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What changed in FLANIGANS ENTERPRISES INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of FLANIGANS ENTERPRISES INC's 2023 and 2024 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 2024 report.

+274 added−345 removedSource: 10-K (2024-12-27) vs 10-K (2023-12-29)

Top changes in FLANIGANS ENTERPRISES INC's 2024 10-K

274 paragraphs added · 345 removed · 231 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

69 edited+8 added−28 removed62 unchanged
Biggest changeInformation 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.
Biggest changeWhile we anticipate purchasing all of our rib supply from this new vendor, we believe there are several other alternative vendors available, if needed. 6 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.
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.
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.
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 Federal Insurance Contributions Act (FICA tax assessments for unreported or underreported tips.
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.
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 limited partnership interest is owned by persons who are either our officers, directors or their family members.
West Miami, Florida We are the sole general partner and a 27% limited partner in this limited partnership which has owned and operated a restaurant in West Miami, Florida under our “Flanigan’s Seafood Bar and Grill” service mark since October 11, 2001. 32.7% of the remaining limited partnership interest is owned by persons who are either our officers, directors or their family members.
West Miami, Florida We are the sole general partner and a 27% limited partner in this limited partnership which has owned and operated a restaurant in West Miami, Florida under our “Flanigan’s Seafood Bar and Grill” service mark since October 11, 2001. 32.7% of the limited partnership interest is owned by persons who are either our officers, directors or their family members.
Kendall, Florida We are the sole general partner and a 41% limited partner in this limited partnership which has owned and operated a restaurant in Kendall, Florida under our “Flanigan’s Seafood Bar and Grill” service mark since April 4, 2000. 28.3% of the remaining limited partnership interest is owned by persons who are either our officers, directors or their family members.
Kendall, Florida We are the sole general partner and a 41% limited partner in this limited partnership which has owned and operated a restaurant in Kendall, Florida under our “Flanigan’s Seafood Bar and Grill” service mark since April 4, 2000. 28.3% of the limited partnership interest is owned by persons who are either our officers, directors or their family members.
We provide sales training to our package liquor store personnel. The stores are open for business seven days a week from 9:00-10:00 a.m. to 9:00-10:00 p.m., depending upon demand and local law. Most of our units have "night windows" with extended evening hours. Company-Owned Package Liquor Stores .
We provide sales training to our package liquor store personnel. The stores are open for business seven days a week from 9:00-10:00 a.m. to 10:00-11:00 p.m., depending upon demand and local law. Most of our units have "night windows" with extended evening hours. Company-Owned Package Liquor Stores .
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.
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 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.
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.
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 sports bar establishment offer alcoholic beverages and food service with abundant portions and reasonable prices, served in a relaxed, friendly and casual atmosphere.
Negotiations with food suppliers are conducted by our purchasing department at our corporate headquarters. We believe this ensures that the best quality and prices will be available to each restaurant. Orders for food products are prepared by each restaurant's kitchen manager and reviewed by the restaurant's general manager before orders are placed.
Negotiations with food suppliers are conducted by our purchasing department at our corporate headquarters. We believe this ensures that the best quality and prices will be available to each restaurant. Orders for food products are regularly prepared by each restaurant's kitchen manager and reviewed by the restaurant's general manager before orders are placed.
In exchange for our providing management and related services to the franchisee and our granting the right to the franchisee to use our service mark, “Big Daddy’s Liquors”, franchisees of package liquor stores pay us weekly in arrears, (i) a royalty equal to approximately 1% of gross sales; plus (ii) an amount for advertising equal to between 1-1/2% to 3% of gross sales generated at the stores depending upon our actual advertising costs.
In exchange for our providing management and related services to the franchisee and our granting the right to the franchisee to use our service mark, “Big Daddy’s Liquors”, franchisees of package liquor stores pay us weekly in arrears, (i) a royalty equal to approximately 1% of gross sales; plus (ii) an amount for advertising equal to between 1.5% to 3% of gross sales generated at the stores depending upon our actual advertising costs.
In exchange for our providing management and related services to the franchisee and our granting the right to the franchisee to use our service mark, “Flanigan’s Seafood Bar and Grill”, our franchisees pay us weekly in arrears, (i) a royalty equal to approximately 3% of gross sales; plus (ii) an amount for advertising equal to between 1-1/2% to 3% of gross sales from the restaurants depending upon our actual advertising costs.
In exchange for our providing management and related services to the franchisee and our granting the right to the franchisee to use our service mark, “Flanigan’s Seafood Bar and Grill”, our franchisees pay us weekly in arrears, (i) a royalty equal to approximately 3% of gross sales; plus (ii) an amount for advertising equal to between 1.5% to 3% of gross sales from the restaurants depending upon our actual advertising costs.
During our fiscal years 2023 and 2022, 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. We are subject to “dram-shop” statutes due to our restaurant operations.
During our fiscal years 2024 and 2023, 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. We are subject to “dram-shop” statutes due to our restaurant operations.
This 3% fee is “earned” when sales are made by the limited partnerships and is paid weekly, in arrears. Whether we will have any additional restaurants under development in the future will be dependent, among other things, on market conditions and our ability to raise capital.
This 3% fee is “earned” when sales are made by the limited partnerships and is paid weekly, in arrears. Whether we will have any additional restaurants in the future will be dependent, among other things, on market conditions and our ability to raise capital.
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.
We give out approximately 85,000 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.
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.
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. 21.9% of the limited partnership interest is owned by persons who are either our officers, directors or their family members.
Pembroke Pines, Florida We are the sole general partner and a 24% limited partner in this limited partnership which has owned and operated a restaurant in Pembroke Pines, Florida under our “Flanigan’s Seafood Bar and Grill” service mark since October 29, 2007. 23.8% of the remaining limited partnership interest is owned by persons who are either our officers, directors or their family members.
Pembroke Pines, Florida We are the sole general partner and a 24% limited partner in this limited partnership which has owned and operated a restaurant in Pembroke Pines, Florida under our “Flanigan’s Seafood Bar and Grill” service mark since October 29, 2007. 23.0% of the limited partnership interest is owned by persons who are either our officers, directors or their family members.
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.
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 1,847 in our restaurants. None of our employees are represented by collective bargaining organizations.
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.
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 in total to HOPE mission.
Davie, Florida We are the sole general partner and a 49% limited partner in this limited partnership which has owned and operated a restaurant in Davie, Florida under our “Flanigan’s Seafood Bar and Grill” service mark since July 28, 2008. 12.3% of the remaining limited partnership interest is owned by persons who are either our officers, directors or their family members.
Davie, Florida We are the sole general partner and a 49% limited partner in this limited partnership which has owned and operated a restaurant in Davie, Florida under our “Flanigan’s Seafood Bar and Grill” service mark since July 28, 2008. 12.0% of the limited partnership interest is owned by persons who are either our officers, directors or their family members.
Miami, Florida We are the sole general partner and a 5% limited partner in this limited partnership which has owned and operated a restaurant in Miami, Florida under our “Flanigan’s Seafood Bar and Grill” service mark since December 27, 2012. 26.8% of the remaining limited partnership interest is owned by persons who are either our officers, directors or their family members.
Miami, Florida We are the sole general partner and a 5% limited partner in this limited partnership which has owned and operated a restaurant in Miami, Florida under our “Flanigan’s Seafood Bar and Grill” service mark since December 27, 2012. 26.3% of the limited partnership interest is owned by persons who are either our officers, directors or their family members.
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).
In March 1985, we began franchising package liquor stores and lounges in the South Florida area. (See Note 12 to the consolidated financial statements and the discussion of franchised units on pages 3 and 4).
With 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”.
With 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”.
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.
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 28, 2024 and as compared to September 30, 2023.
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”).
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.
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.
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. 19.4% of the limited partnership interest is owned by persons who are either our officers, directors or their family members.
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 .
As of our fiscal year ended September 28, 2024, 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 have a 25% limited partnership interest in this limited partnership. 31.9% of the remaining limited partnership interest is owned by persons who are either our officers, directors or their family members.
We have a 25% limited partnership interest in this limited partnership. 56.9% of the limited partnership interest is owned by persons who are either our officers, directors or their family members.
As of the end of our fiscal year 2023, this limited partnership has returned to its investors approximately 14.5% of their initial cash invested. Miramar, Florida We are the sole general partner in this limited partnership which has owned and operated a restaurant in Miramar, Florida under our “Flanigan’s” service mark since April 18, 2023.
As of the end of our fiscal year 2024, this limited partnership has returned to its investors approximately 19.0% of their initial cash invested. Miramar, Florida We are the sole general partner in this limited partnership which has owned and operated a restaurant in Miramar, Florida under our “Flanigan’s” service mark since April 18, 2023.
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.
BUSINESS General As of September 28, 2024, Flanigan’s Enterprises, Inc., a Florida corporation, together with its subsidiaries (“we”, “our”, “ours” and “us” as the context requires), (i) operates 32 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 (ii) franchises an additional five units, consisting of two restaurants (one of which we operate) and three combination restaurant/package liquor stores.
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.
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 60 (1) August Bucci Chief Operating Officer and Executive Vice President 80 2002 Jeffrey D.
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.
Kastner Chief Financial Officer, General Counsel and Secretary 71 (2) Christopher O’Neil Vice President of Package Operations 59 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.
No units of limited partnership interest were purchased by the Company. 24.0% of the limited partnership interest is owned by persons who are either our officers, directors or their family members. As of the end of our fiscal year 2023, this limited partnership has returned to its investors approximately 10.0% of their initial cash invested.
