar years 2023 and 2024 respectively, at prescribed costs, which we believe are competitive.
We are subject to “dram-shop” statutes due to our restaurant operations. These statutes generally provide a person injured by an intoxicated person the right to recover damages from an establishment that wrongfully served alcoholic beverages to the intoxicated individual.
These statutes generally provide a person injured by an intoxicated person the right to recover damages from an establishment that wrongfully served alcoholic beverages to the intoxicated individual. We carry liquor liability coverage as part of our existing comprehensive general liability insurance, which we believe is consistent with coverage carried by other entities in the restaurant industry.
Security of our financial data and other sensitive information remains a high priority for us, led by our information technology department. In an effort to further secure our customers’ credit card information, we employ an encryption and tokenization platform for all credit card transactions in our restaurants, ensuring no credit card data is stored in our internal systems.
In an effort to further secure our customers’ credit card information, we employ an encryption and tokenization platform for all credit card transactions in our restaurants, ensuring no credit card data is stored in our internal systems. We also transact business through online ordering for both our restaurants and package liquor stores through third party vendors. (See Item 1A.
While we anticipate purchasing all of our rib supply from this vendor, we believe there are several other alternative vendors available, if needed. 8 Table of Contents Information Technology Our restaurant and package liquor store point of sale and back-office systems provide information regarding daily sales, cash receipts, inventory, food and beverage costs, labor costs and other controllable operating expenses.
Information Technology Our restaurant and package liquor store point-of-sale and back-office systems provide information regarding daily sales, cash receipts, inventory, food and beverage costs, labor costs and other controllable operating expenses. Our restaurants and package liquor stores offer online ordering for to-go sales and our package liquor stores also offer delivery services by third-party vendors.
In exchange for providing management, bookkeeping and related services, we receive one-half (½) of the net profit, if any, from the operation of the restaurant. For our fiscal years ended October 2, 2021 and October 3, 2020, we generated $400,000 and $150,000 of revenue, respectively from providing these management services.
We paid $500,000 in exchange for our rights to manage this restaurant. The restaurant is owned by a third party unaffiliated with us. In exchange for providing management, bookkeeping and related services, we receive one-half (½) of the net profit, if any, from the operation of the restaurant.
However, from time to time we are required to redesign and refurbish the restaurants at significant cost. Drink prices may vary between locations to meet local conditions. Food prices are substantially standardized for all restaurants. The restaurants' hours of operation are from 11:00 a.m. to 1:00-5:00 a.m. depending upon demand and local law. 3 Table of Contents Company-Owned Restaurants .
Food prices are substantially standardized for all restaurants. The restaurants' hours of operation are from 11:00 a.m. to 1:00-5:00 a.m. depending upon demand and local law. Company-Owned Restaurants . We own and operate nine restaurants all under our service mark “Flanigan’s Seafood Bar and Grill” three of which are jointly operated with package liquor stores we own.
As of October 2, 2021, all eight (8) limited partnerships where we are the general partner and are eligible to receive a management fee, have returned to their respective investors all cash invested and we receive an annual management fee equal to one-half (½) of the cash available for distribution by these limited partnerships.
As of September 30, 2023, all limited partnerships, with the exception of the 2022 Sunrise Restaurant, which opened for business in March, 2022 and the 2023 Miramar Restaurant, which opened for business in April, 2023, have returned all cash invested and we receive an annual management fee equal to one-half (½) of the cash available for distribution by the limited partnership.
Their resources and market presence may provide advantages in marketing, purchasing and negotiating leases. We compete with other restaurant and retail establishments for sites and finding management personnel. Our business is subject to seasonal effects, including that liquor purchases tend to increase during the holiday seasons.
We have many well-established competitors, both nationally and locally owned, with substantially greater financial resources than we do. Their resources and market presence may provide advantages in marketing, purchasing and negotiating leases. We compete with other restaurant and retail establishments for sites and finding management personnel.
Restaurant Operations Our restaurants provide a neighborhood casual, standardized dining experience, typical of casual restaurant chains. The interior decor of the restaurants is nautical with numerous fishing and boating pictures and decorations. The restaurants are designed to permit minor modifications without significant capital expenditures.
The interior decor of the restaurants is nautical with numerous fishing and boating pictures and decorations. The restaurants are designed to permit minor modifications without significant capital expenditures. However, from time to time we are required to redesign and refurbish the restaurants at significant cost. Drink prices may vary between locations to meet local conditions.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeA decrease in guest traffic as a result of health concerns or negative publicity, or as a result of a change in our menu or dining experience or a temporary closure of any of our restaurants, could materially harm our business. 23 Table of Contents If We Are Unable To Protect Our Customers’ Credit Card Data, We Could Be Exposed To Data Loss, Litigation, And Liability, And Our Reputation Could Be Significantly Harmed.
Biggest changeIf our guests become ill from food-borne illnesses, we could be forced to temporarily close some restaurants. A decrease in guest traffic as a result of health concerns or negative publicity, or as a result of a change in our menu or dining experience or a temporary closure of any of our restaurants, could materially harm our business.
In addition, remediation of any problems with our systems could result in significant, unplanned expenses. The Effect of Recent Changes to U.S. Healthcare Laws May Increase Our Healthcare Costs and Negatively Impact Our Financial Results. We offer eligible full-time employees the opportunity to enroll in healthcare coverage subsidized by the Company.
In addition, remediation of any problems with our systems could result in significant, unplanned expenses. 18 The Effect of Recent Changes to U.S. Healthcare Laws May Increase Our Healthcare Costs and Negatively Impact Our Financial Results. We offer eligible full-time employees the opportunity to enroll in healthcare coverage subsidized by the Company.
If we are unable to manage these risks successfully, we will face increased costs and lower than anticipated revenues which will materially adversely affect our business, financial condition, operating results and cash flow. Changes In Customer Preferences For Casual Dining Styles Could Adversely Affect Financial Performance.
If we are unable to manage these risks successfully, we will face increased costs and lower than anticipated revenues which will materially adversely affect our business, financial condition, operating results and cash flow. 15 Changes In Customer Preferences For Casual Dining Styles Could Adversely Affect Financial Performance.
Our operating margins depend on, among other things, our ability to anticipate and react to changes in the costs of key operating resources, including food and beverage costs, utilities and other supplies and services. We attempt to negotiate short-term and long-term agreements for our principal commodity, supply and equipment requirements, depending on market conditions and expected demand.
Our operating margins depend on, among other things, our ability to anticipate and react to changes in the costs of key operating resources, including food and beverage costs, utilities and other supplies and services due to inflation. We attempt to negotiate short-term and long-term agreements for our principal commodity, supply and equipment requirements, depending on market conditions and expected demand.
Our digital business, which has become an increasing significant part of our business, is subject to risks. Primarily due to the COVID-19 pandemic, our revenue derived from digital orders, which includes delivery and customer pickup has increased substantially.
Our Digital Business, Which Has Become an Increasingly Significant Part of Our Business, is Subject to Risks. Primarily due to the COVID-19 pandemic, our revenue derived from digital orders, which includes delivery and customer pickup has increased substantially.
If these marketing and advertising investments do not drive increased restaurant and/or package store sales, the expense associated with these programs will adversely impact our financial results, and we may not generate the levels of comparable sales we expect. 20 Table of Contents Labor Shortages, An Increase In Labor Costs, Or Inability To Attract Employees Could Harm Our Business.
If these marketing and advertising investments do not drive increased restaurant and/or package store sales, the expense associated with these programs will adversely impact our financial results, and we may not generate the levels of comparable sales we expect. Labor Shortages, An Increase In Labor Costs, Or Inability To Attract Employees Could Harm Our Business.
However, we are currently unable to contract for extended periods of time for certain of our commodities. Consequently, these commodities can be subject to unforeseen supply and cost fluctuations due to factors such as changes in demand patterns, increases in the cost of key inputs, fuel costs, weather and other market conditions outside of our control.
However, we are currently unable to contract for extended periods of time for certain of our commodities. Consequently, these commodities can be subject to unforeseen supply and cost fluctuations due to factors such as changes in demand patterns, increases in the cost of key inputs, fuel costs, weather and other market conditions outside of our control caused by inflation.
There is no assurance that comparable restaurant sales will increase in fiscal year 2022 due to, among other things, ongoing consumer and economic uncertainty. 17 Table of Contents Our ability to increase comparable restaurant sales depends on many factors, including: · perceptions of the Flanigan’s brand; · competition, especially from an increasing number of competitors in the fast casual segment of the restaurant industry and from other restaurants whose strategies overlap ours, as well as from grocery stores, meal kit delivery services and other dining options; · executing our strategies effectively, including our marketing and branding strategies; · changes in consumer preferences and discretionary spending; · our ability to increase menu prices without adversely affecting our existing business; · weather, natural disasters and other factors limiting access to our restaurants; and · changes in government regulation that may impact customer perceptions of our food.
There is no assurance that comparable restaurant sales will increase in fiscal year 2024 due to, among other things, ongoing consumer and economic uncertainty. 13 Our ability to increase comparable restaurant sales depends on many factors, including: ● perceptions of the Flanigan’s brand; ● competition, especially from an increasing number of competitors in the fast casual segment of the restaurant industry and from other restaurants whose strategies overlap ours, as well as from grocery stores, meal kit delivery services and other dining options; ● executing our strategies effectively, including our marketing and branding strategies; ● changes in consumer preferences and discretionary spending; ● our ability to increase menu prices without adversely affecting our existing business; ● weather, natural disasters and other factors limiting access to our restaurants; and ● changes in government regulation that may impact customer perceptions of our food.
Risks Related to Our Business If we are unable to staff and retain qualified restaurant and package liquor store management and operating personnel in an increasingly competitive market, we may be unable to effectively operate and grow our business and revenues, which could materially adversely affect our financial performance. 16 Table of Contents Similar to the broader economy, we are experiencing labor shortfalls relative to our sales levels in certain parts of our workforce.
Risks Related to Our Business If we are unable to staff and retain qualified restaurant and package liquor store management and operating personnel in an increasingly competitive market, we may be unable to effectively operate and grow our business and revenues, which could materially adversely affect our financial performance. 12 Similar to the broader economy, we are experiencing labor shortfalls relative to our sales levels in certain parts of our workforce.
If our company culture were to deteriorate following a change in leadership, or if a new management team were to be unsuccessful in executing our strategy or were to change important elements of our current strategy, our growth prospects or future operating results may be adversely impacted. 27 Table of Contents We are Exposed to Risks Related to Cybersecurity.
If our company culture were to deteriorate following a change in leadership, or if a new management team were to be unsuccessful in executing our strategy or were to change important elements of our current strategy, our growth prospects or future operating results may be adversely impacted. We Are Exposed to Risks Related to Cybersecurity.
If we fail to comply with federal, state or local regulations, our licenses may be revoked and we may be forced to terminate the sale of alcoholic beverages at one or more of our restaurants. 22 Table of Contents The Federal Americans with Disabilities Act (the “ADA”) prohibits discrimination on the basis of disability in public accommodations and employment.
If we fail to comply with federal, state or local regulations, our licenses may be revoked and we may be forced to terminate the sale of alcoholic beverages at one or more of our restaurants. 17 The Federal Americans with Disabilities Act (the “ADA”) prohibits discrimination on the basis of disability in public accommodations and employment.
However, we have not experienced any adverse effects from past menu price increases. Increases in Food Costs, Raw Materials and Other Supplies and Services May Have a Material Adverse Impact on our Financial Performance.
However, we have not experienced any adverse effects from past menu price increases. Increases in Food Costs, Raw Materials and Other Supplies and Services Due to Inflation May Have a Material Adverse Impact on our Financial Performance.
Inability To Attract And Retain Customers Could Affect Results Of Operations. We take pride in our ability to attract and retain customers, however, if we do not deliver an enjoyable dining experience for our customers, they may not return and results may be negatively affected. A Failure To Comply With Governmental Regulations Could Harm Our Business And Our Reputation.
We take pride in our ability to attract and retain customers, however, if we do not deliver an enjoyable dining experience for our customers, they may not return and results may be negatively affected. A Failure To Comply With Governmental Regulations Could Harm Our Business And Our Reputation.
The COVID-19 pandemic has had a significant adverse impact on our customer traffic and ability to operate our restaurants and may continue to do so for the foreseeable future. Future pandemics and other diseases may have a similar or more severe impact.
The COVID-19 pandemic had a significant adverse impact on our customer traffic and ability to operate our restaurants and may do so again in the foreseeable future. Future pandemics and other diseases may have a similar or more severe impact.
If the third-party delivery services that we utilize cease or curtail operations, increase their fees, or give greater priority or promotions on their platforms to our competitors, our delivery business and our sales may be negatively impacted Our institutional lender will no longer originate, renew or modify loans at LIBOR effective January 1, 2022.
If the third-party delivery services that we utilize cease or curtail operations, increase their fees, or give greater priority or promotions on their platforms to our competitors, our delivery business and our sales may be negatively impacted. Our Institutional Lender No Longer Originates, Renews or Modifies loans at LIBOR Effective January 1, 2022.
Americans with Disabilities Act, or ADA, and similar state laws that give civil rights protections to individuals with disabilities in the context of employment, public accommodations and other areas.
Americans with Disabilities Act and Similar State Laws We are subject to the U.S. Americans with Disabilities Act, or ADA, and similar state laws that give civil rights protections to individuals with disabilities in the context of employment, public accommodations and other areas.
If We Experience a Significant Failure in or Interruption of Certain Key Information Technology Systems, our Business could be Adversely Impacted. We use a variety of applications and systems to manage the flow of information securely within each of our restaurants and within our centralized corporate infrastructure.
We have not experienced any security breaches to date. If We Experience a Significant Failure in or Interruption of Certain Key Information Technology Systems, our Business Could Be Adversely Impacted. We use a variety of applications and systems to manage the flow of information securely within each of our restaurants and within our centralized corporate infrastructure.
Regulations and consumer eating habits may change because of new information or attitudes regarding diet and health. These changes may include regulations that impact the ingredients and nutritional content of our menu items at our restaurants.
New Information Or Attitudes Regarding Diet And Health Could Result In Changes In Regulations And Consumer Eating Habits That Could Adversely Affect Our Revenues. Regulations and consumer eating habits may change because of new information or attitudes regarding diet and health. These changes may include regulations that impact the ingredients and nutritional content of our menu items at our restaurants.
Potential changes in labor laws, including the possible passage of legislation designed to make it easier for employees to unionize, could increase the likelihood of some or all of our employees being subjected to greater organized labor influence and could have an adverse effect on our business and financial results by imposing requirements that could potentially increase our costs, reduce our flexibility and impact our employee culture. 25 Table of Contents Americans with Disabilities Act and Similar State Laws We are subject to the U.S.
Potential changes in labor laws, including the possible passage of legislation designed to make it easier for employees to unionize, could increase the likelihood of some or all of our employees being subjected to greater organized labor influence and could have an adverse effect on our business and financial results by imposing requirements that could potentially increase our costs, reduce our flexibility and impact our employee culture.
We have not conducted a comprehensive environmental review of our properties or operations. We cannot predict what environmental laws will be enacted in the future, how existing or future environmental laws will be administered or interpreted, or the amount of future expenditures that we may need to make to comply with or to satisfy claims relating to environmental laws.
We cannot predict what environmental laws will be enacted in the future, how existing or future environmental laws will be administered or interpreted, or the amount of future expenditures that we may need to make to comply with or to satisfy claims relating to environmental laws.
We believe our executive officers have created an employee culture, food culture and business strategy at our company that has been critical to our success and that may be difficult to replicate under another management team.
O’Neil, and much of our growth has occurred under their direction as well. We believe our executive officers have created an employee culture, food culture and business strategy at our company that has been critical to our success and that may be difficult to replicate under another management team.
To grow successfully, we must open new restaurants and/or package liquor stores on a timely and profitable basis. We have experienced delays in restaurant and/or package liquor store openings from time to time and may experience delays in the future.
