UNITED STATES SECURITIES AND EXCHANGE COMMISSION

DOCUMENTS INCORPORATED BY REFERENCE

Information required by Part III is incorporated by reference to portions of the Registrantís Proxy statement for the 2009 Annual Meeting of Shareholders which will be filed with the Securities and Exchange Commission by January 26, 2009.

FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

INDEX TO FORM 10-K

PART I.

Item 1		Business	5

Item 1A		Risk Factors	19

Item 2		Properties	23

Item 3		Legal Proceedings	28

Item 4		Submission of Matters to a Vote of Security Holders	29

PART II

Item 5		Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.	29

Item 6		Selected Financial Data.	31

Item 7		Management's Discussion and Analysis of Financial Condition and Results of Operation.	31

Item 7A		Quantitative and Qualitative Disclosures About Market Risk.	43

Item 8		Financial Statements and Supplementary Data.	43

Item 9		Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.	44

Item 9A(T)		Controls and Procedures.	44

Item 9B.		Other Information	45
PART III.

Item 10		Directors, Executive Officers and Corporate Governance	45

Item 11		Executive Compensation	45

Item 12		Security Ownership of Certain Beneficial Owners and Management and	45
	Related Stockholders Matters
Item 13		Certain Relationships and Related Transactions, and Director Independence.	45

Item 14		Principal Accountant Fees and Services	46

PART IV Item 15 Exhibits and Financial Statement Schedules. SIGNATURES			46
CERTIFICATIONS

As used in this Annual Report on Form 10-K, the terms ìwe,î ìus,î ìour,î the ìCompanyî and ìFlaniganísî mean Flanigan's Enterprises, Inc. and its subsidiaries (unless the context indicates a different meaning).

PART I

Item 1. Business

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When used in this report, the words "anticipate", "believe", "estimate", ìwillî, ìintendî and ìexpectî and similar expressions identify forward-looking statements. Forward-looking statements in this report include, but are not limited to, those relating to the general expansion of the Company's business. Although we believe that our plans, intentions and expectations reflected in these forward-looking statements are reasonable, we can give no assurance that these plans, intentions or expectations will be achieved. We undertake no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this annual report on Form 10-K.

General

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At September 27, 2008, we (i) operate 23 units, (excluding the adult entertainment club referenced in (ii) below), consisting of restaurants, package liquor stores and combination restaurants/package liquor stores that we either own or have operational control over and partial ownership in; (ii) own but do not operate one adult entertainment club; and (iii) franchise an additional six units, consisting of two restaurants, (one of which we operate) and four combination restaurants/package liquor stores. The table below provides information concerning the type (i.e. restaurant, package liquor store or combination restaurant/package liquor store) and ownership of the units (i.e. whether (i) we own 100% of the unit; (ii) the unit is owned by a limited partnership of which we are the sole general partner and/or have invested in; or (iii) the unit is franchised by us), as of September 27, 2008 and as compared to September 29, 2007. With the exception of ìThe Whaleís Ribî, a restaurant we operate but do not own, all of the restaurants operate under our service mark ìFlaniganís Seafood Bar and Grillî and all of the package liquor stores operate under our service mark ìBig Daddyís Liquorsî.

FISCAL FISCAL

YEAR YEAR NOTE

2008 2007 NUMBER

TYPES OF UNITS

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Company Owned:

Combination package liquor

store and restaurant 4 4

Restaurant only 3 3 (1)

Package liquor store only 5 5

Company Managed

Restaurants Only:

Limited partnerships 9 7 (2)(3)

Franchise 1 1

Unrelated Third Party 1 1

Company Owned Club: 1 1

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TOTAL - Company

Owned/Operated Units: 24 22

FRANCHISED - units 6 6 (4)

Notes:

(1) Includes a restaurant located in Lake Worth, Florida which we acquired from a franchisee during the second quarter of our fiscal year 2007 and which commenced operating as a Company owned restaurant on March 4, 2007.

(2) Includes a restaurant located in Pembroke Pines, Florida which is owned by a limited partnership in which we are the sole general partner and own 17% of the limited partnership interest and commenced operating on October 29, 2007.

(3) Includes a restaurant located in Davie, Florida which is owned by a limited partnership in which we are the sole general partner and own 48% of the limited partnership interest and commenced operating on July 28, 2008.

(4) We operate a restaurant for one (1) franchisee. This unit is included in the table both as a franchised restaurant, as well as a restaurant operated by us.

With the exception of our combination package store and restaurant located at 4 N. Federal Highway, Hallandale, Florida, (Store #31), which is operated on property owned by us, all of our package liquor stores, restaurants as well as our adult entertainment club are operated on properties leased from unaffiliated third parties.

History and Development of Our Business

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We were incorporated in Florida in 1959 and commenced operating as a chain of small cocktail lounges and package liquor stores throughout South Florida. By 1970, we had established a chain of "Big Daddy's" lounges and package liquor stores between Vero Beach and Homestead, Florida. From 1970 to 1979, we expanded our package liquor store and lounge operations throughout Florida and opened clubs in five other "Sun Belt" states. In 1975, we discontinued most of our package store operations in Florida except in the South Florida areas of Miami-Dade, Broward, Palm Beach and Monroe Counties. In 1982 we expanded our club operations into the Philadelphia, Pennsylvania area as general partner of several limited partnerships we organized. In March 1985 we began franchising package liquor stores and lounges in the South Florida area. See Note 7 to the consolidated financial statements and the discussion of franchised units on page 8.

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 81% and bar sales approximately 19% of our total restaurant sales.

Our package liquor stores emphasize high volume business by providing customers with a wide variety of brand name and private label merchandise at discount prices. Our restaurants offer alcoholic beverages and full food service with abundant portions and reasonable prices, served in a relaxed, friendly and casual atmosphere.

We conduct our operations directly and through a number of limited partnerships and wholly owned subsidiaries, all of which are listed below. Our subsidiaries and the limited partnerships, (except for the limited partnership, where we are not the general partner, which owns and operates our franchised restaurant in Fort Lauderdale, Florida) are reported on a consolidated basis.

	STATE OF	PERCENTAGE
ENTITY	ORGANIZATION	OWNED

Flaniganís Management Services, Inc.	Florida	100
Flaniganís Enterprises, Inc. of Georgia	Georgia	100
Flaniganís Enterprises, Inc. of Pa.	Pennsylvania	100
CIC Investors #13, Limited Partnership	Florida	40
CIC Investors #50, Limited Partnership	Florida	17
CIC Investors #55, Limited Partnership	Florida	48
CIC Investors #60, Limited Partnership	Florida	45
CIC Investors #65, Limited Partnership	Florida	28
CIC Investors #70, Limited Partnership	Florida	41
CIC Investors #75, Limited Partnership	Florida	13
CIC Investors #80, Limited Partnership	Florida	27
CIC Investors #95, Limited Partnership	Florida	30
Josar Investments, LLC	Florida	100

Package Liquor Store Operations

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Our package liquor stores emphasize high volume business by providing customers with a wide selection of brand name and private label liquors, beer and wines while offering competitive pricing by meeting the published sales prices of our competitors. We provide extensive sales training to our package liquor store personnel. The stores are open for business six or seven days a week from 9:00-10:00 a.m. to 9:00-10:00 p.m., depending upon demand and local law. Approximately half of the Company's units have "night windows" with extended evening hours.

Company Owned Package Liquor Stores. We own and operate nine package liquor stores in the South Florida area under the name ìBig Daddyís Liquorsî, four of which are jointly operated with restaurants we own.

Franchised Package Liquor Stores. We franchise four package liquor stores in the South Florida area, all of which are operated under the name ìBig Daddyís Liquorsî and are jointly operated with our franchiseeís restaurant operations. Three of the four franchised package liquor stores are franchised to members of the family of our Chairman of the Board, officers and/or directors. We have not entered into a franchise arrangement for either a package liquor store, restaurant or combination package liquor store/restaurant since 1986 and do not anticipate that we will do so in the foreseeable future.