No units of limited partnership interest were purchased by the Company. 25.5% of the limited partnership interest is owned by persons who are either our officers, directors or their family members. As of the end of our fiscal year 2024, this limited partnership has returned to its investors approximately 25.0% of their initial cash invested.
Sunrise, Florida We are the sole general partner and a 7% limited partner in this limited partnership which has owned and operated a restaurant in Sunrise, Florida under our “Flanigan’s” service mark since March 20, 2022. 31.3% of the remaining limited partnership interest is owned by persons who are either our officers, directors or their family members.
Sunrise, Florida We are the sole general partner and a 7% limited partner in this limited partnership which has owned and operated a restaurant in Sunrise, Florida under our “Flanigan’s” service mark since March 22, 2022. 32.1% of the limited partnership interest is owned by persons who are either our officers, directors or their family members.
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.
For our fiscal years ended September 28, 2024 and September 30, 2023, we generated $200,000 and $400,000 respectively 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.
(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.
Subsequent Events for a discussion of general liability and excess liability insurance for the period commencing December 30, 2024.) 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.
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.
As of September 28, 2024, all limited partnerships, with the exception of the limited partnership which owns the restaurant in Sunrise, Florida (Store #85), which opened for business in March 2022 and the limited partnership which owns the restaurant in Miramar, Florida (Store #25), 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.
Due to continuing higher interest rates, for the policy year commencing December 30, 2023 we will pay the premiums for property, general liability, excess liability, crime and terrorism policies in full without financing. (See Item 2.
For the policy year commencing December 30, 2024, we will pay the premiums for property, general liability, excess liability and terrorism policies in full again due to continuing higher interest rates. (See Item 2.
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.
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 2024, we employed 1,990 persons, of which 669 were full-time and 1,321 were part-time.
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.
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 except for the restaurant located in Fort Lauderdale, Florida where we only hold a limited partnership interest.
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.
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 79.28% and bar sales approximately 20.72% of our total restaurant sales.
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.
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.
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”.
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”.
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.
In order to fix the cost and ensure adequate supply of baby back ribs for our restaurants for calendar year 2025, we entered into a purchase agreement with a new rib supplier, whereby we agreed to purchase approximately $7.8 million of “2.5 & Down Baby Back Ribs” (weight range in which baby back ribs are sold) during calendar year 2025, at a prescribed cost, which we believe is competitive.
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.
Property Insurance; Windstorm Insurance For the policy year beginning December 30, 2023, 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 windstorms, such as a hurricane.
Competition and the Company's Market The liquor and hospitality industries are highly competitive and are often affected by changes in taste and entertainment trends among the public, by local, national and economic conditions affecting spending habits, and by population and traffic patterns.
Subsequent Events for a discussion of property, general liability, excess liability, and terrorism insurance policies for the period commencing December 30, 2024.) Competition and the Company's Market The liquor and hospitality industries are highly competitive and are often affected by changes in taste and entertainment trends among the public, by local, national and economic conditions affecting spending habits, and by population and traffic patterns.
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.
Entity State Of Organization Percentage Owned Flanigan’s Management Services, Inc.
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.
University Drive, Hollywood, Florida (Store #19), was damaged by a fire which caused it to be closed since the first quarter of our fiscal year 2019. During the first quarter of our fiscal year 2023, we opened our newly built stand-alone package liquor store on this site (2505 N.
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, which includes coverage for our franchisees (which is $658,000), which are not included in our consolidated financial statements.
Subsequent Events for a discussion of property insurance for the period commencing December 30, 2024.) Insurance Premiums Due to continuing higher interest rates, for the policy year commencing December 30, 2023 we paid the premiums for property, general liability, excess liability and terrorism policies in full with premiums totaling approximately $3.92 million which includes coverage for our franchises (of approximately $850,000), which are not included in our consolidated financial statements.
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.
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, including windstorm coverage, to be effective as of December 30, 2024. (See Item 2.
TYPES OF UNITS FISCAL YEAR 2023 FISCAL YEAR 2022 Company Owned: Combination package liquor store and restaurant 3 3 Restaurant only, including sports bar 8 8 (1) Package liquor store only 8 7 (2) (3) Company Managed Restaurants Only : Limited partnerships 10 10 (4) Franchise 1 1 Unrelated Third Party 1 1 Total Company Owned/Operated Units 31 30 Franchised Units 5 5 (5) ____________________ Notes: (1) During the third quarter of our fiscal year 2022, we entered into a new lease for the business premises and purchased the assets of a restaurant/bar known as “Brendan’s Sports Pub” located at 868 S.
September 28, 2024 September 30, 2023 TYPES OF UNITS Company Owned: Combination package liquor store and restaurant 2 3 (1) Restaurant only, including sports bar 9 8 (1) Package liquor store only 9 8 (1) Company Managed Restaurants Only : Limited partnerships 10 10 Franchise 1 1 Unrelated Third Party 1 1 Total Company Owned/Operated Units 32 31 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.
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.
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 .
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.
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.
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.
Our insurance carrier is responsible for $1,000,000 coverage per occurrence above our self-insured retentions, up to a maximum aggregate of $2,000,000 per year. We were also able to purchase excess liability insurance whereby our excess insurance carrier is responsible for $10,000,000 coverage above our primary general liability insurance coverage.
Effective October 3, 2021 and then effective December 19, 2021 we increased menu prices for our food offerings to target an increase to our food revenues of approximately 2.38% and 3.34% annually, respectively, to offset higher food costs and higher overall expenses and effective December 12, 2021 we increased menu prices for our bar offerings to target an increase to our bar revenues of approximately 7.80% annually.
Effective August 25, 2024 we increased menu prices for our bar offerings to target an increase to our bar revenues of approximately 5.63% annually to offset higher food and liquor costs and higher overall expenses.
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 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.
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.
We believe that we have a competitive position in our market because of widespread consumer recognition of the “Flanigan’s Seafood Bar and Grill" and “Flanigan’s” names. 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.
Risk Factors and the discussion of cybersecurity risks on page 12.) Government Regulation Our operations are subject to various federal, state and local laws affecting our business.
We also transact business through online ordering for both our restaurants and package liquor stores through third party vendors. (See Item 1A. Risk Factors and the discussion of cybersecurity risks and Item 1C information on cybersecurity risk management.) Government Regulation Our operations are subject to various federal, state and local laws affecting our business.
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.
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. Accordingly, our annual insurance costs may be subject to adjustment from previous estimates as facts and circumstances change.
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.
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.
The increase in our cost of baby back ribs for calendar year 2024 compared to calendar year 2023 is due to our purchase of ribs for Store #25, Miramar, Florida being open for the entire calendar year and Store #19, Hollywood, Florida anticipated to be open for a part of the calendar year, offset by a decrease in market price. 6 While we anticipate purchasing all of our rib supply from this vendor, we believe there are several other alternative vendors available, if needed.
The increase in our cost of baby back ribs for calendar year 2025 compared to calendar year 2024 is due to our purchase of larger sized baby back ribs and the purchase of baby back ribs for Store #19R, Hollywood, Florida for the entire calendar year, offset by a decrease in market price.
We have acquired registered Federal trademarks on the principal register for our “Big Daddy’s Liquors”, "Flanigan's" and “Flanigan’s Seafood Bar and Grill” service marks. 11 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 federal court retained jurisdiction to enforce the consent decree. We have acquired registered Federal trademarks on the principal register for our “Big Daddy’s Liquors”, "Flanigan's" and “Flanigan’s Seafood Bar and Grill” service marks.
We are constructing a stand-alone restaurant building on this site (adjacent to the package liquor store), replacing our restaurant destroyed by fire and previously operating here (Store #19R). This restaurant was not operational during our fiscal year 2023, but we believe this restaurant will be operational during our fiscal year 2024.
University Drive, Building A, Hollywood, Florida) (Store #19P), replacing our package liquor store destroyed by fire and previously operating here. Store #19P is now reflected in the above chart as a stand-alone liquor store, rather than as a combination unit. Store #19R, a stand-alone restaurant building on this site, (2505 N.
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.
During our fiscal years ended September 28, 2024 and September 30, 2023, the Board of Directors approved discretionary matching contributions totaling $74,000 and $70,000, respectively. 9 General Liability Insurance For the policy year beginning December 30, 2023, we have general liability insurance which incorporates a $50,000 self-insured retention per occurrence for us and a $10,000 self-insured retention per occurrence for the limited partnerships.
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Federal Highway, Pompano Beach, Florida and began operating the location under its current trade name. (2) During the first quarter of our fiscal year 2019, our combination package liquor store and restaurant located at 2505 N.
Added
University Drive, Building B, Hollywood, Florida) opened on March 26, 2024 (adjacent to the package liquor store), and replaced our restaurant destroyed by fire and previously operating here. Store #19R is now reflected in the above chart as a stand-alone restaurant, rather than as a combination unit. (2) We operate a restaurant for one (1) franchisee.
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During the first quarter of our fiscal year 2023, we opened our newly built stand-alone package liquor store on this site replacing our package liquor store destroyed by fire and previously operating here (Store #19P).
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As of our fiscal year ended September 28, 2024, we own and operate eleven restaurants all under our service mark “Flanigan’s Seafood Bar and Grill” two of which are jointly operated with package liquor stores we own. Franchised Restaurants .