Our Business Could Be Materially Adversely Affected If We Are Unable To Expand In A Timely And Profitable Manner. To grow successfully, we must open new restaurants and/or package liquor stores on a timely and profitable basis. We have experienced delays in restaurant and/or package liquor store openings from time to time and may experience delays in the future.
Our Chairman and Chief Executive Officer and President, James Flanigan, has been the principal architect of our business strategy since 2002. August Bucci, Jeffrey Kastner and Christopher O’Neil, our Chief Operating Officer, Chief Financial Officer and Vice President of Package Operations, respectively, have also served with us since 2002 in the case of Mr.
August Bucci, Jeffrey Kastner and Christopher O’Neil, our Chief Operating Officer, Chief Financial Officer and Vice President of Package Operations, respectively, have also served with us since 2002 in the case of Mr. Bucci, since 2004 in the case of Mr. Kastner and 2016 in the case of Mr.
Due To Our Geographic Locations, Restaurants Are Subject To Climate Conditions That Could Affect Operations. All but one (1) of our restaurants and package liquor stores are located in South Florida, with the remaining restaurant located in Central Florida.
Additionally, competition for qualified employees could require us to pay higher wages, which could result in higher labor costs. Due To Our Geographic Locations, Restaurants Are Subject To Climate Conditions That Could Affect Operations. All but one (1) of our restaurants and package liquor stores are located in South Florida, with the remaining restaurant located in Central Florida.
We may also need to modify or refine elements of our business to evolve our concepts in order to compete with popular new restaurant formats or store concepts that may develop in the future.
We may also need to modify or refine elements of our business to evolve our concepts in order to compete with popular new restaurant formats or store concepts that may develop in the future. There can be no assurance that we will be successful in implementing these modifications or that these modifications will not reduce our profitability.
We could experience adverse publicity arising from enforcement activity related to work authorization compliance, anti-discrimination compliance, or both, that negatively impacts our brand and may make it more difficult to hire and keep qualified employees. Moreover, our business could be adversely affected by increased labor costs or difficulties in finding the right employees for our restaurants.
We could experience adverse publicity arising from enforcement activity related to work authorization compliance, anti-discrimination compliance, or both, that negatively impacts our brand and may make it more difficult to hire and keep qualified employees.
Any adverse publicity resulting from these allegations, whether directed at us or at fast casual or quick-service restaurants generally, may also materially and adversely affect our reputation or prospects, which in turn could adversely affect our results. Our Success May Depend on the Continued Service and Availability of Key Personnel.
A significant judgment for any claims against us could materially and adversely affect our financial condition or results of operations. Any adverse publicity resulting from these allegations, whether directed at us or at fast casual or quick-service restaurants generally, may also materially and adversely affect our reputation or prospects, which in turn could adversely affect our results.
If we have to close any restaurants due to difficulties in renewing leases, we would lose revenue from the affected restaurants and may not be able to open suitable replacement restaurants.
If we have to close any restaurants due to difficulties in renewing leases, we would lose revenue from the affected restaurants and may not be able to open suitable replacement restaurants. Substantial increases in rents associated with lease renewals would increase our occupancy costs, reducing our restaurant margins.
A failure of these systems to operate effectively, problems with transitioning to upgraded or replacement systems, or any other failure to maintain a continuous and secure information technology network for any of the above reasons could result in interruption and delays in customer services, adversely affect our reputation, and negatively impact our results of operations.
A failure of these systems to operate effectively, problems with transitioning to upgraded or replacement systems, or any other failure to maintain a continuous and secure information technology network for any of the above reasons could result in interruption and delays in customer services, adversely affect our reputation, and negatively impact our results of operations. 21 Acts of Violence at or Threatened Against our Restaurants or the Centers in which they are Located, including Active Shooter Situations and Terrorism, Could Unfavorably Impact our Restaurant Sales, Which Could Materially Adversely Affect our Financial Performance.
Our labor expenses include significant costs related to our health benefit plans. Health care costs continue to rise and are especially difficult to project. Material increases in costs associated with medical claims, or an increase in the severity or frequency of such claims, may cause health care costs to vary substantially from year-over-year.
Material increases in costs associated with medical claims, or an increase in the severity or frequency of such claims, may cause health care costs to vary substantially from year-over-year.
Adverse Public Or Medical Opinions About Health Effects Of Consuming Our Products As Well As Negative Publicity About Us, Our Restaurants And/or Package Liquor Stores And About Others Across The Food And Liquor Industry Supply Chain, Whether Or Not Accurate, Could Negatively Affect Us.
To the extent we are unable to respond with appropriate changes to our menu offerings, it could materially affect customer demand and have an adverse impact on our revenues. 14 Adverse Public Or Medical Opinions About Health Effects Of Consuming Our Products As Well As Negative Publicity About Us, Our Restaurants And/Or Package Liquor Stores And About Others Across The Food And Liquor Industry Supply Chain, Whether Or Not Accurate, Could Negatively Affect Us.
Our suppliers also may be affected by higher costs to produce and transport commodities used in our restaurants, higher minimum wage and benefit costs, and other expenses that they pass through to their customers, which could result in higher costs for goods and services supplied to us. 19 Table of Contents Our Business Could Be Materially Adversely Affected If We Are Unable To Expand In A Timely And Profitable Manner.
Dairy costs can also fluctuate due to government regulation. Our suppliers also may be affected by higher costs to produce and transport commodities used in our restaurants, higher minimum wage and benefit costs, and other expenses that they pass through to their customers, which could result in higher costs for goods and services supplied to us.
Additionally, while we do not currently have any unionized employees, union organizers have engaged in efforts to organize employees of other restaurant companies. If a significant portion of our employees were to become union organized, our labor costs could increase and our efforts to maintain a culture appealing only to top performing employees could be impaired.
If a significant portion of our employees were to become union organized, our labor costs could increase and our efforts to maintain a culture appealing only to top performing employees could be impaired.
Any such situation could adversely impact customer traffic and make it more difficult to staff our restaurants fully, which could materially adversely affect our financial performance. 28 Table of Contents The occurrence or threat of extraordinary events, such as active shooter or future terrorist attacks military and governmental responses, and the protest of future wars, may result in negative changes to economic conditions likely resulting in decreased consumer spending.
The occurrence or threat of extraordinary events, such as active shooter or future terrorist attacks military and governmental responses, and the protest of future wars, may result in negative changes to economic conditions likely resulting in decreased consumer spending.
The costs and other effects of these new healthcare requirements cannot be determined with certainty, but they may have a material adverse effect on our financial and operating results. 24 Table of Contents Governmental Regulation in One or More of the Following Areas May Adversely Affect Our Existing and Future Operations and Results, Including by Harming Our Ability to Open New Restaurants or Increasing Our Operating Costs.
Governmental Regulation in One or More of the Following Areas May Adversely Affect Our Existing and Future Operations and Results, Including by Harming Our Ability to Open New Restaurants or Increasing Our Operating Costs.
We assume no obligation to update any forward-looking statements after the date of this report as a result of new information, future events or other developments, except as required by applicable laws and regulations. 15 Table of Contents Risks Related to COVID-19 Pandemic The Novel Coronavirus (COVID-19) Pandemic Has Had A Significant Impact On Our Operations Since March 2020 And Could Materially And Adversely Affect Our Future Business And Financial Results.
We assume no obligation to update any forward-looking statements after the date of this report as a result of new information, future events or other developments, except as required by applicable laws and regulations.
Regardless of whether any claims against us are valid or whether we are ultimately held liable for such claims, they may be expensive to defend and may divert time and money away from our operations and hurt our performance. A significant judgment for any claims against us could materially and adversely affect our financial condition or results of operations.
The restaurant industry has been subject to a growing number of claims based on the nutritional content of food products sold and disclosure and advertising practices. 20 Regardless of whether any claims against us are valid or whether we are ultimately held liable for such claims, they may be expensive to defend and may divert time and money away from our operations and hurt our performance.
This situation is changing rapidly and additional effects may arise that we are not presently aware of or that we currently do not consider to present significant risks to our operations. If we are not able to respond to and manage the impact of such events effectively, our business and financial condition will be negatively impacted.
If we are not able to respond to and manage the impact of such events effectively, our business and financial condition will be negatively impacted.
Substantial increases in rents associated with lease renewals would increase our occupancy costs, reducing our restaurant margins. 21 Table of Contents Due To Our Geographic Locations, We May Not Be Able To Acquire Windstorm Insurance Coverage Or Adequate Windstorm Insurance Coverage At A Reasonable Rate.
Due To Our Geographic Locations, We May Not Be Able To Acquire Windstorm Insurance Coverage Or Adequate Windstorm Insurance Coverage At A Reasonable Rate.
In addition, stringent and varied requirements of local regulators with respect to zoning, and use and environmental factors could delay or prevent development of new restaurants in particular locations. 26 Table of Contents Environmental Laws We are subject to federal, state and local environmental laws and regulations concerning the discharge, storage, handling, release and disposal of hazardous or toxic substances, as well as local ordinances relating to our operations.
Environmental Laws We are subject to federal, state and local environmental laws and regulations concerning the discharge, storage, handling, release and disposal of hazardous or toxic substances, as well as local ordinances relating to our operations. We have not conducted a comprehensive environmental review of our properties or operations.
In connection with credit card sales, we transmit confidential credit card information by way of secure private retail networks.
If We Are Unable To Protect Our Customers’ Credit Card Data, We Could Be Exposed To Data Loss, Litigation And Liability, And Our Reputation Could Be Significantly Harmed. In connection with credit card sales, we transmit confidential credit card information by way of secure private retail networks.
In general, implementing the requirements of the Affordable Care Act is likely to impose additional administrative costs on us.
In general, implementing the requirements of the Affordable Care Act is likely to impose additional administrative costs on us. The costs and other effects of these new healthcare requirements cannot be determined with certainty, but they may have a material adverse effect on our financial and operating results.
In March 2020, a novel strain of coronavirus was declared a global pandemic and a National Public Health Emergency.
Risks Related to COVID-19 Pandemic The COVID-19 Pandemic Has Had A Significant Impact On Our Operations Since March 2020 And Could Materially And Adversely Affect Our Future Business And Financial Results. In March 2020, a novel strain of coronavirus was declared a global pandemic and a National Public Health Emergency.
Removed
Throughout our fiscal year 2021, in accordance with guidance from health officials, we offered both indoor and outdoor food and bar options at all of our restaurants, with, among other precautions, appropriate social distancing and mask requirements for all customers and employees.
Added
The Department of Health and Human Services (HHS) permitted the federal Public Health Emergency for COVID-19 (PHE) declared by the Secretary of the Department of Health and Human Services (Secretary) under Section 319 of the Public Health Service (PHS) Act to expire at the end of the day on May 11, 2023.
Removed
The COVID-19 pandemic’s impact on the economy in general, globally, nationally and locally, could also adversely affect our guests’ financial condition, resulting in reduced spending at our restaurants and package liquor stores.
Added
We have experienced significant issues relating to suppliers and labor impacted by the COVID-19 pandemic.
Removed
The COVID-19 pandemic and these responses have affected and will continue to adversely affect our guest traffic, sales and operating costs and we cannot predict how long the pandemic will last or what other government responses may occur.
Added
The State of Florida has already enacted a minimum wage and tip credit, with the minimum wage currently at $12.00 per hour and a tip credit of $3.02 per hour. The minimum wage increases $1.00 per hour annually until it reaches $15.00 per hour in 2027. The tip credit does not increase.
Removed
In the second quarter of fiscal 2020, our Board of Directors voted to cancel a previously declared cash dividend due to uncertainty surrounding the duration of closures of our dining rooms and other restrictions mandated by state and local governments in response to COVID-19.
Added
Additionally, while our employees are not currently covered by any collective bargaining agreements, union organizers may engage in efforts to organize our employees and those of other restaurant companies. If a significant portion of our employees were to unionize, our labor costs could increase and it could negatively impact our culture, reduce our flexibility and disrupt our business.
Removed
During our fiscal year 2021, our Board of Directors did not declare a cash dividend due to uncertainty surrounding the duration of restrictions mandated by state and local governments in response to COVID-19. We have not experienced any significant issues related to suppliers; however, our suppliers could be adversely impacted by the COVID-19 pandemic.
Added
In addition, our responses to any union organizing efforts could negatively impact our reputation and dissuade guests from patronizing our restaurants. Our labor expenses include significant costs related to our health benefit plans. Health care costs continue to rise and are especially difficult to project.
Removed
There can be no assurance that we will be successful in implementing these modifications or that these modifications will not reduce our profitability. 18 Table of Contents New Information Or Attitudes Regarding Diet And Health Could Result In Changes In Regulations And Consumer Eating Habits That Could Adversely Affect Our Revenues.
Added
Shortages or Interruptions in the Supply of Food Offering Ingredients and/or Liquor Inventory Could Adversely Affect our Operating Results. Our business is dependent on frequent and consistent deliveries of food offering ingredients and liquor inventory.
Removed
To the extent we are unable to respond with appropriate changes to our menu offerings, it could materially affect customer demand and have an adverse impact on our revenues.
Added
We may experience shortages, delays or interruptions in the supply of ingredients and other supplies to our restaurants due to inclement weather, natural disasters, labor issues or other operational disruptions at our suppliers, distributors or transportation providers or other conditions beyond our control.
Removed
Dairy costs can also fluctuate due to government regulation.
Added
In addition, we have a single or a limited number of suppliers for some of our ingredients, including baby back ribs. Although we believe we have potential alternative suppliers and sufficient reserves of food offering ingredients and liquor inventory, shortages or interruptions in our supply of food offering ingredients and liquor inventory could adversely affect our financial results.
Removed
During our fiscal year 2021, we continued developing our new restaurants in Sunrise, Florida (Store #85) and Miramar, Florida (Store #25). During our fiscal year 2021, we also continued developing our new package liquor store in Miramar, Florida (Store #24).
Added
During our fiscal year 2023, we opened our new limited partnership owned restaurant in Miramar, Florida (Store #25) for business, as well as our company owned package liquor store in Miramar, Florida (Store #24) and our newly built stand-alone package liquor store in Hollywood, Florida (Store #19P) for business, replacing our package liquor store destroyed by fire which previously operated at that site.
Removed
Additionally, competition for qualified employees could require us to pay higher wages, which could result in higher labor costs. Increases In Employee Minimum Wages By The Federal Or State Government Could Adversely Affect Business. Certain of our Company employees are paid wages that relate to federal and state minimum wage rates.
Added
During our fiscal year 2023, we also continued constructing a stand-alone building on the same site in Hollywood, Florida adjacent to Store #19P, replacing our restaurant destroyed by fire which previously operated at that site (Store #19R). We anticipate that the restaurant in Hollywood, Florida (Store #19R) will open for business in March 2024.
Removed
Increases in the minimum wage rates, such as fixed annual increases in the State of Florida minimum wage, may significantly increase our labor costs. In addition, since our business is labor-intensive, shortages in the labor pool or other inflationary pressure could increase labor costs, which could harm our financial performance.
Added
We secured windstorm insurance coverage for the period commencing December 30, 2023 at a higher premium. (See Item 2.
Removed
If our guests become ill from food-borne illnesses, we could be forced to temporarily close some restaurants.
Added
Subsequent Events for a discussion of windstorm insurance for the period commencing December 30, 2023 on page 31. 16 Our Inability or Failure to Execute a Comprehensive Business Continuity Plan at our Restaurant Support Centers Following a Disaster or Force Majeure Event could have a Material Adverse Impact on our Business.
Removed
The restaurant industry has been subject to a growing number of claims based on the nutritional content of food products sold and disclosure and advertising practices.
Added
Many of our corporate systems and processes and corporate support for our restaurant and package liquor store operations are centralized at one location.
Removed
Bucci, since 2004 in the case of Mr. Kastner and 2016 in the case of Mr. O’Neil, and much of our growth has occurred under their direction as well.
Added
We have disaster recovery procedures and business continuity plans in place to address crisis-level events, including hurricanes and other natural disasters and back up and off-site locations for recovery of electronic and other forms of data and information and the COVID-19 pandemic has provided a limited test of our ability to manage our business remotely.