Generally, a franchise agreement with our franchisees for the operation of a package liquor store runs for the balance of the term of the franchiseeís lease for the business premises, extended by the franchiseeís continued occupancy of the business premises thereafter, whether by lease or ownership. 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, ìBig Daddyís Liquorsî, 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.

Restaurant Operations.

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Our restaurants provide a neighborhood casual, standardized dining experience, typical of restaurant chains. The interior decor of the restaurants is nautical with numerous fishing and boating pictures and decorations. The restaurants are designed to permit minor modifications without significant capital expenditures. However, from time to time we are required to redesign and refurbish the restaurants at significant cost. Drink prices may vary between locations to meet local conditions. Food prices are substantially standardized for all restaurants. The restaurants' hours of operation are from 11:00 a.m. to 1:00-5:00 a.m. depending upon demand and local law.

Company Owned Restaurants. We own and operate seven restaurants all under our service mark ìFlaniganís Seafood Bar and Grillî four of which are jointly operated with package liquor stores we own. We acquired one of the seven restaurants we own, (the Lake worth, Florida restaurant), during the second quarter of our fiscal year 2007 from a former franchisee who informed us that he did not intend to continue operating the restaurant.

Franchised Restaurants. We franchise six restaurants, all of which operate under our service mark ìFlaniganís Seafood Bar and Grillî, two of which operate as a restaurant only and four of which operate jointly with a franchisee operated ìBig Daddyís Liquorsî package liquor store.

Generally, a franchise agreement with our franchisees for the operation of a restaurant runs for the balance of the term of the franchiseeís lease for the business premises, extended by the franchiseeís continued occupancy of the business premises thereafter, whether by lease or ownership. 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, ìFlaniganís Seafood Bar and Grillî, 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.

For accounting purposes, we do not consolidate the revenue and expenses of our franchiseesí operations with our revenue and expenses. Franchise royalties we receive are ìearnedî when sales are made by franchisees.

Restaurants Owned by Affiliated Limited Partnerships

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We have invested with others, (some of whom are or are affiliated with our officers and directors), in ten limited partnerships which currently own and operate ten South Florida based restaurants under our service mark ìFlaniganís Seafood Bar and Grillî. In addition to being a limited partner in these limited partnerships, we are the sole general partner of all of these limited partnerships and manage and control the operations of the restaurants except for the restaurant located in Fort Lauderdale, Florida where we only hold a limited partnership interest.

Generally, the terms of the limited partnership agreements provide that until the investorsí cash investment in a limited partnership (including any cash invested by us) is returned in full, the limited partnership distributes to the investors annually out of available cash from the operation of the restaurant, as a return of capital, up to 25% of the cash invested in the limited partnership, with no management fee paid to us. Any available cash in excess of the 25% of the cash invested in the limited partnership distributed to the investors annually, is paid one-half (‡) to us as a management fee and one-half (1/2) to the investors, (including us), prorata based on the investorsí investment, as a return of capital. Once all of the investors, (including us), have received, in full, amounts equal to their cash invested, an annual management fee becomes payable to us equal to one-half (‡) of cash available to be distributed, with the other one half (‡) of available cash distributed to the investors (including us), as a profit distribution, pro-rata based on the investorsí investment. As of September 27, 2008, limited partnerships owning three (3) restaurants, (Surfside, Florida, Kendall, Florida and West Miami, Florida locations), have returned all cash invested and we receive an annual management fee equal to one-half (‡) of the cash available for distribution by the limited partnership. In addition to our receipt of distributable amounts from the limited partnerships, we receive a fee equal to 3% of gross sales for use of our ìFlaniganís Seafood Bar and Grillî service mark, which use is authorized while we act as general partner only. This 3% fee is ìearnedî when sales are made by the limited partnerships and is paid weekly, in arrears. We anticipate that we will continue to form limited partnerships to raise funds to own and operate restaurants under our service mark ìFlaniganís Seafood Bar and Grillî using the same or substantially similar financial arrangement.

Below is information on the ten limited partnerships which own and operate ìFlaniganís Seafood Bar and Grillî restaurants:

Pinecrest, Florida

We are the sole general partner and 40% limited partner in this limited partnership which has owned and operated a restaurant in Pinecrest, Florida under our ìFlaniganís Seafood Bar and Grillî service mark since August 14, 2006. 15.0% of the remaining 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 2008, this limited partnership has returned to its investors approximately 18% of their initial cash invested.

Fort Lauderdale, Florida

A corporation, owned by one of our directors, acts as sole general partner of a limited partnership which has owned and operated a restaurant in Fort Lauderdale, Florida under our ìFlaniganís Seafood Bar and Grillî service mark since April 1, 1997. We have a 25% limited partnership interest in this limited partnership. 58.8% of the remaining 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 2008, this limited partnership has returned to its investors all cash invested, but since we are not the general partner of this limited partnership, we do not receive an annual management fee. We have a franchise arrangement with this limited partnership and for accounting purposes, we do not consolidate the operations of this limited partnership into our operations.

Surfside, Florida

We are the sole general partner and a 45% limited partner in this limited partnership which has owned and operated a restaurant in Surfside, Florida under our ìFlaniganís Seafood Bar and Grillî service mark since March 6, 1998. 34.9% of the remaining 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 2008, 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 (‡) of the cash available for distribution by this limited partnership.

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 ìFlaniganís Seafood Bar and Grillî service mark since April 4, 2000. 29.7% of the remaining 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 2008, 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 (‡) of the cash available for distribution by this limited partnership.

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 ìFlaniganís Seafood Bar and Grillî service mark since October 11, 2001. 34.1% of the remaining 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 2008, 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 (‡) of the cash available for distribution by this limited partnership.

Weston, Florida

We are the sole general partner and a 30% limited partner in this limited partnership which has owned and operated a restaurant in Weston, Florida under our ìFlaniganís Seafood Bar and Grillî service mark since January 20, 2004. 35.1% of the remaining 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 2008, this limited partnership has returned to its investors approximately 73.75% of their initial cash invested. During the first quarter of our fiscal year 2009, no distribution was made to limited partners as this limited partnership had limited cash flow generated by this restaurant. The limited cash flow was primarily attributable to increased competition, which we expect to continue into our fiscal year 2009.

Stuart, Florida

We are the sole general partner and 13% limited partner in this limited partnership which has owned and operated a restaurant in a Howard Johnsonís Hotel in Stuart, Florida under our ìFlaniganís Seafood Bar and Grillî service mark since January 11, 2004. 31.0% of the remaining 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 2008, this limited partnership has returned to its investors approximately 22.5% of their initial cash invested. During our fiscal year 2006, the limited partners of this limited partnership only received three (3) quarterly distributions due to the limited cash flow generated by the restaurant. During our fiscal years 2007 and 2008, no distributions were made to limited partners as this limited partnership had net losses of $98,000 and $8,000 from the operation of the restaurant during the fiscal years 2007 and 2008, respectively, before depreciation and amortization, and owed the Company $203,000 and $216,000, as of the end of our fiscal years 2007 and 2008, respectively, in advances made to meet operating losses.

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 ìFlaniganís Seafood Bar and Grillî service mark since May 27, 2005. 25.7% of the remaining 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 2008, this limited partnership has returned to its investors approximately 41% of their initial cash invested.

Davie, Florida

We are the sole general partner and a 48% limited partner in this limited partnership which has owned and operated a restaurant in Davie, Florida under our ìFlaniganís Seafood Bar and Grillî service mark since July 28, 2008. 9.7% of the remaining 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 2008, this limited partnership has yet to return to its investors any of their initial cash invested.

Pembroke Pines, Florida

We are the sole general partner and a 17% limited partner in this limited partnership which has owned and operated a restaurant in Pembroke Pines, Florida under our ìFlaniganís Seafood Bar and Grillî service mark since October 29, 2007. 17.9% of the remaining 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 2008, this limited partnership has returned to its investors approximately 7.0% of their initial cash invested.