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(3) During the second quarter of our fiscal year 2023, our package liquor store located at 11225 Miramar Parkway #245, Miramar, Florida (Store #24) opened for business. (4) During the second quarter of our fiscal year 2022, our limited partnership owned restaurant located at 14301 West Sunrise Boulevard, Sunrise, Florida (Store #85) opened for business (the “2022 Sunrise Restaurant”).
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For calendar year 2024, we entered into a purchase agreement with our current rib supplier, whereby we agreed to purchase approximately $7.0 million of “2.25 & Down Baby Back Ribs” during calendar year 2024, at a prescribed cost, which we also believe is competitive.
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During the third quarter of our fiscal year 2023, our limited partnership owned restaurant located at 11225 Miramar Parkway #250, Miramar, Florida (Store #25) opened for business (the “2023 Miramar Restaurant”). (5) We operate a restaurant for one (1) franchisee.
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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. Restaurant and package liquor store hardware and software support is provided by both our internal support services team as well as third-party vendors.
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We are constructing a stand-alone restaurant to be located in Hollywood, Florida to replace our restaurant destroyed by fire. We believe this restaurant will be operational during our fiscal year 2024. Franchised Restaurants .
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We are uninsured against liability claims in excess of $11,000,000 per occurrence and in the aggregate. We secured general liability insurance and excess liability insurance to be effective as of December 30, 2024. (See Item 2.
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We also maintain cyber risk insurance coverage to further reduce our risk profile. Security of our financial data and other sensitive information remains a high priority for us, led by our information technology department.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeHigh Unemployment, Instability in the Housing Market, High Energy and Food Costs and General Economic Uncertainty Could Result in a Decline in Consumer Discretionary Spending That Would Materially Affect our Financial Performance. COVID-19 has had a significant impact on domestic economies and will likely continue to negatively impact these economies for some time. Dining out is a discretionary expense.
Biggest changeA number of these factors are beyond our control and therefore we cannot assure that we will be able to sustain comparable restaurant sales increases. 12 High unemployment, instability in the housing market, high energy and food costs and general economic uncertainty could result in a decline in consumer discretionary spending that would materially affect our financial performance.
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.
However, we are currently unable to contract for extended periods of time for certain 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.
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.
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. 14 Labor shortages, an increase in labor costs, or inability to attract employees could harm our business.
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.
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. The Federal Americans with Disabilities Act (the “ADA”) prohibits discrimination on the basis of disability in public accommodations and employment.
ITEM 1B UNRESOLVED STAFF COMMENTS As a Smaller Reporting Company as defined by Rule 12b-2 of the Exchange Act and in Item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by this Item 1B. 22
ITEM 1B UNRESOLVED STAFF COMMENTS As a Smaller Reporting Company as defined by Rule 12b-2 of the Exchange Act and in Item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by this Item 1B.
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.
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.
These regulations include matters relating to the following: ● the preparation and sale of food and alcoholic beverages; ● employment; ● building construction and access; ● zoning requirements; and ● the environment. Our facilities are licensed and subject to regulation under state and local fire, health and safety codes.
These regulations include matters relating to the following: ● the preparation and sale of food and alcoholic beverages; ● employment; 15 ● building construction and access; ● zoning requirements; and ● the environment. Our facilities are licensed and subject to regulation under state and local fire, health and safety codes.
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.
However, we have not experienced any adverse effects from past menu price increases. 13 Increases in Food Costs, Raw Materials and Other Supplies and Services Due to Inflation May Have a Material Adverse Impact on our Financial Performance.
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.
In addition, remediation of any problems with our systems could result in significant, unplanned expenses. The effect of 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.
These systems and our business needs will continue to evolve and require upgrading and maintenance over time, consequently requiring significant future commitments of resources and capital.
These systems and our business needs will continue to evolve and require upgrades and maintenance over time, consequently requiring significant future commitments of resources and capital.
These problems, other food-borne illnesses (such as, hepatitis A, trichinosis or salmonella) and injuries caused by food tampering have in the past, and could in the future, adversely affect the price and availability of affected ingredients and cause changes in consumer preference. As a result, our sales could decline.
These problems, other food-borne illnesses (such as, hepatitis A, trichinosis or salmonella) and injuries caused by food tampering have in the past, and could in the future, adversely affect the price and availability of affected ingredients and cause changes in consumer preference.
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.
The State of Florida has already enacted a minimum wage and tip credit, with the minimum wage currently at $13.00 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 2026. The tip credit does not increase.
Instances of food-borne illnesses, real or perceived, whether at our restaurants or those of our competitors, could also result in negative publicity about us or the restaurant industry, which could adversely affect sales.
As a result, our sales could decline. 16 Instances of food-borne illnesses, real or perceived, whether at our restaurants or those of our competitors, could also result in negative publicity about us or the restaurant industry, which could adversely affect sales.
In addition to COVID-19, factors that affect consumer behavior and spending for restaurant dining, such as changes in general economic conditions (including national, regional and local economic conditions), discretionary spending patterns, employment levels, instability in the housing market, and high energy and food costs may have a material adverse effect on us.
Dining out is a discretionary expense. Factors that affect consumer behavior and spending for restaurant dining, such as changes in general economic conditions (including national, regional and local economic conditions), discretionary spending patterns, employment levels, instability in the housing market, and high energy and food costs may have a material adverse effect on us.
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.
The COVID-19 pandemic had a significant adverse impact on our customer traffic and ability to operate our restaurants and future pandemics and other diseases may have a similar or more severe impact.
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.
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.
Changes in U.S. healthcare laws could also adversely impact us if they result in significant new welfare and benefit costs or increased compliance expenses. We also are subject to being audited from time to time for compliance with citizenship or work authorization requirements. From time to time, the State of Florida considers adopting new state immigration laws and the U.S.
Changes in U.S. healthcare laws could also adversely impact us if they result in significant new welfare and benefit costs or increased compliance expenses. 17 We also are subject to being audited from time to time for compliance with citizenship or work authorization requirements.
The adverse impact of publicity on customers’ perception of us could have a further negative impact on our sales. If the impact of any such publicity is particularly long-lasting, the value of our brand may suffer and our ability to grow could be diminished.
The adverse impact of publicity on customers’ perception of us could have a further negative impact on our sales. If the impact of any such publicity is particularly long-lasting, the value of our brand may suffer and our ability to grow could be diminished. Our digital business has become an increasingly significant part of our business.
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.
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.
If our information security systems or data are compromised in a material way, our ability to conduct our business may be impaired, we may incur financial losses and we may incur costs to remediate possible harm and/or to pay fines or take other action which could have a material adverse impact on our business.
If our information security systems or data are compromised in a material way, our ability to conduct our business may be impaired, we may incur financial losses and we may incur costs to remediate possible harm and/or to pay fines or take other action which could have a material adverse impact on our business. 19 If there is a material failure in our information technology systems, our business operations and profits could be negatively affected and our systems may be inadequate to support our future growth strategies.
Increases in minimum wages and minimum tip credit wages, extensions of personal and other leave policies, other governmental regulations affecting labor costs and a diminishing pool of potential staff members when the unemployment rate falls and legal immigration is restricted, especially in certain localities, could significantly increase our labor costs and make it more difficult to fully staff our restaurants, any of which could materially adversely affect our financial performance.
Increases in minimum wages and minimum tip credit wages, extensions of personal and other leave policies, other governmental regulations affecting labor costs and a diminishing pool of potential staff members when the unemployment rate falls and legal immigration is restricted, especially in certain localities, could significantly increase our labor costs and make it more difficult to fully staff our restaurants, any of which could materially adversely affect our financial performance. 11 We believe the United States federal government may significantly increase the federal minimum wage and tip credit wage (or eliminate the tip credit wage) and require significantly more mandated benefits than what is currently required under federal law.
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.
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.
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.
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.
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.
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.
Congress and Department of Homeland Security from time to time consider or implement changes to Federal immigration laws, regulations or enforcement programs as well. Changes in immigration or work authorization laws may increase our obligations for compliance and oversight, which could subject us to additional costs and make our hiring process more cumbersome or reduce the availability of potential employees.
Changes in immigration or work authorization laws may increase our obligations for compliance and oversight, which could subject us to additional costs and make our hiring process more cumbersome or reduce the availability of potential employees.
The 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 the debt instrument, we entered into an interest rate swap agreement with our unrelated third party lender to convert this variable rate debt obligation to fixed rate.
As a means of managing our interest rate risk on the debt instrument, we entered into an interest rate swap agreement with our unrelated third party lender to convert this variable rate debt obligation to fixed rate.
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.
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.
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.
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 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.
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.
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.
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. 20 Changes in interest rates.
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.
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.
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.
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.
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.
We may experience material difficulties or failures in obtaining the necessary licenses or approvals for new restaurants, which could delay planned restaurant openings. 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.
As a result, it is possible that we will not achieve our targeted comparable restaurant sales or that the change in comparable restaurant sales could be negative. A number of these factors are beyond our control and therefore we cannot assure that we will be able to sustain comparable restaurant sales increases.
As a result, it is possible that we will not achieve our targeted comparable restaurant sales or that the change in comparable restaurant sales could be negative.
Our reputation as a brand or as an employer could also be adversely affected from these types of security breaches or regulatory violations, which could impair our sales or ability to attract and keep qualified employees.