Removed
Acts of Violence at or Threatened Against our Restaurants or the Centers in which they are Located, including Active Shooter Situations and Terrorism, Could Unfavorably Impact our Restaurant Sales, which could Materially Adversely Affect our Financial Performance.
Added
However, if we are unable to fully implement our disaster recovery plans, we may experience delays in recovery of data, inability to perform vital corporate functions, tardiness in required reporting and compliance, failures to adequately support field operations and other breakdowns in normal communication and operating procedures that could have a material adverse effect on our financial condition, results of operation and exposure to administrative and other legal claims.
Removed
Beginning January 1, 2022, our institutional lender will no longer originate, renew or modify loans at LIBOR, except in limited situations. The limited exceptions include our LIBOR transactions which reduce or hedge our LIBOR exposure on contracts entered into before January 1, 2022.
Added
In addition, these threats are constantly evolving, which increases the difficulty of accurately and timely predicting, planning for and protecting against the threat. As a result, our disaster recovery procedures and business continuity plans security may not adequately address all threats we face or protect us from loss. Inability To Attract And Retain Customers Could Affect Results Of Operations.
Added
Moreover, our business could be adversely affected by increased labor costs or difficulties in finding the right employees for our restaurants. 19 Additionally, while we do not currently have any unionized employees, union organizers have engaged in efforts to organize employees of other restaurant companies.
Added
In addition, stringent and varied requirements of local regulators with respect to zoning, use and environmental factors could delay or prevent development of new restaurants in particular locations.
Added
Our Success May Depend on the Continued Service and Availability of Key Personnel. Our Chairman and Chief Executive Officer and President, James Flanigan, has been the principal architect of our business strategy since 2002.
Added
Any such situation could adversely impact customer traffic and make it more difficult to staff our restaurants fully, which could materially adversely affect our financial performance.
Added
Effective January 1, 2022, our institutional lender no longer originates, renews or modifies loans at LIBOR, except in limited situations. As of September 30, 2023, we had one variable rate instrument outstanding that is impacted by changes in interest rates.

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Item 2. Properties

Properties — owned and leased real estate

35 edited+33 added−40 removed6 unchanged
Biggest changeIn August 2018 we purchased the real property and quadraplex adjacent thereto to insure adequate parking for the franchised restaurant in the future, if needed; (ix) a 6,000 square foot stand-alone building in Fort Lauderdale, Florida and the vacant real property diagonally adjacent that we purchased in October 2015, which we use as office and warehouse space, covered parking for our food truck and as a storage yard; and (x) a 6,900 square foot stand-alone building in Sunrise, Florida, which will house our Sunrise, Florida based restaurant currently being developed, which will be owned by an affiliated limited partnership (Store #85).
Biggest changeIn August 2018 we purchased the real property and quadraplex adjacent thereto to insure adequate parking for the franchised restaurant in the future, if needed; (ix) a 6,000 square foot stand-alone building in Fort Lauderdale, Florida and the vacant real property diagonally adjacent that we purchased in October 2015, which we use as office and warehouse space, covered parking for our food truck and as a storage yard; (x) a 6,900 square foot stand-alone building in Sunrise, Florida, which we purchased in March 2021 and houses our limited partnership owned Sunrise, Florida based restaurant, (Store #85), which opened for business in March 2022; (xi) a 6,000 square foot commercial space in Miami, Florida, which we purchased in April 2023 and in which we operate our package liquor store and warehouse (Store #47), through a sublease agreement from a sale-leaseback arrangement in January 1974; and 23 (xii) a 5,450 square foot three building shopping center in Hallandale Beach, Florida (adjacent to our combination package store and restaurant in Hallandale Beach, Florida (Store #31)), that we purchased in April 2023: (A) one stand-alone building, approximately 1,450 square feet which is leased to two unaffiliated third party retailers; (B) the second stand-alone building, approximately 1,500 square feet, which is leased to one unaffiliated third party retailer; and (C) the third stand-alone building, approximately 2,500 square feet, which is leased to one unaffiliated third party retailer, (collectively Store #38).
(5) 7003 Taft Street Hollywood, Florida 1,978 N/A Company 3/1/02 to 2/28/27 Options to 2/28/47 Big Daddy's Liquors #7 Flanigan's Enterprises, Inc. 1550 W. 84th Street Hialeah, Florida 1,450 N/A Company 11/1/00 to 10/31/25 Big Daddy's Liquors #8 Flanigan's Enterprises, Inc. 959 State Road 84 Fort Lauderdale, Florida 4,084 N/A Company 5/1/99 to 4/30/24 Option to 4/30/29 Flanigan’s Seafood Bar and Grill #9 Flanigan’s Enterprises, Inc. 1550 W. 84th Street Hialeah, Florida 4,700 130 Company 1/1/10 to 12/31/24 Options to 12/31/49 Flanigan's Legends Seafood Bar and Grill #11 11 Corporation, Inc.
(5) 7003 Taft Street Hollywood, Florida 1,978 N/A Company 3/1/02 to 2/28/27 Options to 2/28/47 Big Daddy's Liquors #7 Flanigan's Enterprises, Inc. 1550 W. 84th Street Hialeah, Florida 1,450 N/A Company 11/1/00 to 10/31/25 Big Daddy's Liquors #8 Flanigan's Enterprises, Inc. 959 State Road 84 Fort Lauderdale, Florida 4,084 N/A Company 5/1/99 to 4/30/29 Flanigan’s Seafood Bar and Grill #9 Flanigan’s Enterprises, Inc. 1550 W. 84th Street Hialeah, Florida 4,700 130 Company 1/1/10 to 12/31/24 Options to 12/31/49 Flanigan's Legends Seafood Bar and Grill #11 11 Corporation, Inc.
The stand-alone building housed our North Miami, Florida Company-owned combination restaurant and package liquor store, (Store #20), from July, 1968 until June 2017 when the package liquor store was re-located to a new building we constructed on the adjacent property; (vii) a 23,678 square foot two building shopping center in Miami, Florida that we purchased in November 2010: (A) one stand-alone building, approximately 18,828 square feet, (i) houses our recently opened (October 2019) new package liquor store and (ii) is otherwise leased to ten unaffiliated third party retailers; and (B) the second stand-alone building, approximately 4,850 square feet, has housed our Kendall, Florida based restaurant since April 4, 2000, which is owned by our affiliated limited partnership (Store #70); (viii) a 6,400 square foot building in Fort Lauderdale, Florida that we purchased in February 2014, 4,000 square feet of which has been leased to a related franchisee (Store #15) since April 1, 1997 and the balance (2,400 square feet) of which we use as storage.
The stand-alone building housed our North Miami, Florida Company-owned combination restaurant and package liquor store, (Store #20), from July 1968 until June 2017 when the package liquor store was re-located to a new building we constructed on the adjacent property; (vii) a 23,678 square foot two building shopping center in Miami, Florida that we purchased in November 2010: (A) one stand-alone building, approximately 18,828 square feet, (i) houses our recently opened (October 2019) new package liquor store and (ii) is otherwise leased to ten unaffiliated third party retailers; and (B) the second stand-alone building, approximately 4,850 square feet, has housed our limited partnership owned Kendall, Florida based restaurant since April 4, 2000, (Store #70); (viii) a 6,400 square foot building in Fort Lauderdale, Florida that we purchased in February 2014, 4,000 square feet of which has been leased to a related franchisee (Store #15) since April 1, 1997 and the balance (2,400 square feet) of which we use as storage.
(1) (2) 2988 S.W. 27 th Avenue Miami, Florida 3,000 N/A Franchise 2/15/72 to 12/31/25 Options to 12/31/35 Flanigan’s Wine & Liquors #19 (8) Flanigan’s Enterprises, Inc. 7990 Davie Road Extension Hollywood, Florida 3,000 N/A Company Company-Owned Flanigan’s Seafood Bar and Grill #19 (8) Flanigan’s Enterprises, Inc. 2505 N. University Dr.
(1) (2) 2988 S.W. 27 th Avenue Miami, Florida 3,000 N/A Franchise 2/15/72 to 12/31/25 Options to 12/31/35 Flanigan’s Wine & Liquors #19 (8) Flanigan’s Enterprises, Inc. 7990 Davie Road Extension Hollywood, Florida 3,000 N/A Company Company-Owned Flanigan’s Seafood Bar and Grill #19 (9) Flanigan’s Enterprises, Inc. 2505 N. University Dr.
(1) 330 Southern Blvd. W. Palm Beach, Florida 5,000 150 Franchise 1/4/00 to 1/3/25 Flanigan's Seafood Bar and Grill #12 Flanigan’s Enterprises, Inc. 2405 Tenth Ave. North Lake Worth, Florida 5,000 180 Company 11/16/92 to 11/15/23 Options to 11/15/38 Flanigan's Seafood Bar and Grill #14 Big Daddy's #14, Inc. (1) (4) 2041 NE Second St.
(1) 330 Southern Blvd. W. Palm Beach, Florida 5,000 150 Franchise 1/4/00 to 1/3/25 Flanigan's Seafood Bar and Grill #12 Flanigan’s Enterprises, Inc. 2405 Tenth Ave. North Lake Worth, Florida 5,000 180 Company 11/16/92 to 11/15/28 Options to 11/15/38 Flanigan's Seafood Bar and Grill #14 Big Daddy's #14, Inc. (1) (4) 2041 NE Second St.
Surfside, Florida 3,000 N/A Company 5/29/97 to 5/28/22 Options to 5/28/37 Flanigan's Seafood Bar and Grill #40 Flanigan's Enterprises, Inc. 5450 N. State Road 7 N. Lauderdale, Florida 4,600 140 Company Company-Owned Piranha Pat's #43 BD 43 Corporation (1) (2) 2500 E. Atlantic Blvd.
Surfside, Florida 3,000 N/A Company 5/29/97 to 5/28/27 Options to 5/28/37 Flanigan's Seafood Bar and Grill #40 Flanigan's Enterprises, Inc. 5450 N. State Road 7 N. Lauderdale, Florida 4,600 140 Company Company-Owned Piranha Pat's #43 BD 43 Corporation (1) (2) 2500 E. Atlantic Blvd.
Pompano Beach, Florida 4,500 90 Franchise 12/1/72 to 11/30/22 Big Daddy’s Liquors #45 Flanigan’s Enterprises, Inc. 12776 S.W. 88th Street Miami, Florida 3,250 N/A Company 7/1/19 to 6/30/24 Options to 6/30/34 Big Daddy's Liquors #47 Flanigan's Enterprises, Inc. (3) 8600 Biscayne Blvd.
Pompano Beach, Florida 4,500 90 Franchise 12/1/72 to 11/30/27 Big Daddy’s Liquors #45 Flanigan’s Enterprises, Inc. 12776 S.W. 88th Street Miami, Florida 3,250 N/A Company 7/1/19 to 6/30/24 Options to 6/30/34 Big Daddy's Liquors #47 Flanigan's Enterprises, Inc. (3) 8600 Biscayne Blvd.
Deerfield Beach, Florida 3,320 90 Franchise 6/1/79 to 6/1/24 Options to 6/1/34 Flanigan’s Seafood Bar and Grill #15 CIC Investors #15 Ltd. (1) (7) 1479 E. Commercial Blvd. Ft. Lauderdale, Florida 4,000 90 Franchise/ Limited Partnership 1/1/09 to 8/31/26 Options to 8/31/36 31 Table of Contents Name and Location Approx.
Deerfield Beach, Florida 3,320 90 Franchise 6/1/79 to 6/1/24 Options to 6/1/34 Flanigan’s Seafood Bar and Grill #15 CIC Investors #15 Ltd. (1) (7) 1479 E. Commercial Blvd. Ft. Lauderdale, Florida 4,000 90 Franchise/ Limited Partnership 1/1/09 to 8/31/26 Options to 8/31/36 24 Name and Location Approx.
Federal Highway Stuart, Florida 7,000 200 Company 5/1/10 to 4/30/26 Option to 4/30/31 Flanigan's Seafood Bar and Grill #80 CIC Investors #80 Ltd. 8695 N.W. 12th St Miami, Florida 5,000 165 Limited Partnership 6/15/01 to 2/14/24 Options to 2/14/39 Flanigan's Seafood Bar and Grill #85 CIC Investors #85 Ltd. (9) 14301 W. Sunrise Blvd.
Federal Highway Stuart, Florida 7,000 200 Company 5/1/10 to 4/30/26 Option to 4/30/31 Flanigan’s Seafood Bar and Grill #80 CIC Investors #80 Ltd. 8695 N.W. 12 th St Miami, Florida 5,000 165 Limited Partnership 6/15/01 to 12/14/24 Options to 12/14/39 Flanigan's Seafood Bar and Grill #85 CIC Investors #85 Ltd. (10) 14301 W. Sunrise Blvd.
Federal Highway Hallandale, Florida 4,600 150 Company Company-Owned Flanigan's Seafood Bar and Grill #33 Flanigan’s Enterprises, Inc. 45 S. Federal Highway Boca Raton, Florida 4,620 130 Company 10/1/10 to 6/30/30 Big Daddy's Liquors #34 Flanigan's Enterprises, Inc. 9494 Harding Ave.
Federal Highway Pompano Beach, Florida Flanigan's Seafood Bar and Grill #31 Flanigan's Enterprises, Inc. 4 N. Federal Highway Hallandale, Florida 4,600 150 Company Company-Owned Flanigan's Seafood Bar and Grill #33 Flanigan’s Enterprises, Inc. 45 S. Federal Highway Boca Raton, Florida 4,620 130 Company 10/1/10 to 6/30/30 Big Daddy's Liquors #34 Flanigan's Enterprises, Inc. 9494 Harding Ave.
The one (1) year general liability insurance premium is in the amount of $467,000; (ii) For the policy year beginning December 30, 2021, our general liability insurance for our limited partnerships is a one (1) year policy with our insurance carriers.
The one (1) year general liability insurance premium is in the amount of $455,000; (ii) For the policy year beginning December 30, 2023, our general liability insurance for our limited partnerships is a one (1) year policy with our insurance carriers.
The one (1) year general liability insurance premium is in the amount of $589,000; (iii) For the policy year beginning December 30, 2021, our automobile insurance is a one (1) year policy.
The one (1) year general liability insurance premium is in the amount of $1,055,000; (iii) For the policy year beginning December 30, 2023, our automobile insurance is a one (1) year policy.
The one (1) year automobile insurance premium is in the amount of $194,000; (iv) For the policy year beginning December 30, 2021, our property insurance is a one (1) year policy.
The one (1) year automobile insurance premium is in the amount of $211,000; (iv) For the policy year beginning December 30, 2023, our property insurance is a one (1) year policy.
Our operations are conducted primarily on leased property with the exception of the following: (i) a 10,000 square foot stand-alone building located in Fort Lauderdale, Florida that we purchased in December 1999, which since April 2001 has housed our corporate headquarters; (ii) a 4,600 square foot stand-alone building located in Hallandale, Florida that we purchased in July 2006 and which since September 1968 has housed our Hallandale, Florida Company-owned combination restaurant and package liquor store (Store #31); 29 Table of Contents (iii) a 4,120 square foot stand-alone building in Hollywood, Florida we constructed in November 2003, upon real property we acquired in September 2001 pursuant to a 25 year ground lease interest, (a portion of this building is leased to an unaffiliated third party), and which since November 2003 has housed our Hollywood, Florida Company-owned package liquor store (Store #4); (iv) a 4,500 square foot stand-alone building located in Hollywood, Florida that we purchased in October 2009 and which housed our Hollywood, Florida Company-owned combination restaurant and package liquor store (Store #19) from March, 1972 until it was destroyed by fire on October 2, 2018 and the vacant parcel of real property adjacent thereto which we purchased in February 2015; (v) a 4,600 square foot stand-alone building located in Fort Lauderdale, Florida that we purchased in August 2010 and which since December 1968 has housed our Fort Lauderdale, Florida Company-owned restaurant (Store #22); (vi) a 5,100 square foot stand-alone building in North Miami, Florida that we purchased in November 2010; the two parcels of real property adjacent thereto which we purchased in December 2012, one of which is contiguous to the real property and which we previously leased for non-exclusive parking and the vacant parcel of real property adjacent to the two parcels of real property which we purchased in March 2017.