Management Agreement for ìThe Whaleís Ribî Restaurant

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Since January, 2006, we have managed ìThe Whaleís Ribî, a casual dining restaurant located in Deerfield Beach, Florida, pursuant to a management agreement. We paid $500,000 in exchange for our rights to manage this restaurant. The restaurant is owned by a third party unaffiliated with us. In exchange for providing management, bookkeeping and related services, we receive one-half (‡) of the net profit, if any, from the operation of the restaurant. The term of the management agreement, which commenced January 9, 2006, is for ten (10) years, with four (4) five (5) year renewal options in favor of the owner of the restaurant. For our fiscal years ended September 27, 2008 and September 29, 2007, we generated $150,000 and $160,000 of revenue, respectively, from providing these management services.

Adult Entertainment Club

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We own, but do not operate, an adult entertainment nightclub located in Atlanta, Georgia which operates under the name ìMardi Grasî. We have a management agreement with an unaffiliated third party to manage the club. Effective May 1, 2006, the unaffiliated third party that manages the club became obligated under a new lease for the business premises where the club operates for a period of ten (10) years, with one (1) ten (10) year renewal option and as of such date we are no longer obligated under the lease. Under our management agreement, the unaffiliated third party management firm is obligated to pay us an annual amount, paid monthly, equal to the greater of $150,000 or ten (10%) percent of gross sales from the club, offset by one-half (1/2) of any rental increases, provided our fees will never be less than $150,000 per year. For our fiscal years ended September 27, 2008 and September 29, 2007, we generated $238,000 and $203,000 of revenue, respectively, from the operation of the club.

Operations and Management

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

All of our managers and salespersons receive extensive training in sales techniques. We arrange for independent third parties, or "shoppers", to inspect each unit in order to evaluate the unit's operations, including the handling of cash transactions.

Purchasing and Inventory

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The package liquor business requires a constant substantial capital investment in inventory in the units. Our inventory consists primarily of liquor and wine products and as such, does not become excessive or obsolete that would require identifying and recording of the same. Liquor inventory purchased can normally be returned only if defective or broken.

All of our purchases of liquor inventory are made through our purchasing department from our corporate headquarters. The major portion of inventory is purchased under individual purchase orders with licensed wholesalers and distributors who deliver the merchandise within one or two days of the placing of an order. Frequently there is only one wholesaler in the immediate marketing area with an exclusive distributorship of certain liquor product lines. Substantially all of our liquor inventory is shipped by the wholesalers or distributors directly to our stores. We significantly increase our inventory prior to Christmas, New Year's Eve and other holidays. Under Florida law, we are required to pay for our liquor purchases within ten days of delivery.

During the second quarter of our fiscal year, we contracted for the purchase of a new point of sale computer system for our package liquor stores, at a cost of approximately $237,000, including the cost to customize and test the new system, but excluding a surveillance camera system which we estimate will cost an additional $118,000. We also paid approximately $50,000 to purchase universal wireless hand-held scanners, which payment is in addition to the contracted amount. The testing of the new point of sale computer system was successfully completed during our fiscal year 2008, we used the wireless hand-held scanners to take our fiscal year end liquor inventory and the new point of sale computer system was installed during the first quarter of our fiscal year 2009. The package liquor stores began using the new point of sale computer system on November 2, 2008. The final cost of the new point of sale computer system, including hand-held, wireless scanners but excluding surveillance camera system, is approximately $287,000, of which approximately $266,000 has been paid to date.

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. Food is delivered by the supplier directly to each restaurant. Orders are placed several times a week to ensure product freshness. Food inventory is primarily paid for monthly.

Government Regulation

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

Alcoholic beverage control regulations require each of our restaurants and package liquor stores to obtain a license to sell alcoholic beverages from a state authority and in certain locations, county and municipal authorities.

In Florida, where all of our restaurants and package liquor stores are located, most of our liquor licenses are issued on a "quota license" basis. Quota licenses are issued on the basis of a population count established from time to time under the latest applicable census. Because the total number of liquor licenses available under a quota license system is limited and restrictions placed upon their transfer, the licenses have purchase and resale value based upon supply and demand in the particular areas in which they are issued. The quota licenses held by us allow the sale of liquor for on and off premises consumption. In Florida, the other liquor licenses held by us or limited partnerships of which we are the general partner are restaurant liquor licenses, which do not have quota restrictions and no purchase or resale value. A restaurant liquor license is issued to every applicant who meets all of the state and local licensing requirements, including, but not limited to zoning and minimum restaurant size, seating and menu. The restaurant liquor licenses held by us allow the sale of liquor for on premises consumption only.

In the State of Georgia, where our adult entertainment club is located, licensed establishments also do not have quota restrictions for on-premises consumption and such licenses are issued to any applicant who meets all of the state and local licensing requirements based upon extensive license application filings and investigations of the applicant.

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

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

During our fiscal years 2007 and 2008, 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 ìdram-shopî statutes due to our restaurant operations and club ownership. These statutes generally provide a person injured by an intoxicated person the right to recover damages from an establishment that wrongfully served alcoholic beverages to the intoxicated individual. We carry liquor liability coverage as part of our existing comprehensive general liability insurance, which we believe is consistent with coverage carried by other entities in the restaurant industry. Although we are covered by insurance, a judgment against us under a dram-shop statute in excess of our liability coverage could have a material adverse effect on us.

Our operations are also subject to federal and state laws governing such matters as wages, working conditions, citizenship requirements and overtime. Some states, including Florida, have set minimum wage requirements higher than the federal level. Significant numbers of hourly personnel at our restaurants are paid at rates related to the Florida minimum wage and, accordingly, increases in the minimum wage will increase labor costs. We are also subject to the Americans With Disability Act of 1990 (ADA), which, among other things, may require certain renovations to our restaurants to meet federally mandated requirements. The cost of any such renovations is not expected to materially affect us.

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

General Liability Insurance

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We have general liability insurance which incorporates a semi-self-insured plan under which we assume the full risk of the first $50,000 of exposure per occurrence, while the limited partnerships assume the full risk of the first $10,000 of exposure per occurrence. Our insurance carrier is responsible for $1,000,000 coverage per occurrence above our self-insured deductible, up to a maximum aggregate of $2,000,000 per year. During our fiscal year 2007 and again in fiscal year 2008 we were able to purchase excess liability insurance at a reasonable premium, whereby our excess insurance carrier is responsible for $6,000,000 coverage above our primary general liability insurance coverage. With the exception of one (1) limited partnership which has higher general liability insurance coverage to comply with the terms of its lease for the business premises, we are un-insured against liability claims in excess of $7,000,000 per occurrence and in the aggregate.

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. We have established a select group of defense attorneys which we use in conjunction with this program. Under our current liability insurance policy, any expense incurred by us in defending a claim, including adjusters and attorney's fees, are a part of our $50,000 self-insured retention.

An accrual for our estimated liability claims is included in the consolidated balance sheets in the caption "Accounts payable and accrued expenses". A significant unfavorable judgment or settlement against us in excess of our liability insurance coverage could have a materially adverse effect on the Company.

Property Insurance; Windstorm Insurance; Deductibles

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For the policy year commencing December 30, 2008, our property insurance will provide for full insurance coverage for property losses, including those caused by windstorm, such as a hurricane, and will be the first year of our two (2) year property insurance policy with our insurance carrier. For property losses caused by windstorm, the property insurance will have deductibles of 5% per location, per occurrence. For all other property losses, the property insurance will have deductibles of $10,000 per location, per occurrence. Our insurance expense for the policy year commencing December 30, 2008, including insurance coverage for our consolidated limited partnerships, estimated at $294,000, decreased by approximately $140,000, (32%), due primarily to decreases in windstorm insurance coverage. Our insurance expense for the policy year commencing December 30, 2009 will remain the same, excluding only increases and/or decreases in insurance expense due to changes in insurable values.