Our reputation as a brand or as an employer could also be adversely affected from these types of security breaches or regulatory violations, which could impair our sales or ability to attract and keep qualified employees. 18 Local licensure, zoning and other regulation Each of our restaurants is also subject to state and local licensing and regulation by health, alcoholic beverage, sanitation, food and workplace safety and other agencies.
Privacy/Cybersecurity We are required to collect and maintain personal information about our employees and we collect information about customers as part of some of our marketing programs as well. The collection and use of such information is regulated at the federal and state levels and the regulatory environment related to information security and privacy is increasingly demanding.
The collection and use of such information is regulated at the federal and state levels and the regulatory environment related to information security and privacy is increasingly demanding.
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.
For various reasons, many of our eligible employees currently choose not to participate in our healthcare plans. The costs and other effects of any new healthcare requirements cannot be determined with certainty, but they may have a material adverse effect on our financial and operating results.
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.
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.
For example, the State of California, New York City and a number of other jurisdictions around the U.S. have adopted regulations requiring that chain restaurants include calorie information on their menus and/or make other nutritional information available and nation-wide nutrition disclosure requirements included in the U.S. health care reform law went into effect as of December 1, 2015.
Numerous jurisdictions around the U.S. have adopted regulations requiring that chain restaurants include calorie information on their menus and/or make other nutritional information available and U.S. health care reform law included nation-wide nutrition disclosure requirements. These nutrition disclosure requirements may increase our expenses or slow customers as they select their food and beverage choices decreasing our throughput.
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.
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. Many of our corporate systems and processes and corporate support for our restaurant and package liquor store operations are centralized at one location.
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.
During our fiscal year 2024, we opened our restaurant in Hollywood, Florida (Store #19R) which replaced our restaurant destroyed by fire that previously operated at that site.
While we are uncertain as to whether this business will continue to increase and/or be significant, we have implemented technology, targeted advertising and promotions and to some extent remodeled our restaurants, to accommodate the growth of our digital business.
Our revenue derived from digital orders, which includes delivery and customer pickup has increased substantially. We have implemented technology, targeted advertising and promotions and to some extent remodeled our restaurants, to accommodate the growth of our digital business.
These nutrition disclosure requirements may increase our expenses or slow customers as they select their food and beverage choices decreasing our throughput. These initiatives may also change customers’ buying habits in a way that adversely impacts our sales.
These initiatives may also change customers’ buying habits in a way that adversely impacts our sales. Privacy/Cybersecurity We are required to collect and maintain personal information about our employees and we collect information about customers as part of some of our marketing programs as well.
Removed
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.
Added
Similar to the broader economy, we are experiencing labor shortfalls relative to our sales levels in certain parts of our workforce.
Removed
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, particularly if further government directives are put in place for a significant amount of time.
Added
There is no assurance that comparable restaurant sales will increase in fiscal year 2024 due to, among other things, ongoing consumer and economic uncertainty.
Removed
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.
Added
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.
Removed
We have experienced significant issues relating to suppliers and labor impacted by the COVID-19 pandemic.
Added
From time to time, the State of Florida considers adopting new state immigration laws and the U.S. Congress and Department of Homeland Security from time to time consider or implement changes to Federal immigration laws, regulations or enforcement programs as well.
Removed
If our suppliers’ employees are unable to work, whether because of illness, quarantine, limitations on travel or other government restrictions in connection with COVID-19, or if the supply chain is disrupted for any other reason such as travel limitations and other restrictions on commerce, we could face shortages of food items or other supplies at our restaurants and our operations and sales could be adversely impacted by such supply interruptions.
Added
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.
Removed
The impact of COVID-19, and the volatile regional and global economic conditions stemming from the pandemic, may also precipitate or exacerbate other risks discussed in this Item 1A - Risk Factors and elsewhere in this report, any of which could have a material effect on us.
Added
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.
Removed
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.
Added
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.
Removed
We believe the United States federal government may significantly increase the federal minimum wage and tip credit wage (or eliminate the tip credit wage) and require significantly more mandated benefits than what is currently required under federal law.
Added
As of September 28, 2024, we had one variable rate instrument outstanding that is impacted by changes in interest rates. The variable rate debt instrument is equal to the lender’s BSBY Screen Rate plus one and one-half percent (1.50%) per annum.
Removed
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.
Added
The Bloomberg Index Services Limited announced the permanent cessation of all tenors of BSBY, effective immediately following the last publication of BSBY on November 15, 2024. As of that date, our lender has determined that a commercially reasonable and good faith alternative to BSBY is the 1 Month CME Term Secured Overnight Financing Rate (“SOFR”), plus 10 Basis Points.
Removed
We secured windstorm insurance coverage for the period commencing December 30, 2023 at a higher premium. (See Item 2.
Added
ITEM 1C CYBERSECURITY Cybersecurity Risk Management and Strategy We are committed to safeguarding our information and information systems from unauthorized access, use, disclosure, disruption, modification or destruction. Our program to protect our information assets and the management of risks to those assets supports the confidentiality, integrity, and availability of the information necessary to our long-term business success.
Removed
Many of our corporate systems and processes and corporate support for our restaurant and package liquor store operations are centralized at one location.
Added
Our cybersecurity risk management program includes: ● the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security controls, including, third-party network security reviews, scans, and audits, on at least an annual basis; ● regular cybersecurity awareness training for employees with access to our information systems, incident response personnel, and senior management; ● a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; ● a disaster recovery plan and controls designed to protect against business interruption, including by backing up our critical systems; ● use of end-to-end encryption and tokenization technology, a public key infrastructure, designed to ensure that only trusted devices can access our enterprise information technology network, and Intrusion Prevention System (IPS) that scans data in transit to help prevent the execution of harmful code; and ● a third-party risk management process for service providers, suppliers, and vendors who have access to our information systems.
Removed
For various reasons, many of our eligible employees currently choose not to participate in our healthcare plans. However, under the comprehensive U.S. health care reform law enacted in 2010, the Affordable Care Act, certain provisions, including, the employer mandate, may increase our labor costs significantly.
Added
There can be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, will be fully implemented, complied with or are effective in protecting our systems and information.
Removed
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
We are not currently aware of risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition.
Removed
Local Licensure, Zoning and Other Regulation Each of our restaurants is also subject to state and local licensing and regulation by health, alcoholic beverage, sanitation, food and workplace safety and other agencies. We may experience material difficulties or failures in obtaining the necessary licenses or approvals for new restaurants, which could delay planned restaurant openings.
Added
Cybersecurity Governance Our Board of Directors has oversight responsibility for the Company’s cybersecurity risk management, including technology and cybersecurity risks facing the Company. Management updates the Board, as necessary, regarding cybersecurity risk management matters, including reporting any material cybersecurity incidents.
Removed
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
Our management team, including the CEO, CFO, COO, Director of Information Technology, and Director of Accounting, as appropriate, supervises efforts to prevent, detect, mitigate and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in the information technology environment. 21
Removed
If There is a Material Failure in our Information Technology Systems, Our Business Operations and Profits Could Be Negatively Affected and our Systems may be Inadequate to Support our Future Growth Strategies.
Removed
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.
Removed
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.

Item 2. Properties

Properties — owned and leased real estate

40 edited+1 added−22 removed12 unchanged
Biggest changeWe 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.
Biggest changeThe package liquor store re-opened for business during the first quarter of our fiscal year 2023 in a newly constructed stand-alone building. The restaurant re-opened for business during the second quarter of our fiscal year 2024 in a newly constructed stand-alone building where our combination package liquor store and restaurant was previously located.
(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.
(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 12/31/29 Options to 12/31/49 Flanigan's Legends Seafood Bar and Grill #11 11 Corporation, Inc.
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.
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 25 Name and Location Approx. Square Footage Seats Franchised/ Owned by Lease Terms Flanigan’s #25 CIC Investors #25, Ltd.
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 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 12/14/29 Options to 12/14/39 Flanigan's Seafood Bar and Grill #85 CIC Investors #85 Ltd. 14301 W. Sunrise Blvd.
The rental income generated by these four lease arrangements is not material. The real property is located adjacent to our real property located at 4 N. Federal Highway, Hallandale Beach, Florida, where our combination package store and restaurant (Store #31) operates. We paid all cash at closing and accounted for this transaction as an asset acquisition.
The rental income generated by these three lease arrangements is not material. The real property is located adjacent to our real property located at 4 N. Federal Highway, Hallandale Beach, Florida, where our combination package store and restaurant (Store #31) operates. We paid all cash at closing and accounted for this transaction as an asset acquisition.
Subsequent Events Purchase of Leasehold/Sub-leasehold Interests In 1974, we sold the underlying ground lease to the real property located at 8600 Biscayne Boulevard, El Portal, Florida to related and unrelated third parties and simultaneously subleased it back. We operate our retail package liquor store (Store #47) and warehouse from this location.
Purchase of Leasehold/Sub-leasehold Interests In 1974, we sold the underlying ground lease to the real property located at 8600 Biscayne Boulevard, El Portal, Florida to related and unrelated third parties and simultaneously subleased it back. We operate our retail package liquor store (Store #47) and warehouse from this location.
(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.
(11) 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.
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.
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 package liquor store #45 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.
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.
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. (10) During the fourth quarter of our fiscal year 2019, we entered into a lease for this location.
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.
Lauderdale, Florida 4,100 200 Company Company-Owned Big Daddy’s Wine & Liquors #24 Flanigan’s Enterprises, Inc. (10) 11225 Miramar Parkway, #245 Miramar, Florida 2,000 N/A Company 3/5/22 to 3/5/32 Options to 3/5/47 24 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.