Our operations are conducted primarily on leased property with the exception of the following: (i) a 10,000 square foot stand-alone building located in Fort Lauderdale, Florida that we purchased in December 1999, which since April 2001 has housed our corporate headquarters; (ii) a 4,600 square foot stand-alone building located in Hallandale, Florida that we purchased in July 2006 and which since September 1968 has housed our Hallandale, Florida Company-owned combination restaurant and package liquor store (Store #31); (iii) a 4,120 square foot stand-alone building in Hollywood, Florida we constructed in November 2003, upon real property we acquired in September 2001 pursuant to a 25 year ground lease interest, (a portion of this building is leased to an unaffiliated third party), and which since November 2003 has housed our Hollywood, Florida Company-owned package liquor store (Store #4); (iv) a 4,500 square foot stand-alone building located in Hollywood, Florida that we purchased in October 2009 and which housed our Hollywood, Florida Company-owned combination restaurant and package liquor store (Store #19) from March, 1972 until it was destroyed by fire on October 2, 2018 and the vacant parcel of real property adjacent thereto which we purchased in February 2015.
(8) During the first quarter of our fiscal year 2019, our combination package liquor store and restaurant located at 2505 N. University Drive, Hollywood, Florida (Store #19), was damaged by a fire and was forced to close.
(8) During the first quarter of our fiscal year 2019, our combination package liquor store and restaurant located at 2505 N. University Drive, Hollywood, Florida (Store #19), was damaged by a fire and was forced to close. We determined that Store #19 should be demolished and rebuilt as separate buildings.
Casualty Loss During the first quarter of our fiscal year 2019, our combination package liquor store and restaurant located at 2505 N. University Drive, Hollywood, Florida (Store #19) was damaged by a fire and was forced to close.
Casualty Loss During the first quarter of our fiscal year 2019, our combination package liquor store and restaurant located at 2505 N. University Drive, Hollywood, Florida (Store #19) was damaged by a fire and was forced to close. The package liquor store re-opened for business during the first quarter of our fiscal year 2023 in a newly constructed stand-alone building.
Miami, Florida 6,000 N/A Company 12/21/68 to 1/1/30 Options to 1/1/50 Flanigan’s Seafood Bar and Grill #13 CIC Investors #13, Ltd. 11415 S. Dixie Highway Pinecrest, Florida 8,000 200 Limited Partnership 6/01/91 to 1/31/31 Option to 1/31/36 Flanigan’s #25 CIC Investors #25, Ltd.
Miami, Florida 6,000 N/A Company 12/21/68 to 1/1/30 Options to 1/1/50 (Sublease) Company-Owned Flanigan’s Seafood Bar and Grill #13 CIC Investors #13, Ltd. 11415 S. Dixie Highway Pinecrest, Florida 8,000 200 Limited Partnership 6/01/91 to 1/31/31 Option to 1/31/36 26 Name and Location Approx. Square Footage Seats Franchised/ Owned by Lease Terms Flanigan’s #25 CIC Investors #25, Ltd.
Financed Insurance Premiums For the policy year commencing December 30, 2021, we financed the premiums on the following property, general liability, excess liability and terrorist policies, totaling approximately $2.54 million, which property, general liability, excess liability and terrorist insurance includes coverage for our franchises which are not included in our consolidated financial statements: (i) For the policy year beginning December 30, 2021, our general liability insurance, excluding limited partnerships, is a one (1) year policy with our insurance carriers.
Insurance Premiums Subsequent to the end of our fiscal year 2023, for the policy year commencing December 30, 2023, we bound coverage on the following property, general liability, excess liability, crime and terrorism policies with premiums totaling approximately $3.932 million, of which property, general liability, excess liability and terrorism insurance includes coverage for our franchises (of approximately $786,000), which are not included in our consolidated financial statements: (i) For the policy year beginning December 30, 2023, our general liability insurance, excluding limited partnerships, is a one (1) year policy with our insurance carriers.
The one (1) year property insurance premium is in the amount of $700,000; (v) For the policy year beginning December 30, 2021, our excess liability insurance are two (2) one (1) year policies.
The one (1) year property insurance premium is in the amount of $1,428,000; (v) For the policy year beginning December 30, 2023, our excess liability insurance is a one (1) year policy.
Square Footage Seats Franchised/ Owned by Lease Terms Flanigan's Seafood Bar and Grill #95 Flanigan’s Enterprises, Inc. 2460 Weston Road Weston, Florida 5,700 235 Company 10/1/17 to 9/30/22 Options to 9/30/32 Flanigan’s Calusa Center, LLC (6) 12750 – 12790 S.W. 88 th Street Miami, Florida 23,700 N/A Company Company-owned shopping center --------------------------------------------- (1) Franchised by Company.
Square Footage Seats Franchised/ Owned by Lease Terms Flanigan's Seafood Bar and Grill #90 CIC Investors #90 Ltd. 9857 S.W. 40 th Street Miami, Florida 6,400 200 Limited Partnership 4/1/11 to 3/31/31 Option to 3/31/36 Flanigan's Seafood Bar and Grill #95 Flanigan’s Enterprises, Inc. 2460 Weston Road Weston, Florida 5,700 235 Company 10/1/17 to 9/30/27 Option to 9/30/32 Flanigan’s Calusa Center, LLC (6) 12750 – 12790 S.W. 88 th Street Miami, Florida 23,700 Company Company-owned shopping center Flanigan’s Enterprises, Inc.
As a result, we pay all rent due under the ground lease, but only 48% of the rent due under the sublease agreement. (4) Effective December 1, 1998, we purchased the Management Agreement to operate the franchised restaurant for the franchisee. (5) Ground lease executed by us on September 25, 2001.
(4) Effective December 1, 1998, we purchased the Management Agreement to operate the franchised restaurant for the franchisee. (5) Ground lease executed by us on September 25, 2001.
Lauderdale, Florida 4,100 200 Company Company-Owned Big Daddy’s Wine & Liquors #24 Flanigan’s Enterprises, Inc. (11) 11225 Miramar Parkway, #245 Miramar, Florida 2,000 N/A Company 3/5/22 to 3/5/32 Options to 3/5/47 32 Table of Contents Name and Location Approx. Square Footage Seats Franchised/ Owned by Lease Terms Flanigan's Seafood Bar and Grill #31 Flanigan's Enterprises, Inc. 4 N.
Lauderdale, Florida 4,100 200 Company Company-Owned Big Daddy’s Wine & Liquors #24 Flanigan’s Enterprises, Inc. (12) 11225 Miramar Parkway, #245 Miramar, Florida 2,000 N.A. Company 3/5/22 to 3/5/32 Options to 3/5/47 25 Name and Location Approx. Square Footage Seats Franchised/ Owned by Lease Terms Brendan’s Sports Pub 3,500 85 Company 6/16/22 to 6/30/72 Flanigan’s Enterprises, Inc. 868 S.
The aggregate (1) year excess liability insurance premiums are in the amount of $576,000; (vi) For the policy year beginning December 30, 2021, our terrorist insurance is a one (1) year policy.
The one (1) year excess liability insurance premium is in the amount of $763,000; (vi) For the policy year beginning December 30, 2023, our crime coverage insurance is a one (1) year policy.
Miami, Florida 4,850 200 Limited Partnership Company-Owned Flanigan’s Seafood Bar and Grill #75 Flanigan’s Enterprises, Inc. 950 S.
Miami, Florida 4,850 200 Limited Partnership 4/1/00 to 3/31/25 Option to 3/31/30 Flanigan’s Seafood Bar and Grill #75 Flanigan’s Enterprises, Inc. 950 S.
Square Footage Seats Franchised/ Owned by Lease Terms Flanigan’s Seafood Bar and Grill #50 CIC Investors #50, Ltd. 17185 Pines Boulevard Pembroke Pines, Florida 4,000 200 Limited Partnership 10/24/06 to 10/23/26 and Options to 10/23/31 Flanigan’s Seafood Bar and Grill #55 CIC Investors #55, Ltd. 2190 S.
(11) 11225 Miramar Parkway, #250 Miramar, Florida 6,000 200 Limited Partnership 3/5/22 to 3/5/32 Options to 3/5/47 Flanigan’s Seafood Bar and Grill #50 CIC Investors #50, Ltd. 17185 Pines Boulevard Pembroke Pines, Florida 4,000 200 Limited Partnership 10/24/06 to 10/23/26 and Options to 10/23/31 Flanigan’s Seafood Bar and Grill #55 CIC Investors #55, Ltd. 2190 S.
We plan to raise funds to renovate this new location for operation as a “Flanigan’s” restaurant using our limited partnership ownership model. (11) During the fourth quarter of our fiscal year 2019, we entered into a lease for this location. We are developing this new location for operation as a “Big Daddy’s Wine & Liquors” retail package liquor store.
We raised funds to renovate this new location for operation as a “Flanigan’s” restaurant using our limited partnership ownership model, which location opened for business in April 2023. (12) During the fourth quarter of our fiscal year 2019, we entered into a lease for this location.
The one (1) year terrorist insurance premium is in the amount of $8,900; and (vii) For the policy year beginning December 30, 2021, our equipment breakdown insurance is a one (1) year policy. The one (1) year equipment breakdown insurance premium is in the amount of $6,800.
The one (1) year crime coverage insurance premium is in the amount of $1,000; and (vii) For the policy year beginning December 30, 2023, our terrorism insurance is a one (1) year policy. The one (1) year terrorism insurance premium is in the amount of $19,000.
Our loss was covered by insurance, including but not limited to business interruption coverage. (9) During the second quarter of our fiscal year 2019, we entered into a lease for this location, which lease was subsequently assigned to a limited partnership.
We anticipate that the restaurant in Hollywood, Florida (Store #19R) will open for business in March 2024. 28 (10) During the second quarter of our fiscal year 2019, we entered into a lease for this location, which lease was subsequently assigned to a limited partnership.
(2) Lease assigned to franchisee. (3) In 1974, we sold and assigned the underlying ground lease to unaffiliated third parties and simultaneously subleased it back. We have re-purchased from the unaffiliated third parties and currently own 52% of the underlying ground lease, as well as the sublease agreement.
We have re-purchased from the unaffiliated third parties and currently own 52% of the underlying ground lease, as well as the sublease agreement. As a result, we pay all rent due under the ground lease, but only 48% of the rent due under the sublease agreement.
All of our units require periodic refurbishing in order to remain competitive. We have budgeted $1,000,000 for our refurbishing program for fiscal year 2022.
All of our units require periodic refurbishing in order to remain competitive. We have budgeted $450,000 for our refurbishing program for fiscal year 2024, although capital expenditures of our refurbishing program for our fiscal year 2024 may be significantly higher. See Item 7, "Liquidity and Capital Resources" for discussion of the amounts spent in fiscal year 2023.
The finance agreement is secured by a first priority security interest in all insurance policies, all unearned premium, return premiums, dividend payments and loss payments thereof. Except as otherwise provided herein, subsequent events have been evaluated through the date these consolidated financial statements were issued and no other events required disclosure.
Subsequent events have been evaluated through the date these consolidated financial statements were issued and except as disclosed herein, no other events required disclosure.
Of the $2,542,000 annual premium amounts, which includes coverage for our franchises which are not included in our consolidated financial statements, we financed $2,328,000 through an unaffiliated third party lender.
Of the $3,932,000 annual premium amounts, which includes coverage for our franchises which are not included in our consolidated financial statements, we will pay the annual premium amounts in full with no financing due to high interest rates.
The option to purchase was retained by the Company when the lease was assigned to the limited partnership and the option to purchase was exercised by the Company during the second quarter of our fiscal year 2021. 35 Table of Contents (10) During the fourth quarter of our fiscal year 2019, we entered into a lease for this location, which lease was subsequently assigned to a limited partnership.
We raised funds to renovate this new location for operation as a “Flanigan’s” restaurant using our limited partnership ownership model. This restaurant opened for business in March 2022. (11) During the fourth quarter of our fiscal year 2019, we entered into a lease for this location, which lease was subsequently assigned to a limited partnership.
Purchase of 4 COP Liquor License During the third quarter of our fiscal 2021, we purchased a 4 COP quota liquor license, which permits the sale of beer, wine and liquor for on and/or off premise consumption, for Broward County, Florida from an unrelated third party for $192,200.
Purchase of 4 COP Liquor License During our fiscal year 2022, we purchased a 4 COP Quota Liquor License for Broward County, Florida from an unrelated third party for $446,000. The liquor license is currently in use in connection with the operation of our new package liquor store in Miramar, Florida (Store #24).
Miramar, Florida (“Big Daddy’s Wine & Liquors”) During the fourth quarter of our fiscal year 2019, we entered into a Lease Agreement with a non-affiliated third party, (the “Landlord”), to rent approximately 2,000 square feet of commercial space for a restaurant location in a shopping center at 11225 Miramar Parkway, #245, Miramar, Florida 33024 (Store #24), which shopping center was under construction and where we anticipate opening a new retail package liquor store.
Purchase of Real Property; 4 COP Liquor License El Portal, Florida (“Big Daddy’s Liquors”/Warehouse) During the third quarter of our fiscal year 2023, we closed with a non-affiliated third party on the purchase of the real property it owns located at 8600 Biscayne Boulevard, El Portal, Florida consisting of approximately 6,000 square feet of commercial space which we sublease and where our “Big Daddy’s Liquors” package liquor store and our warehouse (Store #47) operate for $3,200,000.
Removed
See Item 7, "Liquidity and Capital Resources" for discussion of the amounts spent in fiscal year 2021. 30 Table of Contents The following table summarizes information related to the properties upon which our operations are conducted: Name and Location Approx. Square Footage Seats Franchised/ Owned by Lease Terms Big Daddy's Liquors #4 Flanigan's Enterprises Inc.
Added
Subsequent to the fire, (i) we have constructed a 3,000 square foot stand-alone building on the vacant parcel of real property for the operation of our Company-owned package liquor store (Store #19P), which opened for business during the first quarter of our fiscal year 2023; and (ii) are constructing a 4,500 square foot stand-alone building here for the operation of the Company-owned restaurant, (Store #19R), which we anticipate will open for business during our fiscal year 2024; (v) a 4,600 square foot stand-alone building located in Fort Lauderdale, Florida that we purchased in August 2010 and which since December 1968 has housed our Fort Lauderdale, Florida Company-owned restaurant (Store #22); (vi) a 5,100 square foot stand-alone building in North Miami, Florida that we purchased in November 2010; the two parcels of real property adjacent thereto which we purchased in December 2012, one of which is contiguous to the real property and which we previously leased for non-exclusive parking and the vacant parcel of real property adjacent to the two parcels of real property which we purchased in March 2017.
Removed
(10) 11225 Miramar Parkway, #250 Miramar, Florida 6,000 200 Limited Partnership 3/5/22 to 3/5/32 Options to 3/5/47 33 Table of Contents Name and Location Approx.
Added
The following table summarizes information related to the properties upon which our operations are conducted. For all locations that include lease options, the lessor must extend the term of the lease for a location if we exercise the lease option.
Removed
Sunrise, Florida 6,900 200 Limited Partnership Company-Owned Flanigan's Seafood Bar and Grill #90 CIC Investors #90 Ltd. 9857 S.W. 40 th Street Miami, Florida 6,400 200 Limited Partnership 4/1/11 to 3/31/31 Option to 3/31/36 34 Table of Contents Name and Location Approx.
Added
If there is no lease option or if we do not exercise the same, the lessor is not required to extend the term of the lease upon expiration. Name and Location Approx. Square Footage Seats Franchised/ Owned by Lease Terms Big Daddy's Liquors #4 Flanigan's Enterprises Inc.
Removed
While it was initially contemplated that Store #19 would be renovated, because of the damage caused by the fire, we determined that Store #19 should be demolished and rebuilt. As a result, the package liquor store and restaurant has been closed since our first quarter year 2019.