For the policy year which commenced December 30, 2007, our property insurance provided for full insurance coverage for property losses, other than those caused by windstorm, such as a hurricane. The losses caused by hurricanes during the 2004 and 2005 hurricane seasons in South Florida made windstorm insurance coverage difficult to obtain and, where available, expensive to the point that full windstorm coverage for all locations was economically prohibitive. For those locations east of I-95, windstorm insurance coverage was only available through the State of Florida sponsored insurance fund and then limited to $1,000,000 per building, including personal property, but without business interruption insurance. The State of Florida sponsored insurance fund had deductibles of 3% per location, per occurrence. Windstorm coverage for locations west of I-95 was procured through a private insurance carrier, including business interruption insurance, which provided coverage of $10,000,000 per occurrence and in the aggregate, with ìnamed storm deductiblesî of 5% per location per occurrence, with a minimum deductible of $100,000 per occurrence and ìother windstorm deductiblesî of $100,000 per occurrence. The windstorm policy provided by the private insurance carrier contained a limitation on recovery for roof replacement, with any roofs dating prior to 2001 being covered for their actual replacement value, in lieu of their replacement cost. We determined that only two roofs at our locations west of I-95 for which we and/or our limited partnerships are responsible, pre-date 2001 so the exposure due to the roof replacement limitation was not significant. The private insurance policy also provided business interruption insurance for locations east of I-95, with a deductible of 5% per location, per occurrence, for business interruption insurance, as well as windstorm insurance in excess of the primary coverage provided through the State of Florida sponsored insurance fund. Management believed that the windstorm insurance coverage effective December 30, 2007 would have provided adequate insurance coverage for all locations in the event of a hurricane, but in the event that more than four (4) locations had been destroyed by a hurricane, thereby requiring total reconstruction, the windstorm insurance coverage may have been inadequate and we and/or the limited partnership may have had to bear the cost of any uninsured expenses, which may have had a material adverse effect upon the financial condition and/or results of operations of the Company. Our insurance expense for the policy year commencing December 30, 2007, including insurance coverage for our consolidated limited partnerships, estimated at $434,000, decreased by approximately $153,000, (26%), due primarily to decreases in windstorm insurance coverage. During the policy year commencing December 30, 2007, neither we, nor any of our limited partnerships, made a claim against our property insurance.

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. We believe that the principal means of competition among package liquor stores is price and that, in general, the principal means of competition among restaurants include the location, type and quality of facilities and the type, quality and price of beverage and food served.

Our package liquor stores compete directly or indirectly with local retailers and discount "superstores". Due to the competitive nature of the liquor industry in South Florida, we have had to adjust our pricing to stay competitive, including meeting all competitorsí advertisements. Such practices will continue in the package liquor business. We believe that we have a competitive position in our market because of widespread consumer recognition of the "Big Daddy's" and "Flanigan's" names.

We have many well-established competitors, both nationally and locally owned, with substantially greater financial resources and a longer history of operations 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.

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 two service marks; "Big Daddy's Liquors" and "Flanigan's Seafood Bar and Grill", both of which are federally registered trademarks owned by us. Our right to the use of the "Big Daddy's" service mark is set forth under a consent decree of a Federal Court entered into by us in settlement of federal trademark litigation. The consent decree and the settlement agreement allow us to continue to use and to expand our use of the "Big Daddy'sî service mark in connection with limited food and liquor sales in Florida, while restricting the future sale of distilled spirits in Florida under the "Big Daddy's" name by the other party who has a federally registered service mark for "Big Daddy's" use in the restaurant business. The Federal Court retained jurisdiction to enforce the consent decree. We have acquired registered Federal trademarks on the principal register for our "Flanigan's" and ìFlaniganís Seafood Bar and Grillî service marks.

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 Companyís founder, Joseph "Big Daddy" Flanigan, and is a federally registered trademark owned by us.

Employees

---------

As of our fiscal year end 2008, we employed 1003 persons, of which 752 were full-time and 251 were part-time. Of these, 36 were employed at the corporate offices in administrative capacities and 5 were employed in maintenance. Of the remaining employees, 44 were employed in package liquor stores and 918 in restaurants.

None of our employees are represented by collective bargaining organizations. We consider our labor relations to be favorable.

EXECUTIVE OFFICERS OF THE REGISTRANT

Positions and Offices Office or Position

Name Currently Held Age Held Since

---- --------------------- --- ------------------

James G. Flanigan Chairman of the Board 44 (1)

of Directors, Chief

Executive Officer and

President

August Bucci Chief Operating Officer 64 2002

and Executive Vice

President

Jeffrey D. Kastner Chief Financial Officer 55 (2)

General Counsel and

Secretary

Jean Picard Vice President of 70 2002

Package Liquor Store

Operations

(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.

Flanigan's 401(k) Plan

----------------------

Effective July 1, 2004, we began sponsoring a 401(k) retirement plan covering substantially all employees who meet certain eligibility requirements. Employees may contribute elective deferrals to the plan up to amounts allowed under the Internal Revenue Code. We are not required to contribute to the plan but may make discretionary profit sharing and/or matching contributions. During our fiscal years ended September 27, 2008 and September 29, 2007, the Board of Directors approved discretionary matching contributions totaling $30,000 and $29,000, respectively.

Item 1A Risk Factors

------------------------

An investment in our common stock involves a high degree of risk. These risks should be considered carefully with the uncertainties described below, and all other information included in this Annual Report on Form 10-K, before deciding whether to purchase our common stock. Additional risks and uncertainties not currently known to management or that management currently deems immaterial may also become important factors that may harm our business, financial condition or results or operations. The occurrence of any of the following risks could harm our business, financial condition and results of operations. The trading price of our common stock could decline due to any of these risks and uncertainties and you may lose part or all of your investment.

Certain statements in this report contain forward-looking information. In general, forward-looking statements include estimates of future revenues, cash flows, capital expenditures, or other financial items and assumptions underlying any of the foregoing. Forward-looking statements reflect managementís current expectations regarding future events and use words such as ìanticipateî, ìbelieveî, ìexpectî, ìmayî, ìwillî and other similar terminology. These statements speak only as of the date they were made and involve a number of risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Several factors, many beyond our control, could cause actual results to differ materially from managementís expectations.

General Economic Factors May Adversely Affect Results of Operations

-------------------------------------------------------------------

The disruption experienced in the United States and global credit markets during the second half of calendar year 2008 has adversely affected disposable consumer income and consumer confidence. Prolonged negative changes in domestic and global economic conditions or disruptions of either or both of the financial and credit markets may have a material adverse effect on our results of operations, financial condition and liquidity. At this time, it is unclear whether and to what extent the actions taken by the United States government, including, without limitation, the passage of the Emergency Economic Stabilization Act of 2008 and other measures currently being implemented or contemplated, will mitigate the effect of the crisis. With respect to the Company, while we have no immediate need to access the credit markets in the foreseeable future, the impact of the current crisis on our ability to obtain financing in the future, if needed, and the cost and terms of the same is unclear. From an operating standpoint, the current financial crisis has resulted in reduced customer traffic in some or all of our restaurants and/or package liquor stores, reduced revenues and profitability, increased costs and imposed practical limits on our menu pricing. A continued decline in revenues and/or profitability may result in a deterioration of our financial position.

Fluctuations in Commodity Prices and Availability of Commodities Including Pork, Beef, Fish, Poultry and Dairy Could Affect Our Business

-----------------------------------------------------------------------------

A significant component of our costs are related to food commodities including pork, beef, fish, poultry and dairy products. If there is a substantial increase in prices for these products and we are unable to offset the increases with changes in menu prices, our results could be negatively affected.

Our Business Could Be Materially Adversely Affected If We Are Unable To Expand In A Timely And Profitable Manner

----------------------------------------

To grow successfully, we must open new restaurants on a timely and profitable basis. We have experienced delays in restaurant openings from time to time and may experience delays in the future. During fiscal year 2008, due to delays in the permitting process and construction, the Pembroke Pines, Florida and Davie, Florida restaurants were opened after substantial delays. Increases in labor and building material costs increased the cost of planned renovations to the Davie, Florida restaurant by approximately $1,000,000.