University Drive Davie, Florida 5,900 200 Limited Partnership 1/5/07 to 12/31/26 Option to 12/31/31 Flanigan’s Seafood Bar and Grill #60 CIC Investors #60 Ltd. 9516 Harding Avenue Surfside, Florida 6,800 200 Limited Partnership 8/1/97 to 12/31/26 Flanigan’s Seafood Bar and Grill #65 CIC Investors #65, Ltd. 2335 State Road 7, Suite 100 Wellington, Florida 6,128 200 Limited Partnership 5/01/05 to 6/30/25 Flanigan’s Seafood Bar and Grill #70 CIC Investors #70 Ltd. 12790 SW 88 St.
University Drive Davie, Florida 5,900 200 Limited Partnership 1/5/07 to 12/31/26 Option to 12/31/31 Flanigan’s Seafood Bar and Grill #60 CIC Investors #60 Ltd. 9516 Harding Avenue Surfside, Florida 6,800 200 Limited Partnership 8/1/97 to 12/31/26 Flanigan’s Seafood Bar and Grill #65 CIC Investors #65, Ltd. 2335 State Road 7, Suite 100 Wellington, Florida 6,128 200 Limited Partnership 5/01/05 to 6/30/35 Option to 6/30/40 Flanigan’s Seafood Bar and Grill #70 CIC Investors #70 Ltd. 12790 SW 88 St.
(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.
(9) 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 Option to 10/23/31 Flanigan’s Seafood Bar and Grill #55 CIC Investors #55, Ltd. 2190 S.
(6) During the first quarter of our fiscal year 2012, our wholly owned subsidiary, Flanigan’s Calusa Center, LLC, closed on the purchase of a two building shopping center in Miami, Florida, which consists of (i) one stand-alone building which is leased to ten unaffiliated third parties and houses our recently opened (October 2019) package liquor store (approximately 3,250 square feet) and (ii) a second stand-alone building where our limited partnership owned restaurant located at 12790 SW 88 th Street, Miami, Florida, (Store #70), operates.
(6) During the first quarter of our fiscal year 2012, our wholly owned subsidiary, Flanigan’s Calusa Center, LLC, closed on the purchase of a two building shopping center in Miami, Florida, which consists of (i) one stand-alone building which is leased to ten unaffiliated third parties and houses our package liquor store #45 (approximately 3,250 square feet) and (ii) a second stand-alone building where our limited partnership owned restaurant located at 12790 SW 88 th Street, Miami, Florida, (Store #70), operates.
In 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).
In 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; 22 (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 (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, of which 950 square feet is leased to one unaffiliated third party retailer and 500 square feet which is occupied by us; (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).
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.
Subsequent to the fire, (i) we 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) we constructed a 4,500 square foot stand-alone building here for the operation of the Company-owned restaurant, (Store #19R), which opened for business during the second quarter of 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.
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.
Sunrise, Florida 6,900 200 Limited Partnership 3/1/19 to 2/28/29 Options to 2/28/44 Company-Owned 26 Name and Location Approx.
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.
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 6/30/29 Option to 6/30/34 Big Daddy's Liquors #47 Flanigan's Enterprises, Inc. (3) 8600 Biscayne Blvd.
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.
All of our units require periodic refurbishing in order to remain competitive. We have budgeted $550,000 for our refurbishing program for fiscal year 2025, although capital expenditures of our refurbishing program for our fiscal year 2025 may be significantly higher. See Item 7, "Liquidity and Capital Resources" for discussion of the amounts spent in fiscal year 2024.
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.
Purchase of Real Property; Leasehold / Sub-leasehold Interests 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.
Hollywood, Florida 4,500 160 Company Company-Owned Flanigan's Seafood Bar and Grill #20 Flanigan's Enterprises, Inc. 13205 Biscayne Blvd. North Miami, Florida 5,100 150 Company Company-Owned Big Daddy’s Liquors #20 Flanigan's Enterprises, Inc. 13185 Biscayne Blvd. North Miami, Florida 2,500 N/A Company Company-Owned Flanigan's Seafood Bar and Grill #22 Flanigan's Enterprises, Inc. 2600 W. Davie Blvd. Ft.
University Dr., Building B Hollywood, Florida 4,500 160 Company Company-Owned Flanigan's Seafood Bar and Grill #20 Flanigan's Enterprises, Inc. 13205 Biscayne Blvd. North Miami, Florida 5,100 150 Company Company-Owned Big Daddy’s Liquors #20 Flanigan's Enterprises, Inc. 13185 Biscayne Blvd. North Miami, Florida 2,500 N/A Company Company-Owned Flanigan's Seafood Bar and Grill #22 Flanigan's Enterprises, Inc. 2600 W. Davie Blvd. Ft.
(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) (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. 2505 N. University Dr., Building A Hollywood, Florida 3,000 N/A Company Company-Owned Flanigan’s Seafood Bar and Grill #19 (8) Flanigan’s Enterprises, Inc. 2505 N.
Hallandale Beach, Florida During the third quarter of our fiscal year 2023, we closed with a non-affiliated third party on the purchase of a three building shopping center in Hallandale Beach, Florida, which consists of one stand-alone building which is leased to two unaffiliated third parties (approximately 1,450 square feet); a second stand-alone building which is leased to one unaffiliated third party (approximately 1,500 square feet); and a third stand-alone building which is leased to one unaffiliated third party (approximately 2,500 square feet) for $8,500,000.
Hallandale Beach, Florida During the third quarter of our fiscal year 2023, we closed with a non-affiliated third party on the purchase of a three building shopping center in Hallandale Beach, Florida, which consists of one stand-alone building a portion of which is leased to one unaffiliated third party (approximately 950 square feet) and a portion of which is occupied by us (approximately 500 square feet); a second stand-alone building which is leased to one unaffiliated third party (approximately 1,500 square feet); and a third stand-alone building which is leased to one unaffiliated third party (approximately 2,500 square feet) for $8,500,000.
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.
The one (1) year property insurance premium is in the amount of $1,317,000; (v) For the policy year beginning December 30, 2024, our excess liability 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.
The one (1) year automobile insurance premium is in the amount of $234,000; (iv) For the policy year beginning December 30, 2024, our property insurance is a one (1) year policy.
Subsequent to the end of our fiscal year 2023, we re-purchased a 4% interest in the underlying ground lease, as well as the sublease agreement from an unrelated third party for $31,000 and currently own 56% of each lease. As a result, we now only pay 44% of the rent due under the sublease agreement.
During the first quarter of our fiscal year 2024, we re-purchased a 4% interest in the underlying ground lease, as well as the sublease agreement from an unrelated third party for $31,000 and currently own 56% of each lease. As a result, we now only pay 44% of the rent due under the ground lease and the sublease agreement.
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.
Of the $4,014,000 annual premium amounts, which includes coverage for our franchises and our managed restaurant 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.
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.
Subsequent to the end of our fiscal year 2024, for the policy year commencing December 30, 2024, we bound coverage on the following property, general liability, auto, excess liability, and terrorism policies with premiums totaling approximately $4,014,000 of which property, general liability, excess liability and terrorism insurance includes coverage for our franchises and our managed restaurant (of approximately $867,000), which are not included in our consolidated financial statements: (i) For the policy year beginning December 30, 2024, our general liability insurance, excluding limited partnerships, is a one (1) year policy with our insurance carriers.
Subsequent events have been evaluated through the date these consolidated financial statements were issued and except as disclosed herein, no other events required disclosure.
Subsequent events have been evaluated through the date these consolidated financial statements were issued and except as provided above, no events required disclosure. 29
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.
Re-construction Following 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 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 $479,000; (ii) For the policy year beginning December 30, 2024, the general liability insurance for our limited partnerships, including franchisees and the managed restaurant is a one (1) year policy with our insurance carriers.
(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.
This new location opened for business as a “Big Daddy’s Wine & Liquors” retail package liquor store in March 2023. 27 (11) 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.
(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.
As a result, we pay 44% of the rent due under the ground lease and 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.
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.
The one (1) year excess liability insurance premium is in the amount of $866,000; and (vi) For the policy year beginning December 30, 2024, our terrorism insurance is a one (1) year policy. The one (1) year terrorism insurance premium is in the amount of $19,000.
Square Footage Seats Franchised/ Owned by Lease Terms Flanigan’s Seafood Bar and Grill #18 Twenty Seven Birds Corp. (1) (2) 2721 Bird Avenue Miami, Florida 4,500 200 Franchise 2/15/72 to 12/31/25 Options to 12/31/35 Big Daddy's Liquors #18 Twenty Seven Birds Corp.
Lauderdale, Florida 4,000 90 Franchise/ Limited Partnership 1/1/09 to 8/31/26 Options to 8/31/36 Flanigan’s Seafood Bar and Grill #18 Twenty Seven Birds Corp. (1) (2) 2721 Bird Avenue Miami, Florida 4,500 200 Franchise 2/15/72 to 12/31/25 Options to 12/31/35 Big Daddy's Liquors #18 Twenty Seven Birds Corp.
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.
For the policy commencing December 30, 2024, the self-insured retention per occurrence is $10,000. The one (1) year general liability insurance premium is in the amount of $1,099,000; 28 (iii) For the policy year beginning December 30, 2024, our automobile insurance is a one (1) year policy.
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.