Added
Sunrise, Florida 6,900 200 Limited Partnership 3/1/19 to 2/28/29 Options to 2/28/44 Company-Owned 27 Name and Location Approx.
Removed
We plan to raise funds to renovate this new location for operation as a “Flanigan’s Seafood Bar and Grill” restaurant using our limited partnership ownership model.
Added
(13) 615 – 715 E. Hallandale Beach Blvd. Hallandale Beach, Florida 5,450 Company Company-owned shopping center (1) Franchised by Company. (2) Lease assigned to franchisee. We are no longer contingently liable on the lease. (3) In 1974, we sold and assigned the underlying ground lease to unaffiliated third parties and simultaneously subleased it back.
Removed
Due to the damage caused by the fire, we determined that Store #19 should be demolished and rebuilt and as a result, the package liquor store and restaurant were closed for our fiscal years 2021, 2020 and 2019.
Added
As a result, the package liquor store has been closed since our first quarter year 2019, but re-opened for business subsequent to the end of our fiscal year 2022 in a newly constructed stand-alone building. (9) During the first quarter of our fiscal year 2019, our combination package liquor store and restaurant located at 2505 N.
Removed
Purchase of Real Property North Lauderdale, Florida (“Flanigan’s Seafood Bar and Grill”/”Big Daddy’s Liquors”) On October 7, 2014, we entered into an Amendment to Lease Agreement (the “Lease Amendment”) with a non-affiliated third party from whom we rented approximately 4,600 square feet of commercial space located at 5450 N.
Added
University Drive, Hollywood, Florida (Store #19), was damaged by a fire and was forced to close. We determined that Store #19 should be demolished and rebuilt as separate buildings. During our first quarter year 2023 we opened our company owned newly built stand-alone package liquor store in Hollywood, Florida (Store #19P) for business.
Removed
State Road 7, North Lauderdale, Florida where we operate a combination “Flanigan’s Seafood Bar and Grill” restaurant and “Big Daddy’s Liquors” package liquor store (Store #40).
Added
During our fiscal year 2023, we also continued constructing a stand-alone building on the same site in Hollywood, Florida adjacent to Store #19P, replacing our restaurant destroyed by fire which previously operated at that site (Store #19R).
Removed
The Lease Amendment extended the term of the Lease Agreement until December 31, 2020 and granted us the option to purchase, (the “Option to Purchase”), the real property and improvements through December 31, 2020 for $1,200,000.
Added
This new location opened for business as a “Big Daddy’s Wine & Liquors” retail package liquor store in March 2023.
Removed
During the fourth quarter of our fiscal year 2020 we exercised the Option to Purchase and closed on the acquisition of the property on December 31, 2020. We paid all cash at closing.
Added
(13) During the third quarter of our fiscal year 2023, we closed on the purchase of a three building shopping center in Hallandale Beach, Florida adjacent to our combination package store and restaurant in Hallandale Beach, Florida (Store #31), which consists of: (A) one stand-alone building which is leased to two unaffiliated third party retailers; (B) the second stand-alone building which is leased to one unaffiliated third party retailer; and (C) the third stand-alone building which is leased to one unaffiliated third party retailer.
Removed
Sunrise, Florida (“Flanigan’s Seafood Bar and Grill”) During the second quarter of our fiscal year 2019, we entered into a Lease Agreement (the “Sunrise Lease Agreement”) with a non-affiliated third party to rent approximately 6,900 square feet of commercial space located at 14301 W. Sunrise Boulevard, Sunrise, Florida where, subject to certain conditions, we anticipate opening a new restaurant location.
Added
We believe the restaurant will reopen for business in our fiscal year 2024 in a newly constructed stand-alone building where our combination package liquor store and restaurant was previously located. Private Offerings CIC Investors #85, Ltd.
Removed
The Sunrise Lease Agreement granted us an option to purchase, (the “Option to Purchase”) the real property and improvements by March 2, 2021 for $4,800,000. During the third quarter of our fiscal year 2019, we assigned the Sunrise Lease Agreement, excluding the Option to Purchase, to a newly formed limited partnership.
Added
(Flanigan’s, Sunrise, Florida) On February 15, 2022, a Florida limited partnership (CIC Investors #85, Ltd.) in which the Company serves as general partner, completed a private placement of 1,000 Units of limited partnership interests at $5,000 per Unit for proceeds of $5,000,000, 74 Units of which ($370,000) were purchased by the Company upon the same terms and conditions as all other investors.
Removed
During the first quarter of our fiscal year 2021, we exercised the Option to Purchase and during the second quarter of our fiscal year 2021 we closed on the acquisition of the real property located at 14301 W. Sunrise Boulevard, Sunrise, Florida.
Added
The proceeds of the private placement were used to satisfy (including reimbursement to us for advances we have made), build-out and renovation expenses and the purchase of such furniture, fixtures and equipment necessary for operation of our Sunrise, Florida restaurant under the service mark “Flanigan’s”, which commenced operations on March 22, 2022.
Removed
We financed this acquisition with a loan from an unrelated third party lender in the principal amount of $2.2 million and paid cash for the balance.
Added
Capital raised from private investors is credited to sale of noncontrolling interests in our Statements of Stockholders’ Equity.
Removed
The mortgage loan accrues interest at the fixed annual rate of 3.65%, is amortized over fifteen (15) years, and requires us to pay monthly payments of principal and interest in the amount of $15,900 with the entire principal balance and all accrued but unpaid interest due in March, 2036.
Added
Under ASC 810, Consolidation, the Company, which is the entity issuing financial statements, is required to consolidate CIC Investors #85, Ltd. as we have a controlling interest in CIC Investors #85, Ltd. as general partner, although the Company only has a 7.40% ownership. CIC Investor #25, Ltd.
Removed
The liquor license is currently inactive, but we intend to use it in connection with the operation of a package liquor store we are developing in Miramar, Florida. 36 Table of Contents Execution of Leases for New Locations Miramar, Florida (“Flanigan’s”) During the fourth quarter of our fiscal year 2019, we entered into a Lease Agreement with a non-affiliated third party, (the “Landlord”), to rent approximately 6,000 square feet of commercial space for a restaurant location in a shopping center at 11225 Miramar Parkway, #250, Miramar, Florida 33024 (Store #25), which shopping center was under construction and where we anticipate opening a new restaurant location.
Added
(Flanigan’s, Miramar, Florida) On February 15, 2022, a Florida limited partnership (CIC Investors #25, Ltd.) in which the Company serves as general partner, completed a private placement of 800 Units of limited partnership interests at $5,000 per Unit for gross proceeds of $4,000,000. No units of limited partnership interest were purchased by the Company.
Removed
We assigned this Lease Agreement to a newly formed limited partnership in which we currently are (i) the sole general partner; and (ii) our wholly owned subsidiary is the sole limited partner.
Added
The proceeds of the private placement were used to satisfy (including reimbursement to us for advances we have made), build-out and renovation expenses and the purchase of such furniture, fixtures and equipment necessary for operation of our Miramar, Florida restaurant under the service mark “Flanigan’s”, which opened for business on April 18, 2023.
Removed
While there can be no assurances that we will be successful in doing so, we are currently selling limited partnership interests to third parties, as well as affiliates of the Company, in order to raise net proceeds in an amount of $4,000,000, which proceeds will be used to build out this potential restaurant location.
Added
Capital raised from private investors is credited to sale of noncontrolling interests in our Statements of Stockholders’ Equity.
Removed
The new restaurant location’s ownership and operating structure will be substantially similar to that of our other restaurants owned by limited partnerships.
Added
Under ASC 810, Consolidation, the Company, which is the entity issuing financial statements, is required to consolidate CIC Investors #25, Ltd. as we have a controlling interest in CIC Investors #25, Ltd. as general partner, although the Company has no direct ownership. 29 Execution of Lease for New Location; Business Acquisition of “Brendan’s Sports Pub” Lease Pompano Beach, Florida (Brendan’s Sports Pub) During the third quarter of our fiscal year 2022, we entered into a Lease (the “BSP Lease”) with a non-affiliated third party from whom we rented approximately 3,556 square feet of commercial space located at 868 South Federal Highway, Pompano Beach, Florida, where we operate “Brendan’s Sports Pub” (Store #30), the assets of which we simultaneously purchased.
Removed
Any amounts we advance to the limited partnership will be applied as a credit to limited partnership equity in the limited partnership we may acquire (which equity shall be purchased at the same price and upon the same terms as other equity investors). Any excess amounts advanced by us will be reimbursed to us by the limited partnership without interest.
Added
The term of the BSP Lease is for fifty (50) years, triple net to the landlord with fixed rent of $78,000 per year, with two (2%) percent annual increases commencing in year five.
Removed
Subsequent to the end of the third quarter of our fiscal year 2021, we received notification from the Landlord that it had completed substantially all of the Landlord’s work under the Lease Agreement and was delivering possession of the leased premises to us.
Added
Assets Brendan’s Sports Pub, Pompano Beach, Florida During the third quarter of our fiscal year 2022 and simultaneously with the execution of the BSP Lease, we purchased the assets of the business known as “Brendan’s Sports Pub” located at 868 South Federal Highway, Pompano Beach, Florida for a purchase price of $75,000, including but not limited to the furniture, fixtures, equipment and service mark, “Brendan’s Sports Pub”, but excluding the 4 COP liquor license used in the operation of the business.
Removed
The new package liquor store location will be Company-owned. Subsequent to the end of the third quarter of our fiscal year 2021, we received notification from the Landlord that it had completed substantially all of the Landlord’s work under the Lease Agreement and was delivering possession of the leased premises to us.
Added
We did not assume any obligations of the business. We accounted for the purchase of the assets of the business known as “Brendan’s Sports Pub” as a business combination that is insignificant for purposes of all of the disclosures required under ASC 805.
Removed
Extension of Leases for Existing Locations Pinecrest, Florida During the second quarter of our fiscal year 2021, the lease with an unrelated third party for the space located at 11415 S. Dixie Highway, Pinecrest, Florida (Store #13) where a limited partnership owned restaurant operates, was extended through January 31, 2031 with one (1) five (5) year renewal option.

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Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed1 unchanged
Biggest changeTo date, none of this litigation, some of which is covered by insurance, has had a material effect on us. 39 Table of Contents
Biggest changeTo date, none of this litigation, some of which is covered by insurance, has had a material effect on us.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+1 added−1 removed2 unchanged
Biggest changeDuring our fiscal year 2020, due to the negative effects of COVID 19 on our operations, our Board of Directors cancelled a previously declared cash dividend of $.30 per share to shareholders of record on March 20, 2020 and payable on April 3, 2020.
Biggest changeDuring our fiscal year 2022, our Board of Directors declared a cash dividend of $1.00 per share to shareholders of record on March 31, 2022 and was made payable on April 19, 2022.
Since the Board’s 2007 authorization, we have purchased an aggregate of 34,586 shares, none of which were purchased by us in our fiscal year 2021. As of October 2, 2021, we still have authority to purchase 65,414 shares of our common stock under the discretionary plan approved by the Board of Directors.
Since the Board’s 2007 authorization, we have purchased an aggregate of 34,586 shares, none of which were purchased by us in our fiscal year 2023. As of September 30, 2023, we still have authority to purchase 65,414 shares of our common stock under the discretionary plan approved by the Board of Directors.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Our common stock is traded on the NYSE AMERICAN under the symbol “BDL”. Holders As of the close of business on December 31, 2021, there were approximately 164 holders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Our common stock is traded on the NYSE AMERICAN under the symbol “BDL”. Holders As of the close of business on December 18, 2023, there were approximately 158 holders of record of our common stock.
Removed
Dividend Policy During our fiscal year 2021, we did not declare or pay a cash dividend on our capital stock.
Added
Dividend Policy During our fiscal year 2023, our Board of Directors declared a cash dividend of $0.45 per share to shareholders of record on June 12, 2023 and was made payable on June 26, 2023.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

74 edited+41 added−58 removed8 unchanged
Biggest changeItem Oct. 2, 2021 Oct. 3, 2020 (in Thousands) Current Assets $ 39,790 $ 36,508 Current Liabilities 20,223 25,362 Working Capital $ 19,567 $ 11,146 Our working capital increased as of October 2, 2021 from our working capital as of October 3, 2020 due to (i) our receipt of $3.46 million from the 2 nd PPP Loans and (ii) our receipt of $2.8 million from our re-financing of our mortgage loan encumbering the real property and improvements located at 13105 – 13205 Biscayne Boulevard, North Miami, Florida where our Flanigan’s Seafood Bar and Grill restaurant and Big Daddy’s Liquors retail package liquor store operate (Store #20), increasing the principal amount borrowed from $1.5 million to $4.3 million. 51 Table of Contents While there can be no assurance due to, among other things, unanticipated expenses or unanticipated decline in revenues, or both, we believe that our cash on hand, cash flow from operations and funds available from our borrowings will adequately fund operations, debt reductions and planned capital expenditures throughout our fiscal year 2022.
Biggest changeCurrent assets as of September 30, 2023 decreased due to our decision not to finance our insurance premiums for the annual period beginning December 30, 2022, as well as the current year investments in the purchase of property. 39 While there can be no assurance due to, among other things, unanticipated expenses or unanticipated decline in revenues, or both, we believe that our cash on hand, positive cash flow from operations and borrowed funds will adequately fund operations, debt reductions and planned capital expenditures throughout our fiscal year 2024.
Sales and purchases of fish are recognized in restaurant food sales and restaurant and lounges (cost of merchandise sold), respectively, in the consolidated statements of income at the time of sale to the restaurant. In addition, the 49% of FFC owned by the unrelated third party is recognized as noncontrolling interest in our consolidated financial statements.
Sales and purchases of fish are recognized in restaurant food sales and restaurant and lounges (cost of merchandise sold), respectively, in the consolidated statements of income at the time of sale to the restaurant. In addition, the 49% of FFC owned by the unrelated third party is recognized as a noncontrolling interest in our consolidated financial statements.
Prior to these increases, we previously raised menu prices in the third quarter of our fiscal year 2019. COVID-19 has and will continue to materially and adversely affect our restaurant business for what may be a prolonged period of time.
Prior to these increases, we previously raised menu prices in the third quarter of our fiscal year 2021. COVID-19 has and will continue to materially and adversely affect our restaurant business for what may be a prolonged period of time.
Affiliated Limited Partnership Owned Units . We manage and control the operations of the eight restaurants owned by limited partnerships, except the Fort Lauderdale, Florida restaurant which is managed and controlled by a related franchisee.
Affiliated Limited Partnership Owned Units . We manage and control the operations of the ten restaurants owned by limited partnerships, except the Fort Lauderdale, Florida restaurant which is managed and controlled by a related franchisee.
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.
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 tax credits to the extent that realization of said tax benefits is more likely than not.
This damage and disruption has resulted from events and factors that were impossible for us to predict and are beyond our control. As a result, COVID-19 has materially adversely affected our results of operations for our fiscal year 2021 and will, in all likelihood, impact our results of operations, liquidity and/or financial condition throughout our fiscal year 2022.
This damage and disruption has resulted from events and factors that were impossible for us to predict and are beyond our control. As a result, COVID-19 has materially adversely affected our results of operations for the fiscal year 2023 and will, in all likelihood, impact our results of operations, liquidity, and/or financial condition throughout our fiscal year 2024.
All intercompany transactions are eliminated in consolidation. The non-controlling interests in the earnings of these limited partnerships are removed from net income and are not included in the calculation of earnings per share.
The non-controlling interests in the earnings of these limited partnerships are removed from net income and are not included in the calculation of earnings per share.
New Limited Partnership Restaurants As new restaurants open, our income from operations will be adversely affected due to our obligation to advance pre-opening costs, including but not limited to pre-opening rent for the new locations. During our fiscal year 2021, we had one new restaurant location in Sunrise, Florida in the development stage.
New Limited Partnership Restaurants As new restaurants open, our income from operations will be adversely affected due to our obligation to advance pre-opening costs, including but not limited to pre-opening rent for the new locations. During our fiscal year 2023, we opened one new restaurant location in Miramar, Florida as a “Flanigan’s”.