Our ability to open and profitably operate restaurants and/or package liquor stores is subject to various risks such as identification and availability of suitable and economically viable locations, the negotiation of acceptable leases or the purchase terms of existing locations, the availability of limited partner investors or other means to raise capital, the need to obtain all required governmental permits (including zoning approvals) on a timely basis, the need to comply with other regulatory requirements, the availability of necessary contractors and subcontractors, the availability of construction materials and labor, the ability to meet construction schedules and budgets, variations in labor and building material costs, changes in weather or other acts of God that could result in construction delays and adversely affect the results of one or more restaurants and/or package liquor stores for an indeterminate amount of time. If we are unable to successfully manage these risks, 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

-----------------------------------------------------------------------------

Changing customer preferences, tastes and dietary habits can adversely impact our business and financial performance. We offer a large variety of entrees, side dishes and desserts and its continued success depends, in part, on the popularity of our cuisine and casual style of dining. A change from this dining style may have an adverse effect on our business.

Labor Shortages, an Increase in Labor Costs, or Inability to Attract Employees Could Harm Our Business

-----------------------------------------------------------------------------

Our employees are essential to our operations and our ability to deliver an enjoyable dining experience to our customers. If we are unable to attract and retain enough qualified restaurant and/or package liquor store personnel at a reasonable cost, and if they do not deliver an enjoyable dining experience, our results may be negatively affected. Additionally, competition for qualified employees could require us to pay higher wages, which could result in higher labor costs.

Increases in Employee Minimum Wages by the Federal or State Government Could Adversely Affect Business

-----------------------------------------------------------------------------

Certain of our Company employees are paid wages that relate to federal and state minimum wage rates. Increases in the minimum wage rates, such as annual cost of living increases in the State of Florida minimum wage, may significantly increase our labor costs. In addition, since our business is labor-intensive, shortages in the labor pool or other inflationary pressure could increase labor costs, which could harm our financial performance.

Due to Our Geographic Locations, Restaurants are Subject to Climate Conditions that Could Affect Operations

-----------------------------------------------------------------------------

All but one (1) of our restaurants and package liquor stores are located in South Florida, with the remaining restaurant located in Central Florida. During hurricane season, (June 1^st through November 30^th each year), our restaurants and/or package liquor stores may face harsh weather associated with hurricanes and tropical storms. These harsh weather conditions may make it more difficult for customers to visit our restaurants and package liquor stores, or may necessitate the closure of the stores and restaurants for a period of time. If customers are unable to visit our restaurants and/or package liquor stores, our sales and operating results may be negatively affected.

Due to Our Geographic Locations, We May Not be Able to Acquire Windstorm Insurance Coverage or Adequate Windstorm Insurance Coverage at a Reasonable Rate

-----------------------------------------------------------------------------

Due to the anticipated active hurricane seasons in South Florida in the future, we may not be able to acquire windstorm insurance coverage for our restaurant and package liquor store locations on a year-to-year basis or may not be able to get adequate windstorm insurance coverage at reasonable rates. If we are unable to obtain windstorm insurance coverage or adequate windstorm insurance coverage at reasonable rates, then we will be self-insured for all or a part of the exposure for damages caused by a hurricane impacting South Florida, which may have a material adverse effect upon our financial condition and/or results of operations.

Inability to Attract and Retain Customers Could Affect Results of Operations

-----------------------------------------------------------------------------

We take pride in our ability to attract and retain customers, however, if we do not deliver an enjoyable dining experience for our customers, they may not return and results may be negatively affected.

We May Face Liability Under Dram Shop Statutes

----------------------------------------------

Our sale of alcoholic beverages subjects us to ìdram shopî statutes. These statutes allow an injured person to recover damages from an establishment that served alcoholic beverages to an intoxicated person. If we receive a judgment substantially in excess of our insurance coverage, or if we fail to maintain our insurance coverage, our business, financial condition, operating results or cash flows could be materially and adversely affected. We currently have no ìdram shopî claims. See ìItem 1. Business—Government Regulationî for a discussion of the regulations with which we must comply.

We May Face Instances of Food Borne Illness

-------------------------------------------

During our fiscal year 2007, several nationally known restaurants experienced outbreaks of food poisoning believed to be caused by E.coli contained in fresh spinach, which is not included in any of the items on our menu. In years past, Asian and European countries experienced outbreaks of avian flu. Incidents of ìmad cowî disease have occurred in Canadian and U.S. cattle herds. 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.

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. If we react to negative publicity by changing our menu or other key aspects of the dining experience we offer, we may lose customers who do not accept those changes, and may not be able to attract enough new customers to produce the revenue needed to make our restaurants profitable. If our guests become ill from food-borne illnesses, we could be forced to temporarily close some restaurants. A decrease in guest traffic as a result of health concerns or negative publicity, or as a result of a change in our menu or dining experience or a temporary closure of any of our restaurants, could materially harm our business.

We Face Competition in the Restaurant and Liquor Industries, and If We are Unable to Compete Effectively, Our Business and Financial Performance will be Adversely Affected

-----------------------------------------------------------------------------

The restaurant and liquor industries are intensely competitive and are affected by changes in customer tastes, dietary habits and by economic and demographic trends. New menu items, concepts and trends are constantly emerging. We compete on quality, variety, value, service, price and location. If we are unable to compete effectively, our business, financial condition and results of operations will be materially adversely affected.

Item 2. Properties

------------------

Our operations are conducted primarily on leased property with the exception of (i) our corporate headquarters, which is conducted in an office building and the land upon which it is built, which we purchased in December, 1999 and have occupied since April 2001; and (ii) our combination restaurant and package liquor store in Hallandale, Florida which operates in a building and the land upon which it is built, which we purchased in July, 2006.

All of our units require periodic refurbishing in order to remain competitive. We have budgeted $700,000 for our refurbishing program for fiscal year 2009. See Item 7, "Liquidity and Capital Resources" for discussion of the amounts spent in fiscal year 2008.

The following table summarizes information related to the properties upon which our operations are conducted:

Square Franchised/

Name and Location Footage Seats Owned by Lease Terms

----------------- ------- ----- -------- -----------

Big Daddy's Liquors #4 1,978 N/A Company 3/1/02 to 2/28/27

Flanigan's Enterprises and Options to

Inc. (6) 2/28/47

7003 Taft Street

Hollywood, FL

Big Daddy's Liquors #7 1,450 N/A Company 11/1/00 to 10/31/09

Flanigan's Enterprises and Annual Options

Inc. to 10/31/15

1550 W. 84th Street

Hialeah, FL

Square Franchised/

Name and Location Footage Seats Owned by Lease Terms

----------------- ------- ----- -------- -----------

Big Daddy's Liquors #8 1,942 N/A Company 5/1/99 to 4/30/14

Flanigan's Enterprises

Inc.

959 State Road 84

Fort Lauderdale, FL

Flanigan's Seafood 4,300 130 Company 10/1/71 to 12/31/09

Bar and Grill #9 New lease 1/1/10

Flanigan's Enterprises to 12/31/14

Inc. Options to

1550 W. 84^th Street 12/31/24

Hialeah, FL

Flanigan's Legends 5,000 150 Franchise 1/4/00 to 1/3/20

Seafood Bar and Grill Option to 1/3/25

#11, 11 Corporation (1)

330 Southern Blvd.

W. Palm Beach, FL

Flanigan's Seafood 5,000 180 Company 11/15/92 to

Bar and Grill #12 11/15/09

Flaniganís Enterprises, Option to

Inc. (11) 11/15/10

2405 Tenth Ave. North

Lake Worth, FL

Flanigan's Seafood 3,320 90 Franchise 6/1/79 to 6/1/09

Bar and Grill #14 Options to 6/1/19

Big Daddy's #14, Inc. (1)(2)(5)

2041 NE Second St.

Deerfield Beach, FL

Flaniganís Seafood 4,000 90 Franchise/ 3/2/76 to 8/31/11

Bar and Grill #15 Limited

CIC Investors #15 Ltd.(1)(2) Partnership

1479 E. Commercial Blvd.

Ft. Lauderdale, FL

Flanigan's Seafood 4,300 100 Franchise 2/15/72 to 12/31/10

Bar and Grill #18 Options to

Twenty Seven Birds 12/31/20

Corp. (1)(2)

2721 Bird Avenue

Miami, FL

Flaniganís Seafood 4,500 160 Company 3/1/72 to 12/31/10

Bar and Grill #19 Options to 12/31/20

Flaniganís Enterprises

Inc.