As a result, the package liquor store was closed since our first quarter year 2019, but re-opened for business in the first quarter of fiscal 2023 in a newly constructed stand-alone building #19P.
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.
Deerfield Beach, Florida 3,320 90 Franchise 6/1/79 to 6/1/29 Options to 6/1/34 23 Name and Location Approx. Square Footage Seats Franchised/ Owned by Lease Terms Flanigan’s Seafood Bar and Grill #15 CIC Investors #15 Ltd. (1) (7) 1479 E. Commercial Blvd. Ft.
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.
During the second quarter of our fiscal year 2024, we re-opened our restaurant in a stand-alone building on the same site in Hollywood, Florida adjacent to Store #19P. (9) 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.
For the policy commencing December 30, 2023, the $10,000 self-insured retention per occurrence increases to $50,000 for us but remains the same at $10,000 for the limited partnerships.
For the policy commencing December 30, 2024, the self-insured retention per occurrence is $50,000.
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.
We have re-purchased from the unaffiliated third parties and currently own 56% of the underlying ground lease, as well as the sublease agreement. In April, 2023 we purchased the real property, subject to the ground lease and sublease agreement through which we continue to occupy the premises.
Removed
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.
Added
Subsequent Events Subsequent to the end of our fiscal year 2024, we entered into a new Master Services Agreement with our current vendor for a period of one (1) year effective January 1, 2025, with Company options of four (4) one (1) year renewal options to extend the term of the same.
Removed
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
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.
Removed
This new location opened for business as a “Big Daddy’s Wine & Liquors” retail package liquor store in March 2023.
Removed
(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
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
Capital raised from private investors is credited to sale of noncontrolling interests in our Statements of Stockholders’ Equity.
Removed
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
(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
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
Capital raised from private investors is credited to sale of noncontrolling interests in our Statements of Stockholders’ Equity.
Removed
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
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
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
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
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).
Removed
Re-Financing of Existing Mortgages Re-Finance of Mortgage on Real Property – Fort Lauderdale, Florida During our fiscal year 2022, we requested and received a loan advance of $697,000 from an entity managed by a member of our Board of Directors who is also our Chief Financial Officer, which entity currently holds a first priority mortgage note on our real property and improvements where our restaurant located at 2600 West Davie Boulevard, Fort Lauderdale, Florida operates (the “West Davie Mortgage Note”).
Removed
Including the $697,000 advance, the principal amount outstanding amount owed under the West Davie Mortgage Note as of September 30, 2023 is $1,049,000.
Removed
The West Davie Mortgage Note accrues interest at 6% annually, (increased from 5% annually), is amortizable over 15 years with monthly installments of principal and interest of approximately $9,300 required to be made and a final balloon payment of approximately $487,000 required to be made August 1, 2032. 30 Re-Finance of Mortgage on Real Property – Hallandale Beach, Florida During our fiscal year 2022, we re-financed our mortgage debt with our non-affiliated third-party lender secured by our real property located at 4 N.
Removed
Federal Highway, Hallandale, Florida where our combination package liquor store and restaurant (Store #31) operates and borrowed an additional $8,012,000 increasing the principal balance owed by us to $8,900,000, (the “$8.90M Mortgage”). The $8.90M Mortgage bears interest at a variable rate equal to the BSBY Screen Rate – 1 Month plus 1.50%.
Removed
We entered into an interest rate swap agreement to hedge the interest rate risk, which fixed the interest rate on the $8.90M Mortgage at 4.90% per annum throughout its term. The $8.90M Mortgage is fully amortized over fifteen (15) years, with our monthly payment of principal and interest totaling $33,000.
Removed
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.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+0 added−0 removed2 unchanged
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.
Biggest changeDividend Policy During our fiscal year 2024, our Board of Directors declared a cash dividend of $0.50 per share to shareholders of record on June 14, 2024 and was made payable on June 28, 2024.
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.
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.
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.
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 2024. As of September 28, 2024, 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 18, 2023, there were approximately 158 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 24 , 2024, there were approximately 155 holders of record of our common stock.

Item 7. Management's Discussion & Analysis

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

71 edited+18 added−40 removed12 unchanged
Biggest changeDuring 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.
Biggest changeDuring the fiscal year 2024, we acquired property and equipment and construction in progress of $6,047,000, (of which $289,000 was purchase deposits transferred to property and equipment, $715,000 was purchase deposits transferred to CIP, and $4,000 was property and equipment in accounts payable), including $528,000 for renovations to three (3) Company-owned restaurants and $135,000 for one (1) limited partnership owned restaurant.
On February 23, 2023, we received from the Institutional Lender, a written waiver of the non-compliance with the Post-Distribution/Fixed Charge Covenant (the “Covenant Non-Compliance”), pursuant to which, among other things, the Institutional Lender waived (1) the non-compliance as of December 31, 2022 and (2) their right to exercise certain remedies under the Institutional Loans, including the right to accelerate the indebtedness owed by us thereunder, resulting in the indebtedness under the Institutional Loans to be immediately due and payable, which would have a material adverse effect on the Company.
On February 23, 2023, we received from the Institutional Lender, a written waiver of the non-compliance with the Post-Distribution/Fixed Charge Covenant (the “Covenant Non-Compliance”), pursuant to which, among other things, the Institutional Lender waived (1) the non-compliance as of December 31, 2022 and (2) their right to exercise certain remedies under the Institutional Loans, including the right to accelerate the indebtedness owed by us thereunder, resulting in the indebtedness under the Institutional Loans to be immediately due and payable, which would have had a material adverse effect on the Company.
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.
Affiliated Limited Partnership Owned Units . We manage and control the operations of ten of the eleven restaurants owned by limited partnerships, except the Fort Lauderdale, Florida restaurant which is managed and controlled by a related franchisee.
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”).
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 20, 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”).
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.
In addition, the following discussion and analysis should be read in conjunction with the 2024 and 2023 Consolidated Financial Statements and the related Notes to Consolidated Financial Statements included elsewhere in this report. 30 OVERVIEW Financial Information Concerning Industry Segments Our business is conducted principally in two segments: the restaurant segment and the package liquor store segment.
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.
During our 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.
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.
General As of September 28, 2024, we (i) operated 32 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.
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.
While we anticipate purchasing all of our rib supply from this vendor, we believe there are several other alternative vendors available, if needed. 35 Flanigan’s Fish Company, LLC As of September 28, 2024, Flanigan’s Fish Company, LLC, a Florida limited liability company (“FFC”), supplies certain fish to all of our restaurants.
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.
Financial information broken into these two principal industry segments for the two fiscal years ended September 28, 2024 and September 30, 2023 is set forth in the Consolidated Financial Statements which are attached hereto.
Notwithstanding the negative effects of COVID-19 on our operations, we believe that our current cash availability from our cash on hand, positive cash flow from operations and borrowed funds will be sufficient to fund our operations and planned capital expenditures for at least the next twelve months.
We believe that our current cash availability from our cash on hand, positive cash flow from operations and borrowed funds will be sufficient to fund our operations and planned capital expenditures for at least the next twelve months.
The FASB issued guidance, ASU 2016-13 Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which provides a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected.
Recently Adopted and Recently Issued Accounting Pronouncements Adopted The FASB issued guidance, Accounting Standards Update (ASU) 2016-13 Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which provides a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected.
The 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.
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.
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.
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.
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.
Occupancy Costs . 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 2024 increased $520,000 or 6.87% to $8,086,000 from $7,566,000 for our fiscal year 2023.
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.
Restaurant revenue generated from the sale of alcoholic beverages at restaurants totaled $30,010,000 for our fiscal year 2024 as compared to $29,000,000 for our fiscal year 2023.
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.
The increase was primarily due to increased payroll, increased consultant fees to improve our accounting process, an expected general increase in food costs, costs and expenses incurred from the opening of our Company-owned restaurant in Hollywood Florida (Store #19R) in March 2024, the operation of our limited partnership owned restaurant in Miramar, Florida (Store #25), and our package liquor stores in Miramar, Florida (Store #24) and Hollywood, Florida (Store #19P), for our entire fiscal year 2024 as opposed to a part of our fiscal year 2023, partially offset by actions taken by management to reduce and/or control costs.
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.
CASH FLOWS The following table is a summary of our cash flows for our fiscal years 2024 and 2023. ---------Fiscal Years-------- 2024 2023 (in thousands) Net cash provided by operating activities $ 6,630 $ 8,489 Net cash used in investing activities (5,141 ) (18,559 ) Net cash used in financing activities (5,619 ) (6,536 ) Net (Decrease) Increase in Cash and Cash Equivalents (4,130 ) (16,606 ) Cash and Cash Equivalents, Beginning 25,532 42,138 Cash and Cash Equivalents, Ending $ 21,402 $ 25,532 34 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.
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.
As a percentage of revenue, net income attributable to stockholders for our fiscal year 2024 is 1.78%, as compared to 2.29% for our fiscal year 2023.
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.
Gross profit for package store sales for our fiscal year 2024 increased to $10,369,000 from $9,377,000 for our fiscal year 2023. Our gross profit margin, (calculated as gross profit reflected as a percentage of package liquor store sales), for package store sales was 25.60% for our fiscal year 2024 and 26.65% for our fiscal year 2023.
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.
As a percentage of total revenue, net income for our fiscal year 2024 is 2.81%, as compared to 3.11% for our fiscal year 2023. Net Income Attributable to Flanigan’s Enterprise, Inc.’s Stockholders.
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 .