Accordingly, the results of operations of all limited partnership owned restaurants, except the Fort Lauderdale, Florida restaurant are consolidated with our results of operations for accounting purposes.
Accordingly, the results of operations of all limited partnership owned restaurants, except the Fort Lauderdale, Florida restaurant are consolidated with our results of operations for accounting purposes. The results of operations of the Fort Lauderdale, Florida restaurant are accounted for by us utilizing the equity method.
General As of October 2, 2021, we (i) operated 27 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) franchises an additional five units, consisting of two restaurants (one of which we operate) and three combination restaurants/package liquor stores. Franchised Units .
General As of September 30, 2023, we (i) operated 31 units, consisting of restaurants, sports bar, package liquor stores and combination restaurants/package liquor stores that we either own or have operational control over and partial ownership in; and (ii) franchises an additional five units, consisting of two restaurants (one of which we operate) and three combination restaurants/package liquor stores.
Operating costs and expenses decreased as a percentage of total revenue to approximately 93.70% in our fiscal year 2021 from 97.42% in our fiscal year 2020. Gross Profit . Gross profit is calculated by subtracting the cost of merchandise sold from sales. Restaurant Food and Bar Sales .
Operating costs and expenses increased as a percentage of total revenue to approximately 95.97% in our fiscal year 2023 from 95.62% in fiscal year 2022. Gross Profit . Gross profit is calculated by subtracting the cost of merchandise sold from sales. Restaurant Food and Bar Sales .
Occupancy costs (consisting of percentage rent, common area maintenance, repairs, real property taxes, amortization of leasehold purchases and rent expense associated with operating lease liabilities under ASC 842) for our fiscal year 2021 decreased $445,000 or 6.32% to $6,595,000 from $7,040,000 for our fiscal year 2020.
Occupancy costs (consisting of percentage rent, common area maintenance, repairs, real property taxes, amortization of leasehold purchases and rent expense associated with operating lease liabilities under ASC 842) for our fiscal year 2023 increased $535,000 or 7.61% to $7,566,000 from $7,031,000 for our fiscal year 2022.
Gross profit margin for restaurant food and bar sales decreased during our fiscal year 2021 when compared to our fiscal year 2020 due to higher food costs, offset among other things by the Recent Price Increases. Package Liquor Store Sales .
Gross profit margin for restaurant food and bar sales increased during our fiscal year 2023 when compared to our fiscal year 2022 due to decreases in our cost of ribs and the Recent Price Increases, partially offset by among other things, higher food costs. Package Store Sales .
Restaurant revenue generated from the sale of food, including non-alcoholic beverages, at restaurants totaled $84,466,000 for our fiscal year 2021 as compared to $68,685,000 for our fiscal year 2020.
Restaurant revenue generated from the sale of food, including non-alcoholic beverages, at restaurants totaled $107,238,000 for our fiscal year 2023 as compared to $97,429,000 for our fiscal year 2022.
Payroll and related costs as a percentage of total revenue was 31.66% for our fiscal year 2021 and 31.33% of total revenue for our fiscal year 2020. Occupancy Costs .
Payroll and related costs as a percentage of total revenue was 32.46% for our fiscal year 2023 and 31.45% of total revenue for our fiscal year 2022. Occupancy Costs .
Selling, general and administrative expenses decreased as a percentage of total revenue in our fiscal year 2021 to 14.77% as compared to 17.63% for our fiscal year 2020. We anticipate that our selling, general and administrative expenses as a percentage of total revenue will increase through our fiscal year 2022 due primarily to increases in expenses across all categories.
We anticipate that our selling, general and administrative expenses as a percentage of total revenue will increase during our fiscal year 2024 due primarily to increases across all categories.
Restaurant revenue generated from the sale of alcoholic beverages at restaurants totaled $20,832,000 for our fiscal year 2021 as compared to $15,967,000 for our fiscal year 2020.
Restaurant revenue generated from the sale of alcoholic beverages at restaurants totaled $29,000,000 for our fiscal year 2023 as compared to $26,198,000 for our fiscal year 2022.
Revenue generated from sales of liquor and related items at package liquor stores totaled $29,304,000 for our fiscal year 2021 as compared to $26,276,000 for our fiscal year 2020, an increase of $3,028,000.
Revenue generated from sales of liquor and related items at package liquor stores totaled $35,187,000 for our fiscal year 2023 as compared to $31,692,000 for our fiscal year 2022, an increase of $3,495,000.
Menu Price Increases and Trends During the third quarter of our fiscal year 2021, we increased menu prices for our food offerings (effective April 11, 2021) to target an increase to our food revenues of approximately 4.60% annually to offset higher food costs and higher overall expenses.
Menu Price Increases and Trends During the fiscal year 2023, we increased menu prices for our food offerings (effective March 26, 2023) to target an aggregate increase to our food revenues of approximately 2.06% annually and we increased menu prices for our bar offerings (effective March 20, 2023) to target an increase to our bar revenues of approximately 5.65% annually to offset higher food and liquor costs and higher overall expenses.
The extent to which our restaurant business may be adversely impacted and its effect on our operations, liquidity and/or financial condition cannot be accurately predicted. 45 Table of Contents LIQUIDITY AND CAPITAL RESOURCES We fund our operations through cash from operations and borrowings from third parties.
The extent to which our restaurant business may be adversely impacted and its effect on our operations, liquidity and/or financial condition cannot be accurately predicted.
During the first quarter of our fiscal year 2021, we increased menu prices for our bar offerings (effective November 29, 2020) to target an increase to our bar revenues of approximately 1.83% annually and we increased menu prices for our food offerings (effective December 6, 2020) to target an increase to our food revenues of approximately 2.45% annually to offset higher food costs and higher overall expenses.
During the fiscal year 2022, we increased menu prices for our food offerings (effective October 3, 2021 and December 19, 2021, respectively) to target an aggregate increase to our food revenues of approximately 8.83% annually and we increased menu prices for our bar offerings (effective December 12, 2021) to target an increase to our bar revenues of approximately 7.80% annually to offset higher food and liquor costs and higher overall expenses.
As a percentage of total revenue, depreciation and amortization expense was 2.23% of revenue for our fiscal year 2021 and 2.87% of revenue for our fiscal year 2020. Interest Expense, Net . Interest expense, net, for our fiscal year 2021 increased $102,000 to $938,000 from $836,000 for our fiscal year 2020.
As a percentage of total revenue, depreciation and amortization expense was 2.06% of revenue for our fiscal year 2023 and 1.90% of revenue for our fiscal year 2022. Interest Expense, Net . Interest expense, net, for our fiscal year 2023 increased $310,000 to $1,067,000 from $757,000 for our fiscal year 2022.
Selling, General and Administrative Expenses . Selling, general and administrative expenses (consisting of general corporate expenses, including but not limited to advertising, insurance, professional costs, clerical and administrative overhead) for our fiscal year 2021 increased $358,000 or 1.80% to $20,275,000 from $19,917,000 for our fiscal year 2020.
Selling, General and Administrative Expenses . Selling, general and administrative expenses (consisting of general corporate expenses, including but not limited to advertising, insurance, professional costs, clerical and administrative overhead) for our fiscal year 2023 increased $5,330,000 or 18.29% to $31,901,000 from $26,571,000 for our fiscal year 2022.
Issued There are no recently issued accounting pronouncements that we have not yet adopted that we believe will have a material effect on our financial statements. 52 Table of Contents Critical Accounting Policies Our significant accounting policies are more fully described in Note 1 to our consolidated financial statements located in Item 8 of this Annual Report on Form 10-K.
Critical Accounting Policies Our significant accounting policies are more fully described in Note 1 to our consolidated financial statements located in Item 8 of this Annual Report on Form 10-K.
Operating Costs and Expenses . Operating costs and expenses, (consisting of cost of merchandise sold, payroll and related costs, occupancy costs and selling, general and administrative expenses), for our fiscal year 2021 increased $18,591,000 or 16.89% to $128,657,000 from $110,066,000 for our fiscal year 2020.
Operating costs and expenses, (consisting of cost of merchandise sold, payroll and related costs, occupancy costs and selling, general and administrative expenses), for our fiscal year 2023 increased $16,169,000 or 10.69% to $167,372,000 from $151,203,000 for our fiscal year 2022.
Additionally, during the fourth quarter of our fiscal year 2020, we entered into an agreement with a third party unaffiliated general contractor for interior renovations at this location totaling $1,236,000 and during our fiscal year 2021 we agreed to change orders to the agreement for additional interior renovations increasing the total contract price by $197,000 to $1,433,000, of which $1,081,000 has been paid through October 2, 2021 and an additional $187,000 has been paid subsequent to the end of our fiscal year 2021.
Sunrise Boulevard, Sunrise, Florida (Store #85- "Flanigan's') During the second quarter of our fiscal year 2022, we entered into an agreement with a third party unaffiliated general contractor for exterior renovations at this location totaling $343,000 and through the end of our fiscal year 2023 we agreed to change orders to the agreement increasing the total contract price by $327,000 to $670,000, of which the full amount has been paid as of the end of our fiscal year 2023.
Gross profit for food and bar sales for our fiscal year 2021 increased to $69,324,000 from $56,134,000 for our fiscal year 2020. Our gross profit margin for restaurant food and bar sales (calculated as gross profit reflected as a percentage of restaurant food and bar sales), was 65.84% for our fiscal year 2021 and 66.31% for our fiscal year 2020.
Gross profit for food and bar sales for our fiscal year 2023 increased to $90,750,000 from $79,072,000 for our fiscal year 2022. Our gross profit margin for restaurant food and bar sales (calculated as gross profit reflected as a percentage of restaurant food and bar sales), was 66.61% for our fiscal year 2023 and 63.96% for our fiscal year 2022.
As a percentage of revenue, net income attributable to stockholders for our fiscal year 2021 is 8.58%, as compared to 0.98% for our fiscal year 2020.
As a percentage of revenue, net income attributable to stockholders for our fiscal year 2023 is 2.29%, as compared to 3.99% for our fiscal year 2022.
Effective December 6, 2020 and then effective April 11, 2021 we increased menu prices for our food offerings to target an increase to our food revenues of approximately 2.45% and 4.60% annually, respectively, to offset higher food costs and higher overall expenses and effective November 29, 2020 we increased menu prices for our bar offerings to target an increase to our bar revenues of approximately 1.83% annually, (collectively the “Recent Price Increases”).
Additionally, effective March 26, 2023 we increased menu prices for our food offerings to target an increase to our food revenues of approximately 2.06% and effective March 19, 2023 we increased menu prices for our bar offerings to target an increase to our bar revenues of approximately 5.65% annually, to offset higher food costs and higher overall expenses (collectively the “Recent Price Increases”).
We anticipate that our occupancy costs will increase through our fiscal year 2022 due to the commencement of rent for our retail package liquor store location in a shopping center at 11225 Miramar Parkway, #245, Miramar, Florida (Store #24) and our restaurant location in a shopping center at 11225 Miramar Parkway, #250, Miramar, Florida (Store #25).
The increase in occupancy costs was primarily due to the payment of rent for our retail package liquor store located at 11225 Miramar Parkway, #250, Miramar, Florida (Store #24), our restaurant location located at 11225 Miramar Parkway, #250, Miramar, Florida (Store #25) and Brendan’s Sports Pub (Store #30) during our entire fiscal year 2023 as opposed to a part of our fiscal year 2022.
Net income for our fiscal year 2021 increased $14,581,000 or 667.63% to $16,765,000 from $2,184,000 for our fiscal year 2020 due primarily to the forgiveness of debt of certain of the PPP Loans and increased revenue at our retail package liquor stores and restaurants, offset by higher food costs and overall expenses.
Net income for our fiscal year 2023 decreased $3,633,000 or 40.15% to $5,416,000 from $9,049,000 for our fiscal year 2022 due primarily to the higher income attributable to the forgiveness of debt of certain of our PPP Loans during our fiscal year 2022, higher food costs and overall increased expenses during our fiscal year 2023, partially offset by increased revenue at our retail package liquor stores and restaurants during our fiscal year 2023 and the Recent Price Increases.
Subsequent to the end of our fiscal year 2021, we entered into an agreement with a third party unaffiliated general contractor to re-build our restaurant at this location totaling $2,515,000, of which none has been paid. (c) 14301 W.
During the first quarter of our fiscal year 2022, we entered into an agreement with a third party unaffiliated general contractor to re-build our restaurant at this location totaling $2,515,000 and during our fiscal year 2023 we agreed to change orders increasing the total contract price by $1,021,000 to $3,536,000, of which $1,534,000 has been paid through September 30, 2023 and $1,090,000 has been paid subsequent to the end of our fiscal year 2023. 38 (b) 14301 W.
During the second quarter of our fiscal year 2021, six of the entities owning limited partnership stores (the “LP’s”) and the store we manage but do not own (the “Managed Store”) (collectively, the “Borrowers”), applied for and received net amounts of approximately $3.98 million from the 2 nd PPP Loans, of which approximately: (i) $3.46 million was loaned to six of the LP’s ; and (ii) $0.52 million was loaned to the Managed Store.
During the second quarter of our fiscal year 2021, certain of the entities owning the limited partnership stores (the “LP’s”), as well as the store we manage but do not own (the “Managed Store”) (collectively, the “Borrowers”), applied for and received loans from an unrelated third party lender (the “Lender”) pursuant to the Paycheck Protection Program (the “PPP”) under the United States Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) enacted March 27, 2020, in the aggregate principal amount of approximately $3.98 million (the “2 nd PPP Loans”), of which approximately: (i) $3.46 million was loaned to six (6) of the LP’s; and (ii) $0.52 million was loaned to the Managed Store.
OVERVIEW Financial Information Concerning Industry Segments Our business is conducted in two segments: the restaurant segment and the package liquor store segment. Financial information broken into these two industry segments for the two fiscal years ended October 2, 2021 and October 3, 2020 is set forth in the Consolidated Financial Statements which are attached hereto.
Financial information broken into these two principal industry segments for the two fiscal years ended September 30, 2023 and October 1, 2022 is set forth in the Consolidated Financial Statements which are attached hereto.
This standard had a material impact on the Consolidated Balance Sheets due to the recording of a right-of-use asset and lease liability and on the Consolidated Statements of Income due to the escalations of rent in the extensions but did not have a material impact on the Consolidated Statement of Cash Flows.
We adopted the standard in the first quarter of fiscal 2020, using the modified retrospective approach. This standard had a material impact on our Consolidated Statements of Income due to the escalations of rent in the extensions but did not have a material impact on the Consolidated Statement of Cash Flows.
In addition to the general partnership interest we also purchased limited partnership units ranging from 5% to 49% of the total units outstanding. As a result of these controlling interests, we consolidate the operations of these limited partnerships with ours despite the fact that we do not own in excess of 50% of the equity interests.
As a result of these controlling interests, we consolidate the operations of these limited partnerships with ours despite the fact that we do not own in excess of 50% of the equity interests. All intercompany transactions are eliminated in consolidation.
This increase was primarily due to increased package liquor store traffic due to what appears to be continued increased demand for package liquor store products resulting from COVID-19 and notwithstanding the fifty third week in our fiscal year 2020.
This increase was primarily due to increased package liquor store traffic due to what appears to be continued increased demand for package liquor store products resulting from the COVID-19 pandemic and package liquor sales generated from the opening of our package liquor store in Hollywood, Florida (Store #19P) in December 2022 and the opening of our package liquor store in Miramar, Florida (Store #24) in March, 2023.
Purchase of Limited Partnership Interests During our fiscal years 2020 and 2021, we did not purchase any limited partnership interests. Working Capital The table below summarizes the current assets, current liabilities, and working capital as of the end of our fiscal years 2021 and 2020.
Working Capital The table below summarizes the current assets, current liabilities, and working capital as of the end of our fiscal years 2023 and 2022.
Flanigan’s Fish Company, LLC As of October 2, 2021, Flanigan’s Fish Company, LLC, a Florida limited liability company (“FFC”) supplies certain of the fish to all of our restaurants. Since we hold the controlling interest of FFC, the balance sheet and operating results of this entity are consolidated into the accompanying financial statements of the Company.