2505 N. University Dr.

Hollywood, FL

Square Franchised/

Name and Location Footage Seats Owned by Lease Terms

----------------- ------- ----- -------- -----------

Flanigan's Seafood 5,100 140 Company 7/15/68 to 12/31/09

Bar and Grill #20 Annual options

Flanigan's Enterprises until the Company

Inc. fails to exercise

13205 Biscayne Blvd. Additional Lease

North Miami, FL 5/1/69 to 12/31/09

Annual options

until the Company

fails to exercise

Flanigan's Seafood 4,100 200 Company 12/16/68 to

Bar and Grill #22 12/31/10

Flanigan's Enterprises Options to 12/31/20

Inc. Option to purchase

2600 W. Davie Blvd.

Ft. Lauderdale, FL

Flanigan's Seafood 4,600 150 Company Company Owned

Bar and Grill #31

Flanigan's Enterprises

Inc. (7)

4 N. Federal Highway

Hallandale, FL

Flanigan's Guppy's 4,620 130 Franchise 11/1/03 to 4/30/11

Seafood Bar and Grill #33

Guppies, Inc. (1)(2)

45 S. Federal Highway

Boca Raton, FL

Big Daddy's Liquors 3,000 N/A Company 5/29/97 to 5/28/12

#34, Flanigan's Option to 5/28/17

Enterprises, Inc.

9494 Harding Ave.

Surfside, FL

Flanigan's Seafood 4,600 140 Company 4/1/71 to 12/31/10

Bar and Grill #40, Option to 12/31/15

Flanigan's Enterprises

Inc.

5450 N. State Road 7

N. Lauderdale, FL

Piranha Pat's #43 4,500 90 Franchise 12/1/72 to 11/30/12

BD 43 Corporation (1)(2) Option to 11/30/22

2500 E. Atlantic Blvd.

Pompano Beach, FL

Square Franchised/

Name and Location Footage Seats Owned by Lease Terms

----------------- ------- ----- -------- -----------

Big Daddy's Liquors 6,000 N/A Company 12/21/68 to 1/1/10

#47, Flanigan's Options to 1/1/50

Enterprises, Inc. (3)

8600 Biscayne Blvd.

Miami, FL

Flaniganís Seafood 8,000 200 Limited 06/01/91 to 5/31/11

Bar and Grill #13, Partnership Options to 5/31/21

CIC Investors #13, Ltd.

11415 S. Dixie Highway

Pinecrest, FL

Flaniganís Seafood 4,000 200 Limited 10/24/06 to 10/23/11

Bar and Grill #50, Partnership Options to 10/23/26 CIC investors #50, Ltd.(8)

17185 Pines Boulevard

Pembroke Pines, FL

Flaniganís Seafood 5,900 200 Limited 1/5/07 to 12/31/21

Bar and Grill #55 Partnership Options to 12/31/31

CIC Investors #55, Ltd.(9)

2190 S. University Drive

Davie, Florida

Flanigan's Seafood 6,800 200 Limited 8/1/97 to 12/31/11

Bar and Grill #60 Partnership

CIC Investors #60 Ltd.

9516 Harding Avenue

Surfside, FL

Flaniganís Seafood 6,128 200 Limited 5/01/05 to 6/30/15

Bar and Grill #65 Partnership Options to 3/31/25

CIC Investors #65, Ltd.

2335 State Road 7,Suite 100

Wellington, FL

Flanigan's Seafood 4,850 161 Limited 4/1/00 to 3/31/10

Bar and Grill #70 Partnership Options to 3/31/30

CIC Investors #70 Ltd.

12790 SW 88 St

Kendall, FL

Flaniganís Seafood 7,000 200 Limited 10/1/03 to 9/30/09

Bar and Grill #75 Partnership Options to 9/30/27

CIC Investors # 75 Ltd.

950 S. Federal Highway

Stuart, FL

Square Franchised/

Name and Location Footage Seats Owned by Lease Terms

----------------- ------- ----- -------- -----------

Flanigan's Seafood 5,000 165 Limited 6/15/01 to 12/14/19

Bar and Grill #80 Partnership Options to 12/14/39

CIC Investors #80 Ltd.

8695 N.W. 12th St

Miami, FL

Flanigan's Seafood 5,700 235 Limited 7/29/01 to 7/28/17

Bar and Grill #95 Partnership Options to 7/28/32

CIC Investors #95 Ltd.

2460 Weston Road

Weston, FL

Mardi Gras 10,000 400 Company 4/30/06 to 4/30/16

Flaniganís Enterprises, Option to 4/30/26

Inc., #600 (4)(10)

Powers Ferry Landing

Atlanta, GA

(1) Franchised by Company.

(2) Lease assigned to franchisee.

(3) We own 52% of the underlying leasehold from the unaffiliated third parties to whom the lease had been assigned and subleased back.

(4) Location managed by an unaffiliated third party.

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

(6) Ground lease executed by us on September 25, 2001. We constructed a building of 4,120 square feet, 1,978 square feet is used by us for the operation of a package liquor store and the other 2,142 square feet is subleased as retail space. The package liquor store opened for business on November 17, 2003.

(7) During the fourth quarter of our fiscal year 2006, we purchased the real property and an assignment of a ground lease of this location pursuant to an option to purchase contained in the Sublease Agreement. During our fiscal year 2007, we purchased the real property subject to the ground lease.

(8) Restaurant opened for business on October 29, 2007.

(9) Restaurant opened for business on July 28, 2008.

(10) During the third quarter of our fiscal year 2006, our lease for this location expired. The unaffiliated third party entered into a new lease for the business premises effective May 1, 2006 and as of that date, we no longer have responsibility to pay any amounts under the lease.

(11) Effective March 4, 2007, we purchased the assets of the franchised restaurant from our franchisee, including the leasehold.

During our fiscal year 2007, we purchased the real property and building where our combination restaurant and package liquor store located at 4 North Federal Highway, Hallandale, Florida (Store #31) operates. We paid $552,500 for the real property, which was partially financed with an advance of $250,000 on the mortgage procured by us during the fourth quarter of our fiscal year 2006 to purchase the limited liability company which owns the real property and the ground lease at this location, thereby raising the principal balance on such mortgage to $3,530,000. The mortgage amount bears interest at the rate of seven and one-half (7‡%) percent per annum, is amortized over twenty years with equal monthly payments of principal and interest, each in the amount of $28,600, with the entire principal balance and all accrued interest due in October 2013.

During our fiscal year 2007, we purchased the real property located adjacent to the parking lot of our combination restaurant and package liquor store located at 4 North Federal Highway, Hallandale, Florida, (Store #31). A residence, consisting of approximately 1,200 square feet, is located upon the property and as of the end of our fiscal year 2008 is leased to an unaffiliated third party. We paid $600,000 for this property, $450,000 of which we borrowed from an unaffiliated third party first mortgagee. The mortgage amount bears interest at the rate of ten (10%) percent per annum, is amortized over thirty (30) years with equal monthly payments of principal and interest, each in the amount of $3,949, with the entire principal balance and all accrued interest due in April, 2017.

During the third quarter of our fiscal year 2007, we sold the real property located at 732 - 734 N.E. 125^th Street, North Miami, Florida (Store #27) and our rights under the liquor license for that location to the sublessee, an unaffiliated third party for $780,000. We purchased this real property during the first quarter of our fiscal year 2007 for a purchase price of $250,000 and realized a gain of $393,000 from the sale.

Item 3. Legal Proceedings.