Gross profit margin for the restaurant food and bar sales decreased during our fiscal year 2024 when compared to our fiscal year 2023 due to higher food costs partially offset by, among other things, the Recent Price Increases.
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 .
Payroll and related costs as a percentage of total revenue was 31.51% for our fiscal year 2024 and 32.46% of total revenue for our fiscal year 2023. Operating Expenses .
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.
Purchase Commitments/Supply In order to fix the cost and ensure adequate supply of baby back ribs for our restaurants for calendar year 2025, we entered into a purchase agreement with a new rib supplier, whereby we agreed to purchase approximately $7.8 million of “2.5 & Down Baby Back Ribs” (weight range in which baby back ribs are sold) during calendar year 2025, at a prescribed cost, which we believe is competitive.
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.
Revenue generated from sales of liquor and related items at package liquor stores totaled $40,497,000 for our fiscal year 2024 as compared to $35,187,000 for our fiscal year 2023, an increase of $5,310,000.
The Post-Distribution/Fixed Charge Covenant requires we maintain a ratio of at least 1.15 to 1.00 and for the twelve (12) months ended September 30, 2023 our ratio was calculated to be 1.40 to 1.00. We have prepared projections going forward and expect to be in compliance. As a result, our classification of debt is appropriate as of September 30, 2023.
The Post-Distribution/Fixed Charge Covenant requires we maintain a ratio of at least 1.15 to 1.00 and for the twelve (12) months ended September 28, 2024 our ratio was calculated to be 1.62 to 1.00. As a result, our classification of debt is appropriate as of September 28, 2024.
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%.
Comparable weekly restaurant bar sales for restaurants open for all of our fiscal years 2024 and 2023 respectively, which consists of ten restaurants owned by us (excluding our Hollywood, Florida location (Store #19R) which opened for business during the second quarter of our fiscal year 2024) and nine restaurants owned by affiliated limited partnerships, (excluding our Miramar, Florida location (Store #25), which opened for business during the third quarter of our fiscal year 2023) was $526,000 for our fiscal year 2024 and $539,000 for our fiscal year 2023, a decrease of 2.41%.
The increase in our cost of baby back ribs for calendar year 2024 compared to calendar year 2023 is due to the increase in volume of our purchase of ribs for Store #25, Miramar, Florida being open for the entire calendar year and Store #19, Hollywood, Florida anticipated to be open for a part of the calendar year, offset by a decrease in market price.
The increase in our cost of baby back ribs for calendar year 2025 compared to calendar year 2024 is due to our purchase of larger sized baby back ribs and the purchase of baby back ribs for Store #19R, Hollywood, Florida for the entire calendar year, offset by a decrease in market price.
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 .
We anticipate that our operating costs and expenses will continue to increase through our fiscal year 2025. Operating costs and expenses increased as a percentage of total revenue to approximately 96.60% in our fiscal year 2024 from 95.97% in our fiscal year 2023. Gross Profit . Gross profit is calculated by subtracting the cost of merchandise sold from sales.
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.
Income tax for our fiscal year 2024 was an expense of $286,000, as compared to an expense of $649,000 for our fiscal year 2023. Income taxes as a percentage of income before provision for our fiscal year 2024 is 5.12% as compared to 10.70% in our fiscal year 2023. 33 Net Income.
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”.
New Limited Partnership Restaurants As new limited partnership 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 limited partnership locations.
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%.
Comparable weekly restaurant bar sales for affiliated limited partnership owned restaurants only (excluding our Miramar, Florida location (Store #25) which opened for business during the third quarter of our fiscal year 2023) was $292,000 and $307,000 for our fiscal years 2024 and 2023 respectively, a decrease of 4.89%.
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%.
Comparable weekly restaurant food sales for restaurants open for all of our fiscal years 2024 and 2023, which consists of ten restaurants owned by us (excluding our Hollywood, Florida location (Store #19R) which opened for business during the second quarter of our fiscal year 2024) and nine restaurants owned by affiliated limited partnerships, (excluding our Miramar, Florida location (Store #25) which opened for business during the third quarter of our fiscal year 2023) was $1,987,000 and $1,967,000 for our fiscal years 2024 and 2023 respectively, an increase of 1.02%.
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%.
The weekly average of same store package liquor store sales, which includes nine (9) Company-owned package liquor stores, (excluding Store #19P which reopened during the first quarter of fiscal year 2023, and Store #24 which opened for business during the second quarter of our fiscal year 2023), was $674,000 and $631,000 for our fiscal years 2024 and 2023 respectively, an increase of 6.81%.
University Drive, Hollywood, Florida (Store #19 – “Flanigan’s”) During the third quarter of our fiscal year 2019, we entered into an agreement with an unaffiliated third party architect for design and development services totaling $77,000 for the re-build of our restaurant located at 2505 N.
University Drive, Hollywood, Florida (Store #19 – “Flanigan’s”) 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 located at 2505 N.
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 .
We expect that restaurant food sales, including non-alcoholic beverages, for our fiscal year 2025 will increase due to increased restaurant traffic and the operation of our Company-owned Store #19R for our entire fiscal year 2025. Restaurant Bar Sales .
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.
Costs and expenses (consisting of cost of merchandise sold, payroll and related costs, operating expenses, occupancy costs, selling, general and administrative expenses and depreciation and amortization), for our fiscal year 2024 increased $14,553,000 or 8.70% to $181,925,000 from $167,372,000 for our fiscal year 2023.
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 .
Prior to these increases, we previously raised menu prices in the first quarter of our fiscal year 2022.
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.
Depreciation and amortization expense increased as a percentage of total revenue for our fiscal year 2024 to 2.27% as compared to 2.04% for our fiscal year 2023. Interest Expense, Net . Interest expense, net, for our fiscal year 2024 decreased $48,000 to $1,019,000 from $1,067,000 for our fiscal year 2023. Income Taxes.
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.
Prior to these increases, we previously raised menu prices in the first quarter of our fiscal year 2022. Restaurant Food Sales . Restaurant revenue generated from the sale of food, including non-alcoholic beverages, at restaurants totaled $114,795,000 for our fiscal year 2024 as compared to $107,238,000 for our fiscal year 2023.
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.
We repaid long term debt, including auto loans and mortgages in the amount of $1,251,000 and $2,299,000 in our fiscal years 2024 and 2023, respectively. Construction Contracts (a) 2505 N.
Inflation is affecting all aspects of our operations, including but not limited to food, beverage, fuel and labor costs. Supply chain issues also contribute to inflation. Inflation, including supply chain issues are having a material impact on our operating results.
The decrease is primarily due to the completion of the construction of our Store #19R ($2,106,000). Inflation is affecting all aspects of our operations, including but not limited to food, beverage, fuel and labor costs. Inflation is having a material impact on our operating results.
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.
The increase in restaurant food sales is attributable to the Recent Price Increases and food sales generated from the opening of corporate owned restaurant in Hollywood, Florida (Store #19R) during the second quarter of our fiscal year 2024 and the operation of our limited partnership owned restaurant in Miramar, Florida (Store #25) for our entire fiscal year 2024 as opposed to a part of our fiscal year 2023.
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.
There are no other recently issued accounting pronouncements that we have not yet adopted that we believe will have a material effect on our financial statements. 36 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.
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.
Subsequent to the end of our fiscal year 2024, we increased our menu prices for our bar offerings (effective December 4, 2024) to target an increase to our bar revenues of approximately 4.90% annually and we increased our menu prices for our food offerings (effective November 17, 2024) to target an increase to our food revenues of approximately 4.14% annually to offset higher food and liquor costs and higher overall expenses.
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.
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 65.57% for our fiscal year 2024 and 66.61% for our fiscal year 2023. Package Store Sales .
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 in FFC, the balance sheet and operating results of this entity are consolidated into the accompanying consolidated financial statements of the Company. Sales and purchases of fish are recognized in restaurant food sales and restaurant (cost of merchandise sold), respectively, in the consolidated statements of income at the time of sale to the restaurant.
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.
For discussion regarding our carryforwards refer to Note 10 to the consolidated financial statements for our fiscal year 2024. Leases Under Accounting Standards Codification Topic 842, Leases (“ASC 842”), lease arrangements must 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.
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.
RESULTS OF OPERATIONS REVENUES (in thousands): -----------------------For the Fiscal Year Ended----------------------- September 28, 2024 September 30, 2023 Amount Amount (In thousands) Percent (In thousands) Percent Restaurant food sales $ 114,795 61.95 $ 107,238 62.56 Restaurant bar sales 30,010 16.20 29,000 16.92 Package store sales 40,497 21.85 35,187 20.52 Total Sales $ 185,302 100.00 $ 171,425 100.00 Franchise related revenues 1,693 1,857 Rental income 1,105 951 Other revenues 221 163 Total Revenue $ 188,321 $ 174,396 31 Comparison of Fiscal Years Ended September 28, 2024 and September 30, 2023 Revenues.
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.
Total revenue for our fiscal year 2024 increased $13,925,000 or 7.98% to $188,321,000 from $174,396,000 for our fiscal year 2023 due primarily to increased package liquor store and restaurant sales, increased menu prices, revenue generated from the opening of our corporate owned restaurant in Hollywood, Florida (Store #19R) in March 2024, the operation of our limited partnership owned restaurant in Miramar, Florida (Store #25) and our package liquor stores in Miramar, Florida (Store #24) and Hollywood, Florida (Store #19P) for our entire fiscal year 2024 as opposed to a part of our fiscal year 2023.