Since we hold the controlling interest of FFC, the balance sheet and operating results of this entity are consolidated into the accompanying financial statements of the Company.
CASH FLOWS The following table is a summary of our cash flows for our fiscal years 2021 and 2020. ---------Fiscal Years -------- 2021 2020 (in thousands) Net cash and cash equivalents provided by operating activities $ 14,361 $ 8,785 Net cash used in investing activities (11,901 ) (3,271 ) Net cash provided by financing activities 294 10,736 Net Increase in Cash and Cash Equivalents 2,754 16,250 Cash and Cash Equivalents, Beginning 29,922 13,672 Cash and Cash Equivalents, Ending $ 32,676 $ 29,922 46 Table of Contents Capital Expenditures In addition to using cash for our operating expenses, we use cash to fund the development and construction of new restaurants and to fund capitalized property improvements for our existing restaurants.
CASH FLOWS The following table is a summary of our cash flows for our fiscal years 2023 and 2022. ---------Fiscal Years-------- 2023 2022 (in thousands) Net cash provided by operating activities $ 8,489 $ 10,502 Net cash used in investing activities (18,559 ) (9,542 ) Net cash (used in) provided by financing activities (6,536 ) 8,502 Net (Decrease) Increase in Cash and Cash Equivalents (16,606 ) 9,462 Cash and Cash Equivalents, Beginning 42,138 32,676 Cash and Cash Equivalents, Ending $ 25,532 $ 42,138 Capital Expenditures In addition to using cash for our operating expenses, we use cash generated from operations and borrowings to fund the development and construction of new restaurants and to fund capitalized property improvements for our existing restaurants.
Gross profit for package store sales for our fiscal year 2021 decreased to $6,956,000 from $7,084,000 for our fiscal year 2020. Our gross profit margin, (calculated as gross profit reflected as a percentage of package liquor store sales), for package store sales was 23.74% for our fiscal year 2021 and 26.96% for our fiscal year 2020.
Gross profit for package store sales for our fiscal year 2023 increased to $9,377,000 from $8,382,000 for our fiscal year 2022. Our gross profit margin, (calculated as gross profit reflected as a percentage of package liquor store sales), for package store sales was 26.65% for our fiscal year 2023 and 26.45% for our fiscal year 2022.
The new guidance requires that lease arrangements be presented on the lessee’s balance sheet by recording a right-of-use asset and a lease liability equal to the present value of the related future minimum lease payments. We adopted the standard in the first quarter of fiscal 2020, using the modified retrospective approach.
Leases Effective September 29, 2019, we adopted Accounting Standards Codification Topic 842, Leases (“ASC 842”), which requires that lease arrangements be presented on the lessee’s balance sheet by recording a right-of-use asset and a lease liability equal to the present value of the related future minimum lease payments.
We expect that restaurant food sales, including non-alcoholic beverages, for our fiscal year 2022 will increase due to increased restaurant traffic and the Recent Price Increases. 42 Table of Contents Restaurant Bar Sales .
We expect that restaurant food sales, including non-alcoholic beverages, for our fiscal year 2024 will increase due to increased restaurant traffic, Store #25 being open for business for our entire fiscal year 2024 and the opening of our reconstructed restaurant in Hollywood, Florida (Store #19R) for business during our fiscal year 2024. Restaurant Bar Sales .
Prior to these increases, we previously raised menu prices in the third quarter of our fiscal year 2019. We expect that total revenue for our fiscal year 2022 will increase due to increased traffic and the Recent Price Increases.
Prior to these increases, we previously raised menu prices in the first quarter of our fiscal year 2022. We note that the Recent Price Increases also contributed to our increased revenues Restaurant Food Sales .
As of October 2, 2021, we are in compliance with the covenants of all loans with our lenders. We repaid long term debt, including auto loans, financed insurance premiums and mortgages in the amount of $4,100,000 and $2,540,000 in our fiscal years 2021 and 2020, respectively.
We repaid long term debt, including auto loans, financial insurance premiums, and mortgages in the amount of $2,299,000 and $3,736,000 in our fiscal years 2023 and 2022, respectively.
Comparable weekly restaurant bar sales for Company owned restaurants only was $172,000 and $135,000 for our fiscal years 2021 and 2021, respectively, an increase of 27.41%. Comparable weekly restaurant bar sales for affiliated limited partnership owned restaurants only was $229,000 and $166,000 for our fiscal years 2021 and 2021, respectively, an increase of 37.95%.
Comparable weekly restaurant bar sales for Company owned restaurants only was $196,000 and $211,000 for our fiscal years 2023 and 2022, respectively, a decrease of 7.11%. Comparable weekly restaurant bar sales for affiliated limited partnership owned restaurants only was $286,000 and $276,000 for our fiscal years 2023 and 2022 respectively, an increase of 3.62%.
Subsequent to the end of our fiscal year 2021, we applied for and received forgiveness of the entire principal amount and all accrued interest of the 2 nd PPP Loans.
During the first quarter of our fiscal year 2022, we applied for forgiveness for all PPP Loans, including the Managed Store, and as of September 30, 2023, the entire amount of principal and accrued interest was forgiven under the 2 nd PPP Loans.
Net income attributable to stockholders for our fiscal year 2021 increased $10,674,000 or 961.62% to $11,784,000 from $1,110,000 for our fiscal year 2020 due primarily to the forgiveness of debt of the PPP Loans and increased revenue at our retail package liquor stores and restaurants, offset by higher food costs and overall expenses.
Net income attributable to stockholders for our fiscal year 2023 decreased $2,313,000 or 36.64% to $3,999,000 from $6,312,000 for our fiscal year 2022 due primarily to the higher income attributable to the forgiveness of debt of certain of our PPP Loans during our fiscal year 2022, higher food costs and overall increased expenses during our fiscal year 2023, and a higher portion of net income attributable to noncontrolling interests (specifically the operations of our Miramar location), partially offset by increased revenue at our retail package liquor stores and restaurants during our fiscal year 2023 and the Recent Price Increases.
During our fiscal year 2022, we plan to use certain funds on-hand, borrowed funds and/or insurance proceeds (i) to construct a new building on the real property we own located at 7990 Davie Road Extension, Hollywood, Florida, (Store #19 package), to develop the “Big Daddy’s Wine & Liquors” retail package liquor store location; (ii) to construct a new building on the real property we own located at 2505 N.
During our fiscal year 2024, we plan to use certain funds on-hand, borrowed funds, and/or insurance proceeds to complete the construction of our new building on the real property we own located at 2505 N. University Drive Hollywood, Florida (Store #19R) where we plan to operate our “Flanigan’s” restaurant.
Consolidation of Limited Partnerships As of October 2, 2021, we operate eight (8) restaurants as general partner of the limited partnerships that own the operations of these restaurants. We expect that any expansion which takes place in opening new restaurants will also result in us operating the restaurants as general partner.
We expect that any expansion which takes place in opening new restaurants will also result in us operating the restaurants as general partner. In addition to the general partnership interest we also purchased limited partnership units ranging from 0% to 49% of the total units outstanding.
A large number of restaurant personnel are paid at rates based upon applicable minimum wage and increases in minimum wage directly affect labor costs. Although inflation has had a material impact on our operating results, we have offset increased costs by increasing our menu prices. 53 Table of Contents
Other Matters Impact of Inflation The primary inflationary factors affecting our operations are food, beverage and labor costs. A large number of restaurant personnel are paid at rates based upon applicable minimum wage and increases in minimum wage directly affect labor costs. Inflation is having a material impact on our operating results, especially rising food, fuel and labor costs.
We expect that restaurant bar sales, including non-alcoholic beverages, for our fiscal year 2022 will increase due to increased restaurant traffic and the Recent Price Increases. Package Liquor Store Sales .
We expect that restaurant bar sales for our fiscal year 2024 will increase due to increased restaurant traffic, Store #25 being open for business for our entire fiscal year 2024 and the opening of our reconstructed restaurant in Hollywood, Florida (Store #19R) for business during our fiscal year 2024. Package Liquor Store Sales .
We discuss such risks, uncertainties and other factors throughout this report and specifically under the captions “Risk Factors”. In addition, the following discussion and analysis should be read in conjunction with the 2021 Consolidated Financial Statements and the related Notes to Consolidated Financial Statements included elsewhere in this report.
We discuss such risks, uncertainties and other factors throughout this report and specifically under the captions “Risk Factors”.
In order to ensure adequate supply of baby back ribs for our restaurants for calendar year 2022, on October 4, 2021, we entered into a purchase agreement with our current rib supplier, whereby we agreed to purchase approximately $10,414,000 of baby back ribs during calendar year 2022 from this vendor at market cost.
Purchase Commitments/Supply In order to fix the cost and ensure adequate supply of baby back ribs for our restaurants for calendar years 2023 and 2024, we entered into purchase agreements with our current rib supplier, whereby we agreed to purchase approximately $7.0 million of “2.25 & Down Baby Back Ribs” (industry jargon for the weight range in which slabs of baby back ribs are sold) from this vendor during calendar year 2023, at a prescribed cost, which we believe is competitive.
The increase in restaurant food sales for our fiscal year 2021 as compared to restaurant food sales during our fiscal year 2020 is attributable to increased restaurant traffic, the Recent Price Increases and the comparatively more adverse effects of COVID-19 on our operations during our fiscal year 2020 as compared with our fiscal year 2021 and notwithstanding the fifty third week in our fiscal year 2020.
The increase in restaurant food sales for our fiscal year 2023 as compared to restaurant food sales during our fiscal year 2022 is attributable to the Recent Price Increases, restaurant food sales generated from the opening of our limited partnership owned restaurant in Miramar, Florida (Store #25) in April 2023, and the operation of our limited partnership owned restaurant in Sunrise, Florida (Store #85) and the operation of Brendan’s Sports Pub (Store #30) for our entire fiscal year 2023 as opposed to a part of our fiscal year 2022 and the comparatively greater adverse effects of COVID-19 on our operations during the our fiscal year 2022 as compared with our fiscal year 2023.
Income tax for our fiscal year 2021 was an expense of $1,185,000, as compared to a benefit of $60,000 for our fiscal year 2020. Net Income.
Income tax for our fiscal year 2023 was an expense of $649,000, as compared to an expense of $763,000 for our fiscal year 2022. Income taxes as a percentage of income before provision for income taxes increased for our fiscal year 2023 (10.70%) as compared to our fiscal year 2022 (7.78%). Net Income.
The increase in restaurant bar sales during our fiscal year 2021 as compared to restaurant bar sales during our fiscal year 2020 is primarily due to increased restaurant traffic, the Recent Price Increases and the comparatively more adverse effects of COVID-19 on our operations during our fiscal year 2020 as compared with our fiscal year 2021 and notwithstanding the fifty third week in our fiscal year 2020.
The increase in restaurant bar sales during our fiscal year 2023 is primarily due to the Recent Price Increases, restaurant bar sales generated from the opening of our limited partnership owned restaurant in Miramar, Florida (Store #25) in April 2023, and the operation of our limited partnership owned restaurant in Sunrise, Florida (Store #85) and the operation of Brendan’s Sports Pub (Store #30) for our entire fiscal year 2023 as opposed to a part of our fiscal year 2022 and the comparatively greater adverse effects of COVID-19 on our operations during the our fiscal year 2022 as compared with our fiscal year 2023.
During our fiscal year 2020, we acquired property and equipment of $2,766,000, (of which $379,000 was for construction in progress; $118,000 was deposits recorded in other assets; and $10,000 was deposits transferred to construction in progress as of September 28, 2019), which amount included $278,000 for renovations to two (2) existing limited partnership restaurant and $466,000 for renovations to five (5) Company-owned restaurants.
During our fiscal year 2022, we acquired property and equipment of $12,655,000 (of which $3,849,000 was for construction in progress; $3,258,000 construction in progress transferred to property and equipment; $969,000 construction in progress in accounts payable; $50,000 was deposits recorded in other assets; and $512,000 was deposits transferred to construction in progress as of October 2, 2021), which amount included $937,000 for renovations to three (3) existing limited partnership restaurants and $159,000 for renovations to two (2) Company-owned restaurants. 37 Debt As of September 30, 2023, we had long term debt (including the current portion) of $23,128,000, as compared to $25,389,000 as of October 1, 2022.
Comparable weekly restaurant food sales for Company-owned restaurants only was $797,000 and $649,000 for our fiscal years 2021 and 2020 respectively, an increase of 22.80%. Comparable weekly restaurant food sales for affiliated limited partnership owned restaurants only was $813,000 and $638,000 for our fiscal years 2021 and 2020, respectively, an increase of 27.43%.
Comparable weekly restaurant food sales for Company owned restaurants only was $835,000 and $886,000 for our fiscal years 2023 and 2022, respectively, a decrease of 5.76%.
Depreciation and Amortization. Depreciation and amortization expense for our fiscal year 2021, which is included in selling, general and administrative expenses, decreased $177,000 or 5.46% to $3,063,000 from $3,240,000 from our fiscal year 2020.
Depreciation and amortization expense for our fiscal year 2023, which is included in selling, general and administrative expenses, increased $572,000 or 18.99% to $3,584,000 from $3,012,000 from our fiscal year 2022. This increase is driven by the opening of Stores #19P, #24, and #25.
The weekly average of same store package liquor store sales, which includes nine (9) Company-owned package liquor stores, (excluding the package liquor store which in combination with the Hollywood Restaurant was the subject of a fire in October 2018 (Store #19), but including our new package liquor store located at 12776 S.W. 88 th Street, Miami, Florida, which opened for business on October 10, 2019 (Store #45)), was $564,000 and $496,000 for our fiscal years 2021 and 2020 respectively, an increase of 13.71%.
The weekly average of same store package liquor store sales, which includes nine (9) Company-owned package liquor stores, (excluding Store #19P, which was closed for our fiscal year 2022 due to a fire on October 2, 2018 but re-opened for business during the first quarter of our fiscal year 2023 and excluding Store #24 which opened for business during the second quarter of our fiscal year 2023), was $631,000 and $609,000 for our fiscal years 2023 and 2022 respectively, an increase of 3.61%.
As a percentage of revenue, net income in our fiscal year 2021 is 12.21%, as compared to 1.93% in our fiscal year 2020. 44 Table of Contents Net Income Attributable to Stockholders.
As a percentage of revenue, net income for our fiscal year 2023 is 3.11%, as compared to 5.72% for our fiscal year 2022. Net Income Attributable to Flanigan’s Enterprise, Inc. Stockholders.
We anticipate that the gross profit margin for package liquor store merchandise will decrease during our fiscal year 2022 due to higher costs and a reduction in pricing of certain package store merchandise to be more competitive. 43 Table of Contents Payroll and Related Costs .
We anticipate that the gross profit margin for package liquor store merchandise will remain stable during our fiscal year 2024. Payroll and Related Costs . Payroll and related costs for our fiscal year 2023 increased $6,871,000 or 13.81% to $56,607,000 from $49,736,000 for our fiscal year 2022.
Comparable weekly restaurant food sales (for restaurants, other than for closures due to COVID-19, open for all of our fiscal years 2021 and 2020, respectively, which consists of nine restaurants owned by us, (excluding the Hollywood Restaurant) and eight restaurants owned by affiliated limited partnerships) was $1,610,000 and $1,287,000 for our fiscal years 2021 and 2020, respectively, an increase of 25.10%.
Comparable weekly restaurant food sales (for restaurants open for all of our fiscal years 2023 and 2022 respectively, which consists of nine restaurants owned by us and nine restaurants owned by affiliated limited partnerships, (excluding our Miramar, Florida location (Store #25), Brendan’s Sports Pub, (Store #30), and Sunrise, Florida location (Store #85), which opened for business during the third quarter of our fiscal year 2023, the third quarter of our fiscal year 2022 and the second quarter of our fiscal year 2022, respectively) was $1,734,000 and $1,798,000 for our fiscal years 2023 and 2022, respectively, a decrease of 3.56%.