--------------------------

From time to time, we are a defendant in litigation arising in the ordinary course of our business, including claims resulting from ìslip and fallî accidents, claims under federal and state laws governing access to public accommodations, employment-related claims and claims from guests alleging illness, injury or other food quality, health or operational concerns. To date, none of this litigation, some of which is covered by insurance, has had a material effect on us.

We own the building where our corporate offices are located. On April 16, 2001, we filed suit against the owner of the adjacent shopping center to determine our right to non-exclusive parking in the shopping center. During fiscal year 2007, the appellate court affirmed and upon re-hearing, again affirmed the granting of a summary judgment in favor of the shopping center. The seller from whom we purchased the building was named as a defendant in the lawsuit and is currently asserting a claim against us for reimbursement of its attorneys' fees and costs resulting from the litigation. We disputed the sellerís entitlement to reimbursement of its attorneyís fees and costs, but during the first quarter of our fiscal year 2009, the appellate court affirmed the ruling against us by the trial court. We are disputing the amount of the sellerís claim as excessive.

During fiscal year 2007, we and the limited partnership which owns the restaurant in Pinecrest, Florida filed suit against the limited partnership's landlord. We are the sole general partner and a 40% limited partner in this limited partnership. We are seeking to recover the cost of structural repairs to the business premises we paid, as we believe these structural repairs were the landlord's responsibility under the lease. The lawsuit, in addition to attempting to recover the amounts expended by us for structural repairs is also attempting to recover the rent paid by the limited partnership while the repairs were occurring. The claim also includes a request by the limited partnership for the court to determine if the limited partnership has the exclusive right to the use of the pylon sign in front of the business premises. The landlord filed its answer to the complaint denying liability for structural repairs to the business premises, denying any obligation to reimburse the limited partnership for any rent paid while structural repairs occurred and denying the limited partnership's right to use the pylon sign. The lawsuit is in the discovery stage.

Item 4. Submission of Matters to a Vote of Security Holders.

------------------------------------------------------------

None.

PART II

--------

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

-----------------------------------------------------------------------------

Our common stock is traded on the American Stock Exchange under the symbol ìBDLî. As of the close of business on December 22, 2008, there were approximately 335 holders of record of our common stock. The following table sets forth the high and low sales price of a share of our common stock for each quarter in our fiscal years 2008 and 2007 as reported by the American Stock Exchange:

Fiscal 2008 Fiscal 2007

----------- -----------

High Low High Low

---- --- ---- ---

First quarter 9.75 7.65 11.75 8.91

Second quarter 9.90 6.56 12.30 10.28

Third quarter 8.54 6.35 12.00 10.17

Fourth quarter 6.85 5.09 11.30 8.65

We have determined that we must retain any earnings for the development and operation of our business and accordingly, we do not intend to pay any cash dividends in the foreseeable future.

ISSUER PURCHASES OF EQUITY SECURITIES
Period	(a) Total Number of Shares (or Units) Purchased	(b) Average Price Paid per Share (or Unit)	(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
June 29, 2008 – August 2, 2008	none			92,600
August 3, 2008 – August 30, 2008	600	$6.60	600	92,000
August 31, 2008 – September 27, 2008	900	$6.1999	900	91,100
Total as of September 27, 2008	1,500		1,500	91,100

Purchase of Company Common Stock

--------------------------------

Pursuant to a discretionary plan approved by the Board of Directors at its meeting on May 17, 2007, the Board of Directors authorized management to purchase up to 100,000 shares of our common stock. During our fiscal year 2008, we purchased 6,400 shares of our common stock for an aggregate purchase price of $48,935. Of the shares purchased, we purchased 1,200 shares of our common stock from the Joseph G. Flanigan Charitable Trust for $9,600 and 2,500 shares of our common stock from an employee for $20,000 in off market transactions, which reflected an actual per share purchase price which was equal to the average per share market price on the date of purchase. The balance of our common stock purchased, 2,700 shares, was purchased on the open market for an aggregate purchase price of $19,335. During our fiscal year 2007, we purchased 3,332 shares of our common stock for an aggregate purchase price of $36,000. Of the shares purchased, 2,500 shares were purchased from August Bucci, our Chief Operating Officer and Director, in an off market private transaction, at an aggregate purchase price of $28,000, which reflected an actual per share purchase price which was less than the closing per share market price on the date of purchase. The balance of our common stock purchased, 832 shares, were purchased from a former employee, (332 shares), for $3,500, and from the Joseph G. Flanigan Charitable Trust, (500 shares), for $4,500 in off market transactions, which reflected an actual per share purchase price which was equal to the average per share market price on the date of purchase.

Information regarding our equity compensation plan(s) is set forth under page F-26 of this report.

Item 6. Selected Financial Data

-------------------------------

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 6.

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

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Except for the historical information contained herein, the following discussion contains forward-looking statements that are subject to known and unknown risks, uncertainties and other factors that may cause our actual results to differ materially from those expressed or implied by such forward-looking statements. We discuss such risks, uncertainties and other factors throughout this report and specifically under the captions ìRisk Factorsî. In addition, the following discussion and analysis should be read in conjunction with the 2008 Consolidated Financial Statements and the related Notes to Consolidated Financial Statements included elsewhere in this report.

Overview

---------

Financial Information Concerning Industry Segments

--------------------------------------------------

Our business is conducted principally in two segments: the restaurant segment and the package liquor store segment. Financial information broken into these two principal industry segments for the two fiscal years ended September 27, 2008 and September 29, 2007 is set forth in the consolidated financial statements which are attached hereto.

General

-------

Franchised Units. In exchange for our providing management and related services to our franchisees and granting them the right to use our service marks "Flanigan's Seafood Bar and Grill" and "Big Daddy's Liquors", our franchisees (five of which are franchised to members of the family of our Chairman of the Board, officers and/or directors), are required to (i) pay to us a royalty equal to 1% of gross package liquor sales and 3% of gross restaurant sales; and (ii) make advertising expenditures equal to between 1.5% to 3% of all gross sales based upon our actual advertising costs allocated between stores, prorata, based upon gross sales.

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. Accordingly, the results of operations of all limited partnership owned restaurants, except the Fort Lauderdale, Florida restaurant are consolidated with our results of operations for accounting purposes. The results of operations of the Fort Lauderdale, Florida restaurant are accounted for by us utilizing the equity method.

Results of Operations

---------------------

REVENUES (in thousands):

-----------------------------------------------------------------------------

Fifty Two Fifty Two Weeks Ended Weeks Ended

Sept. 27, 2008 Sept. 29, 2007

Sales

-----------------------------------------------------------------------------

Restaurant, food $40,906 65.2% $38,047 63.8%

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Restaurant, bar 9,494 15.1% 8,764 14.7%

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Package goods 12,317 19.7% 12,784 21.5%

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Total 62,717 100.0% 59,595 100.0%

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Franchise revenues 1,066 1,134

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Ownerís fee 238 203

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Other operating

income 188 169

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Total Revenues $64,209 $61,101

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Comparison of Fiscal Years Ended September 27, 2008 and September 29, 2007

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Revenues. Total revenue for our fiscal year 2008 increased $3,108,000 or 5.09% to $64,209,000 from $61,101,000 for our fiscal year 2007. This increase resulted from sales from three restaurant locations, the Davie, Florida limited partnership owned restaurant ($818,000) which opened for business on July 28, 2008, the Pembroke Pines, Florida limited partnership owned restaurant ($3,189,000) which opened for business on October 29, 2007, and the Company owned Lake Worth, Florida restaurant ($1,636,000), which was acquired on March 4, 2007, offset by a decline in same store restaurant food and bar sales ($1,872,000). Prior to March 4, 2007, the Lake Worth, Florida restaurant was franchised by the Company. The Lake Worth, Florida restaurant generated $1,018,000 of revenue during our fiscal year 2007. Without giving effect to the revenue generated from the Pembroke Pines, Florida restaurant ($3,189,000), the Davie, Florida restaurant ($818,000) and the increased revenue generated from the Lake Worth, Florida restaurant, ($619,000), total revenue for our fiscal year 2008 would have decreased $1,518,000 or 2.48% to $59,583,000 from $61,101,000 for our fiscal year 2007. To a lesser extent, increased revenue is attributable to increased menu prices.