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.
The increase in restaurant bar sales is attributable to the Recent Price Increases and food sales generated from the opening of corporate owned restaurant in Hollywood, Florida (Store #19R) during the second quarter of our fiscal year 2024 and the operation of our limited partnership owned restaurant in Miramar, Florida (Store #25) for our entire fiscal year 2024 as opposed to a part of our fiscal year 2023.
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.
In addition to the general partnership interest we also purchased limited partnership units ranging from 0% 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.
Payroll and related costs for our fiscal year 2023 were higher due primarily to the operation of our limited partnership owned restaurant in Sunrise, Florida (Store #85), and Brendan’s Sports Pub (Store #30) during our entire fiscal year 2023 as opposed to a part of our fiscal year 2022 and the operation of our limited partnership owned restaurant in Miramar, Florida (Store #25), the retail package liquor store in Hollywood, Florida (Store #19P), and the retail package liquor store in Miramar, Florida (Store #24) for a part of our fiscal year 2023 only and higher salaries to employees to remain competitive with other potential employees in a tight labor market.
Payroll and related costs for our fiscal year 2024 were higher due primarily to the opening of our corporate owned restaurant in Hollywood, Florida (Store #19R) in March 2024, the operation of our limited partnership owned restaurant in Miramar, Florida (Store #25) and our package liquor stores in Miramar, Florida (Store #24) and Hollywood, Florida (Store #19P) for our entire fiscal year 2024 as opposed to a part of our fiscal year 2023 and the increase to the Florida minimum wage.
Current 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.
Item September 28, 2024 September 30, 2023 (in Thousands) Current Assets $ 31,529 $ 35,294 Current Liabilities 19,924 22,371 Working Capital $ 11,605 $ 12,923 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 and positive cash flow from operations will adequately fund operations, debt reductions and planned capital expenditures throughout our fiscal year 2025.
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 expect that restaurant bar sales for our fiscal year 2025 will increase due to the operation of our Company-owned Store #19R for our entire fiscal year 2025. Package Liquor Store Sales .
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.
This increase was primarily due to increased package liquor store traffic and the package liquor sales generated from the operation of our package liquor stores in Hollywood, Florida (Store #19P) and Miramar, Florida (Store #24), for our entire fiscal year 2024 as opposed to a part of our fiscal year 2023.
This guidance would be effective for the Company in the first quarter of our fiscal year 2024; however, after performing a thorough analysis the Company concluded there is no material impact. 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.
This guidance was effective for the Company in the first quarter of our fiscal year 2024; however, after performing a thorough analysis the Company concluded there was no material impact from the adoption of this ASU.
We anticipate that our operating costs and expenses will increase through our fiscal year 2024 primarily due to our package liquor stores in Hollywood, Florida (Store #19P) and Miramar, Florida (Store #24) being open for business for our entire fiscal year 2024, our limited partnership owned restaurant in Miramar, Florida (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.
This increase is driven by the opening of our corporate owned restaurant in Hollywood, Florida (Store #19R) in March 2024, the operation of our limited partnership owned restaurant in Miramar, Florida (Store #25) and our package liquor stores in Miramar, Florida (Store #24) and Hollywood, Florida (Store #19P) for our entire fiscal year 2024 as opposed to a part of our fiscal year 2023.
University Drive, Hollywood, Florida (Store #19), which has been closed since October 2, 2018 due to damages caused by a fire, of which $62,000 has been paid.
University Drive, Building B, Hollywood, Florida (Store #19R), which had been closed since October 2, 2018 due to damage caused by a fire and re-opened March 26, 2024.
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.
Consolidation of Limited Partnerships As of September 28, 2024, we operate ten (10) 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.
Estimates associated with leases include lease classification, discount rate and lease term. Loyalty Programs We offer loyalty programs to customers of our restaurants and package liquor stores. The gift cards distributed as a part of our loyalty programs have expiration dates and we estimate breakage for such gift cards.
We adopted the standard in the first quarter of our fiscal 2020, using the modified retrospective approach. Estimates associated with leases include lease classification, discount rate and lease term. Loyalty Programs We offer loyalty programs to customers of our restaurants and package liquor stores.
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.
Selling, general and administrative expenses (consisting of general corporate expenses, including but not limited to advertising, professional costs, clerical and administrative overhead) for our fiscal year 2024 increased $658,000 or 14.05% to $5,340,000 from $4,682,000 for our fiscal year 2023 due primarily to increased consultant fees to improve our accounting process and otherwise to increases in expenses across all categories.
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.
In addition, the 49% of FFC owned by the unrelated third party is recognized as a noncontrolling interest in our consolidated financial statements. Working Capital The table below summarizes the current assets, current liabilities, and working capital as of the end of our fiscal years 2024 and 2023.
Selling, general and administrative expenses increased as a percentage of total revenue in our fiscal year 2023 to 18.29% as compared to 16.80% in our fiscal year 2022. 35 Depreciation and Amortization.
Selling, general and administrative expenses increased as a percentage of total revenue for our fiscal year 2024 to 2.84% as compared to 2.68% for our fiscal year 2023. Depreciation and Amortization. Depreciation and amortization expense for our fiscal year 2024 increased $707,000 or 19.85% to $4,268,000 from $3,561,000 for our fiscal year 2023.
As of September 30, 2023, we had cash and cash equivalents of approximately $25,532,000, a decrease of $16,606,000 from our cash balance of $42,138,000 as of October 1, 2022.
LIQUIDITY AND CAPITAL RESOURCES We fund our operations through cash from operations and borrowings from third parties. As of September 28, 2024, we had cash and cash equivalents of approximately $21,402,000, a decrease of $4,130,000 from our cash balance of $25,532,000 as of September 30, 2023.
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.
Net income attributable to stockholders for our fiscal year 2024 decreased $643,000 or 16.08% to $3,356,000 from $3,999,000 for our fiscal year 2023 due primarily to higher food costs and overall increased expenses, including but not limited to, increased consultant fees to improve our accounting process and a higher portion of our net income attributable to noncontrolling interests (specifically the operation of our Miramar location for our entire fiscal year 2024 as opposed to a part of our fiscal year 2023).
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.
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.
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%.
Comparable weekly restaurant food sales for Company-owned restaurants only (excluding our Hollywood, Florida location (Store #19R) which opened for business during the second quarter of our fiscal year 2024) was $938,000 and $923,000 for our fiscal years 2024 and 2023, respectively, an increase of 1.63%.
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.
We anticipate that the gross profit margin for package liquor store merchandise will decrease for our fiscal year 2025 due to higher costs and a reduction in pricing of certain package store merchandise to be more competitive. Payroll and Related Costs .
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.
The contract totaled $2,515,000 and through our fiscal year 2024 we agreed to change orders increasing the total contract price by $1,512,000 to $4,027,000, of which $3,905,000 has been paid through September 28, 2024.
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%.
Comparable weekly restaurant food sales for affiliated limited partnership owned restaurants only, (excluding our Miramar, Florida location (Store #25) which opened for business during the third quarter of our fiscal year 2023), was $1,049,000 and $1,044,000 for our fiscal years 2024 and 2023 respectively, an increase of 0.48%.
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 .
We expect that package liquor store sales for our fiscal year 2025 will increase due to increased package liquor store traffic. 32 Costs and Expenses .
Removed
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.
Added
Effective August 25, 2024, we increased menu prices for our bar offerings to target an increase to our bar revenues of approximately 5.63% annually to offset higher food and liquor costs.
Removed
Selling, general and administrative expenses increased due primarily to Store #85 and Store #30 being open for our entire fiscal year 2023 as opposed to a part of our fiscal year 2022 and Store #19P, Store #24and Store #25 being open during a part of our fiscal year 2023 only, increased consultant fees to improve our accounting process, inflation and otherwise to increases in expenses across all categories.
Added
Comparable weekly restaurant bar sales for Company-owned restaurants only (excluding our Hollywood, Florida location (Store #19R) which opened for business during the second quarter of our fiscal year 2024) was $234,000 and $231,000 for our fiscal years 2024 and 2023 respectively, an increase of 1.30%.
Removed
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.
Added
Restaurant Food and Bar Sales . Gross profit for food and bar sales for our fiscal year 2024 increased to $94,943,000 from $90,750,000 for our fiscal year 2023.
Removed
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.
Added
Payroll and related costs for our fiscal year 2024 increased $2,742,000 or 4.84% to $59,349,000 from $56,607,000 for our fiscal year 2023.
Removed
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.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeDuring 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.
Biggest changeOtherwise, as of September 28, 2024, our cash resources offset our bank charges and any excess cash resources earn interest at variable rates. Accordingly, our return on these funds is affected by fluctuations in interest rates.
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.
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 described in Note 13 “Fair Value Measurements of Financial Instruments” to the Consolidated Financial Statements included in “Item 8.
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.
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.
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.
Financial Statements and Supplementary Data” of this Annual Report on Form 10-K for our fiscal year ended September 28, 2024, we use interest rate swap agreements to manage these risks.
Removed
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.
Added
These instruments are not used for speculative purposes but are used to modify variable rate obligations into fixed rate obligations. 37 At the end of our fiscal year 2024, we had approximately $1,449,000 in 90-day certificates of deposit, government guaranteed and at fixed annual interest rates between 4.65%-5.45%.
Removed
The 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.
Removed
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
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”).
Removed
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.
Removed
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.

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