For discussion regarding our carryforwards refer to Note 9 to the consolidated financial statements for our fiscal year 2021. Other Matters Impact of Inflation The primary inflationary factors affecting our operations are food, beverage and labor costs.
For discussion regarding our carryforwards refer to Note 12 to the consolidated financial statements for our fiscal year 2023.
These estimated lives are reviewed periodically and adjusted if necessary. Any necessary adjustment to depreciation expense is made in the income statement of the period in which the adjustment is determined to be necessary.
Any necessary adjustment to depreciation expense is made in the income statement of the period in which the adjustment is determined to be necessary. 40 Consolidation of Limited Partnerships As of September 30, 2023, we operate ten (10) restaurants as general partner of the limited partnerships that own the operations of these restaurants.
Interest expense, net, increased for our fiscal year 2021 due to interest on our borrowing of $2,200,000 during the second quarter of our fiscal year 2021 from an unrelated third party lender used to finance our purchase of the real property and improvements located at 14301 West Sunrise Boulevard, Sunrise, Florida (Store #85) (the “$2.2 Million Borrowing”), interest on our borrowing of $4,300,000 during the third quarter of our fiscal year 2021 from an unrelated third party lender to re-finance our mortgage loan of our property located at 13105 – 13205 Biscayne Boulevard, North Miami, Florida (the “$4.3 Million Borrowing”), and the borrowing by six of our limited partnerships of an additional approximately $3.35 million of 2 nd PPP Loans during the second quarter of our fiscal year 2021.
Interest expense, net, increased for our fiscal year 2023 due to the interest on our borrowing of $8,900,000 from an unrelated third party lender to re-finance the mortgage loan on our property located at 4 N.
We intend to use the excess funds we received from the re-financing of this mortgage loan for working capital purposes. 47 Table of Contents (c ) Financed Insurance Premiums During our fiscal year 2021, we financed the premiums on the following property, general liability, excess liability and terrorist policies, totaling approximately $1.94 million, which property, general liability, excess liability and terrorist insurance includes coverage for our franchises which are not included in our consolidated financial statements: (i) For the policy year beginning December 30, 2020, our general liability insurance, excluding limited partnerships, is a one (1) year policy with our insurance carriers.
Due to higher interest rates, during the first quarter of our fiscal year 2023, for the policy year commencing December 30, 2022, we paid the premiums for property, general liability, excess liability and terrorist policies, totaling approximately $3.281 million, in full, which includes coverage for our franchisees (which is $658,000), which are not included in our consolidated financial statements.
Comparable weekly restaurant bar sales (for restaurants, other than for closures due to COVID-19, open for all of our fiscal years 2021 and 2020, respectively, which consists of nine restaurants owned by us, (excluding the Hollywood Restaurant), and eight restaurants owned by affiliated limited partnerships) was $401,000 and $301,000 for our fiscal years 2021 and 2020 respectively, an increase of 33.22%.
Comparable weekly restaurant bar sales (for restaurants open for all of our fiscal years 2023 and 2022 respectively, which consists of nine restaurants owned by us and nine restaurants owned by affiliated limited partnerships, (excluding our Miramar, Florida location (Store #25), Brendan’s Sports Pub (Store #30), and Sunrise, Florida (Store #85), which opened for business during the third quarter of our fiscal year 2023, the third quarter of our fiscal year 2022 and the second quarter of our fiscal year 2022, respectively) was $481,000 for our fiscal year 2023 and $487,000 for our fiscal year 2022, a decrease of 1.23%.
Our purchase agreement provides for the purchase of 2.25 & Down Baby Back Ribs, at a monthly cost of the average market price per pound of the prior 4 weeks. While we anticipate purchasing all of our rib supply from this vendor, we believe there are several other alternative vendors available, if needed.
While we anticipate purchasing all of our rib supply from this vendor, we believe there are several other alternative vendors available, if needed. Flanigan’s Fish Company, LLC As of September 30, 2023, Flanigan’s Fish Company, LLC, a Florida limited liability company (“FFC”) supplies certain of the fish to all of our restaurants.
During our fiscal year 2021, we acquired property and equipment of $13,255,000, (of which $58,000 was for the purchase of a motor vehicle; $3,229,000 was for the purchase of real property; $4,416,000 was for construction in progress; $14,000 was deposits recorded in other assets; and $48,000 was deposits transferred to construction in progress as of October 3, 2020), which amount included $464,000 for renovations to two (2) existing limited partnership restaurant and $440,000 for renovations to five(5) Company-owned restaurants.
During the fiscal year 2023, we acquired property and equipment and construction in progress of $20,574,000, (including non-cash items which include $2,390,000 of purchase deposits transferred to property and equipment and $545,000 of purchase deposits transferred to construction in progress and $931,000 of construction in progress in accounts payable) including $367,000 for renovations to three (3) existing limited partnership owned restaurants and $378,000 for renovations to three (3) Company owned restaurants.
Total revenue for our fiscal year 2021 increased $24,330,000 or 21.54% to $137,307,000 from $112,977,000 for our fiscal year 2020 due primarily to increased package liquor store and restaurant sales, increased menu prices and the comparatively more adverse effects of COVID-19 on our operations during our fiscal year 2020 as compared with our fiscal year 2021 and notwithstanding the fifty third week in our fiscal year 2020.
Total revenue for our fiscal year 2023 increased $16,264,000 or 10.29% to $174,396,000 from $158,132,000 for our fiscal year 2022 due primarily to increased package liquor store and restaurant sales, increased menu prices, revenue generated from the opening of our limited partnership owned restaurant in Miramar, Florida (Store #25) in April 2023, the operation of our limited partnership owned restaurant in Sunrise, Florida (Store #85) and the operation of Brendan’s Sports Pub (Store #30) for our entire fiscal year 2023 as opposed to a part of our fiscal year 2022, the opening of the package liquor store in Hollywood, Florida (Store #19P) in December 2022, the opening of the package liquor store in Miramar, Florida (Store #24) in March, 2023 and the comparatively less adverse effects of COVID-19 on our operations for our current fiscal year.
We expect that the new package liquor store located at 7990 Davie Road Extension, Hollywood, Florida) will open for business during our fiscal year 2022 and we expect to generate revenue from it. We do not anticipate that the restaurant located at 2505 N.
We expect that package liquor store sales for our fiscal year 2024 will increase due to increased package liquor store traffic and the operation of the package liquor stores located at 7990 Davie Road Extension, Hollywood, Florida (Store #19P) which opened for business during the first quarter of our fiscal year 2023 and located at 11225 Miramar Parkway #245, Miramar, Florida (Store #24), which opened for business during the second quarter of our fiscal year 2023, for the entire fiscal year. 34 Operating Costs and Expenses .
The increase was primarily due to payroll and an expected general increase in food costs, offset by actions taken by management to reduce and/or control costs. We anticipate that our operating costs and expenses will continue to increase through our fiscal year 2022 for the same reasons.
The increase was primarily due to increased payroll, increased consultant fees to improve our accounting process and an expected general increase in food costs, costs and expenses incurred from the opening of the package liquor stores in Hollywood, Florida (Store #19P) and Miramar, Florida (Store #24), during our fiscal year 2023, the opening of our limited partnership owned restaurant in Miramar, Florida (Store #25) during our fiscal year 2023, and the operation of our Brendan’s Sports Pub (Store #30) and limited partnership owned restaurant in Sunrise, Florida (Store #85) for our entire fiscal year 2023 but only a part of our fiscal year 2022, partially offset by actions taken by management to reduce and/or control costs.
Removed
The results of operations of the Fort Lauderdale, Florida restaurant are accounted for by us utilizing the equity method. 41 Table of Contents RESULTS OF OPERATIONS REVENUES (in thousands): 52 Weeks Ended 53 Weeks Ended October 2, 2021 October 3, 2020 Amount (In thousands) Percent Amount (In thousands) Percent Restaurant food sales $ 84,466 62.75% $ 68,685 61.9% Restaurant bar sales 20,832 15.48% 15,967 14.4% Package store sales 29,304 21.77% 26,276 23.7% Total Sales $ 134,602 100.00% $ 110,928 100.00% Franchise related revenues 1,673 1,260 Rental income 770 680 Other operating income (Loss) 262 109 Total Revenue $ 137,307 $ 112,977 Comparison of Fiscal Years Ended October 2, 2021 and October 3, 2020 Revenues.
Added
In addition, the following discussion and analysis should be read in conjunction with the 2023 and 2022 Consolidated Financial Statements and the related Notes to Consolidated Financial Statements included elsewhere in this report. 32 OVERVIEW Financial Information Concerning Industry Segments Our business is conducted principally in two segments: the restaurant segment and the package liquor store segment.
Removed
University Drive, Hollywood, Florida, which has been closed since October, 2018 due to a fire (the”Hollywood restaurant”) will open for business during our fiscal year 2022 and accordingly we do not expect to generate any revenue from it. Restaurant Food Sales .
Added
RESULTS OF OPERATIONS REVENUES (in thousands): -----------------------52 Weeks Ended----------------------- September 30, 2023 October 1, 2022 Amount Amount (In thousands) Percent (In thousands) Percent Restaurant food sales $ 107,238 62.56 $ 97,429 62.73 Restaurant bar sales 29,000 16.92 26,198 16.87 Package store sales 35,187 20.52 31,692 20.40 Total Sales $ 171,425 100.00 $ 155,319 100.00 Franchise related revenues 1,857 1,826 Rental income 951 814 Other operating income 163 173 Total Revenue $ 174,396 $ 158,132 33 Comparison of Fiscal Years Ended September 30, 2023 and October 1, 2022 Revenues.
Removed
Payroll and related costs for our fiscal year 2021 increased $8,066,000 or 22.79% to $43,465,000 from $35,399,000 for our fiscal year 2020. Payroll and related costs for the fiscal year 2021 were higher due primarily to increased performance bonuses and higher costs for employees such as cooks.
Added
Comparable weekly restaurant food sales for affiliated limited partnership owned restaurants only, (excluding Store #25 which opened for business during the third quarter of our fiscal year 2023 and Store #85 which opened for business during the second quarter of our fiscal year 2022), was $898,000 and $912,000 for our fiscal years 2023 and 2022 respectively, a decrease of 1.54%.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

8 edited+2 added−6 removed0 unchanged
Biggest changeIn January 2013, we refinanced the mortgage loan encumbering the property where our combination package liquor store and restaurant located at 4 N. Federal Highway, Hallandale, Florida, (Store #31) operates, which mortgage loan is held by an unaffiliated third party lender (the “$1.405M Loan”).
Biggest changeThe debt instrument further provides that the “BSBY Screen Rate is a rate of interest equal to the Bloomberg Short-Term Bank Yield Interest Rate or successor thereto approved by the lender. In September 2022, we refinanced the mortgage loan encumbering the property where our combination package liquor store and restaurant located at 4 N.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK As part of our ongoing operations, we are exposed to interest rate fluctuations on our borrowings. As more fully described in Note 12 “Fair Value Measurements of Financial Instruments” to the Consolidated Financial Statements included in “Item 8.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK As part of our ongoing operations, we are exposed to interest rate fluctuations on our borrowings. As more fully described in Note 15 “Fair Value Measurements of Financial Instruments” to the Consolidated Financial Statements included in “Item 8.
Financial Statements and Supplementary Data” of this Annual Report on Form 10-K for our fiscal year ended October 2, 2021, we use interest rate swap agreements to manage these risks. These instruments are not used for speculative purposes but are used to modify variable rate obligations into fixed rate obligations.
Financial Statements and Supplementary Data” of this Annual Report on Form 10-K for our fiscal year ended September 30, 2023, we use interest rate swap agreements to manage these risks. These instruments are not used for speculative purposes but are used to modify variable rate obligations into fixed rate obligations.
At October 2, 2021, our cash resources earn interest at variable rates. Accordingly, our return on these funds is affected by fluctuations in interest rates. There is no assurance that interest rates will increase or decrease over our next fiscal year or that an increase will not have a material adverse effect on our operations.
Accordingly, our return on these funds is affected by fluctuations in interest rates. There is no assurance that interest rates will increase or decrease over our next fiscal year or that an increase will not have a material adverse effect on our operations.
The Term Loan Swap requires us to pay interest for a five (5) year period at a fixed rate of 4.61% on an initial amortizing notional principal amount of $5,500,000, while receiving interest for the same period at LIBOR – 1 Month, plus 2.25%, on the same amortizing notional principal amount.
The $8.90M Term Loan Swap requires us to pay interest for a fifteen (15) year period at a fixed rate of 4.90% on an initial amortizing notional principal amount of $8,900,000, while receiving interest for the same period at BSBY Screen Rate – 1 Month, plus 1.50%, on the same amortizing notional principal amount.
We are currently party to the following two (2) interest rate swap agreements: (i) The first interest rate swap agreement entered into in January 2013 relates to the $1.405M Loan (the “$1.405M Term Loan Swap”).
We are currently party to the following interest rate swap agreement: 41 (i) The interest rate swap agreement entered into in September 2022 relates to the $8.90M Loan (the “$8.90M Term Loan Swap”).
At October 2, 2021, we had two variable rate debt instruments outstanding that are impacted by changes in interest rates. The interest rate of both variable rate debt instruments is equal to the lender’s LIBOR Rate plus two and one-quarter percent (2.25%) per annum.
At September 30, 2023, we had one variable rate instrument outstanding that is impacted by changes in interest rates. The interest rate of our variable rate debt instrument is equal to the lender’s BSBY Screen Rate plus one and one-half percent (1.50%) per annum.
As a means of managing our interest rate risk on these debt instruments, we entered into interest rate swap agreements with our unrelated third party lender to convert these variable rate debt obligations to fixed rates.
Federal Highway, Hallandale Beach, Florida, (Store #31) operates, which mortgage loan is held by an unaffiliated third-party lender (the “$8.90M Loan”). As a means of managing our interest rate risk on this debt instrument, we entered into an interest rate swap agreement with our unrelated third-party lender to convert this variable rate debt obligation to a fixed rate.
Removed
The debt instruments further provide that the “LIBOR Rate” is a rate of interest equal to the British Bankers Association LIBOR Rate or successor thereto approved by the lender if the British Bankers Association is no longer making a LIBOR rate available.
Added
As of September 30, 2023 the fair value of the swap agreement is now reflected on the balance sheet in other assets and accumulated other comprehensive income. We determined that the interest rate swap agreement is an effective hedging agreement and that changes in fair value will be adjusted quarterly based on the valuation statement.
Removed
In December 2016, we closed on a secured revolving line of credit which entitled us to borrow, from time to time through December 28, 2017, up to $5,500,000 (the “Credit Line”), which on December 28, 2017 converted to a term loan (the “Term Loan”).
Added
During our fiscal year 2023, we invested the aggregate sum of $900,000 in 90-day certificates of deposit, fully government guaranteed and at an average fixed annual interest rate of 4.87%. Otherwise, as on September 30, 2023, our cash resources offset our bank charges and any excess cash resources earn interest at variable rates.
Removed
The $1.405M Term Loan Swap requires us to pay interest for a twenty (20) year period at a fixed rate of 4.35% on an initial amortizing notional principal amount of $1,405,000, while receiving interest for the same period at LIBOR – 1 Month, plus 2.25%, on the same amortizing notional principal amount.
Removed
We determined that at October 2, 2021, the interest rate swap agreement is an effective hedging agreement and the fair value was not material; and (ii) The second interest rate swap agreement entered into in December 2016 and became effective December 28, 2017, relates to the Term Loan (the “Term Loan Swap”).
Removed
We determined that at October 2, 2021, the interest rate swap agreement is an effective hedging agreement and the fair value was not material Pursuant to our institutional lender, beginning January 1, 2022 it will no longer originated, renew or modify loans at LIBOR, except in limited situations which include transactions which reduce or hedge LIBOR exposure on contracts entered into before January 1, 2022.
Removed
LIBOR rates will be published until June 30, 2023 and all principal and interest of the $1.405M Loan will be due in full on January 23, 2023 and all principal and interest of the Term Loan will be fully amortized and paid in full as of December 28, 2022 so the discontinuance of LIBOR rates will have no impact on us.

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