Restaurant Food Sales. Restaurant revenue generated from the sale of food at restaurants totaled $40,906,000 for our fiscal year 2008 as compared to $38,047,000 for our fiscal year 2007. This increase in restaurant food sales is due to sales from the Davie, Florida, Pembroke Pines, Florida and Lake Worth, Florida restaurants. The Davie, Florida, Pembroke Pines, Florida and Lake Worth, Florida restaurants generated $662,000, $2,677,000 and $1,225,000 of revenues, respectively, from the sale of food during our fiscal year 2008, while the Lake Worth, Florida restaurant generated $769,000 of revenue from the sale of food during our fiscal year 2007. Without giving effect to the revenue generated from the Davie, Florida restaurant ($662,000) and the Pembroke Pines, Florida restaurant ($2,677,000) and the increased revenue generated from the Lake Worth, Florida restaurant, ($456,000), from the sale of food during our fiscal year 2008, restaurant revenue generated from the sale of food during our fiscal year 2008 would have decreased $936,000 or 2.46% to $37,111,000 from $38,047,000 for our fiscal year 2007. Comparable weekly restaurant food sales (for restaurants open for all of our fiscal years 2008 and 2007, which consists of six restaurants owned by us and seven restaurants owned by affiliated limited partnerships) was $682,000 and $716,000 for our fiscal years 2008 and 2007, respectively, a decrease of 4.75%. Comparable weekly restaurant food sales for Company owned restaurants only was $299,000 and $297,000 for our fiscal years 2008 and 2007, respectively, an increase of 0.67%. Comparable weekly restaurant food sales for affiliated limited partnership owned restaurants only was $383,000 and $419,000 for our fiscal years 2008 and 2007, respectively, a decrease of 8.59%. We anticipate that restaurant food sales will increase through our fiscal year 2009 due to, among other things, the operation of the Davie restaurant through our entire fiscal year 2009, offset by a decline in same store restaurant food sales.

Restaurant Bar Sales. Restaurant revenue generated from the sale of alcoholic beverages at restaurants totaled $9,494,000 for our fiscal year 2008 as compared to $8,764,000 for our fiscal year 2007. This increase of $730,000 in restaurant bar sales is due to sales from the Davie, Florida, Pembroke Pines, Florida and Lake Worth, Florida restaurants. The Davie, Florida, Pembroke Pines, Florida and Lake Worth, Florida restaurants generated $154,000, $511,000 and $288,000 of revenues, respectively, from restaurant bar sales during our fiscal year 2008, while the Lake Worth, Florida restaurant generated $172,000 of revenue from restaurant bar sales during our fiscal year 2007. Without giving effect to the revenue generated from the Davie, Florida restaurant ($154,000) and the Pembroke Pines, Florida restaurant ($511,000) and the increased revenue generated from the Lake Worth, Florida restaurant, ($116,000), from restaurant bar sales during our fiscal year 2008, revenue generated from restaurant bar sales during our fiscal year 2008 would have decreased $51,000 or 0.58% to $8,713,000 from $8,764,000 for our fiscal year 2007. Comparable weekly restaurant bar sales (for restaurants open for all of our fiscal years 2008 and 2007, which consists of six restaurants owned by us and seven restaurants owned by affiliated limited partnerships) was $164,000 and $166,000 for our fiscal years 2008 and 2007, respectively, a decrease of 1.20%. Comparable weekly restaurant bar sales for Company owned restaurants only was $68,000 and $66,000 for our fiscal years 2008 and 2007, respectively, an increase of 3.03%. Comparable weekly restaurant bar sales for affiliated limited partnership owned restaurants only was $96,000 and $100,000 for our fiscal years 2008 and 2007, respectively, a decrease of 4.00%. We anticipate that restaurant bar sales will increase through our fiscal year 2009 due to, among other things, the operation of the Davie restaurant through our entire fiscal year 2009, offset by a decline in same store restaurant bar sales.

Package Liquor Store Sales. Revenue generated from sales of liquor and related items at package liquor stores totaled $12,317,000 for our fiscal year 2008 as compared to $12,784,000 for our fiscal year 2007, a decrease of $467,000. The weekly average of same store package liquor store sales, which includes all nine (9) Company owned package liquor stores, was $237,000 for our fiscal year 2008 as compared to $246,000 for our fiscal year 2007, a decrease of 3.66%. The decrease was primarily due to increased competition and package liquor store sales are expected to decline through our fiscal year 2009.

Operating Costs and Expenses. Operating costs and expenses, (consisting of cost of merchandise sold, payroll and related costs, occupancy costs and selling, general and administrative expenses), for our fiscal year 2008 increased $3,208,000 or 5.44% to $62,209,000 from $59,001,000 for our fiscal year 2007. The increase was primarily due to pre-opening expenses related to and the operation of the Davie, Florida restaurant and the operation of the Pembroke Pines, Florida and Lake Worth, Florida restaurants and to a lesser extent a general increase in food costs, offset by the decreased cost of package goods associated with the decline in our package store sales, a decrease in the cost of ribs, a decrease in repairs and maintenance to our units and actions taken by management to reduce and/or control costs and expenses. We anticipate that our operating costs and expenses will continue to increase through our fiscal year 2009 due to, among other things, the operation of the Pembroke Pines, Florida and Davie, Florida restaurants for our entire fiscal year 2009 and an expected general increase in food costs, including an increase in the cost of ribs. Operating costs and expenses increased slightly as a percentage of total sales to approximately 96.89% in our fiscal year 2008 from 96.56% in our fiscal year 2007.

Gross Profit. Gross profit is calculated by subtracting the cost of merchandise sold from sales.

Restaurant Food and Bar Sales. Gross profit for food and bar sales for our fiscal year 2008 increased to $33,368,000 from $30,653,000 for our fiscal year 2007. 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 66.21% for our fiscal year 2008 and 65.48% for our fiscal year 2007. This increase in gross profit for restaurant and bar sales for our fiscal year 2008 was primarily due to menu price increases instituted at the end of the first quarter of our fiscal year 2008 and a decrease in the cost of ribs during calendar year 2008.

Package Liquor Store Sales. Gross profit for package liquor store sales for our fiscal year 2008 increased to $3,661,000 from $3,584,000 for our fiscal year 2007, notwithstanding a decrease in our package store sales. Our gross profit margin (calculated as gross profit reflected as a percentage of package liquor store sales) for package liquor store sales was 29.72% for our fiscal year 2008 and 28.04% for our fiscal year 2007. The increase in our gross profit margin, (1.68%), was primarily due to the purchase of "close out" and inventory reduction merchandise from wholesalers. We anticipate the gross profit margin for package liquor store sales to remain constant throughout our fiscal year 2009.

Payroll and Related Costs. Payroll and related costs for our fiscal year 2008 increased $1,772,000 or 10.25% to $19,065,000 from $17,293,000 for our fiscal year 2007. This increase was primarily due to the operation of the Pembroke Pines, Florida, Davie, Florida and Lake Worth, Florida restaurants. We anticipate that our payroll and related costs will increase through our fiscal year 2009 due to, among other things, the operation of the Davie, Florida restaurant for our entire fiscal year 2009. Payroll and related costs as a percentage of total sales was 29.69% in our fiscal year 2008 and 28.30% of total sales in our fiscal year 2007. This increase as a percentage of sales was primarily due to the need to pay higher wages to attract and retain employees.

Occupancy Costs. Occupancy costs (consisting of rent, common area maintenance, repairs, real property taxes and amortization of leasehold purchases) for our fiscal year 2008 increased $110,000 or 2.84% to $3,977,000 from $3,867,000 for our fiscal year 2007. This increase is due to, (i) rental payments for our entire fiscal year 2008 at three additional restaurant locations (Pembroke Pines, Florida, - $175,000, Davie, Florida - $246,000, and Lake Worth, Florida - $98,000)= $519,000, as compared to rental payments for a part of our fiscal year 2007 at the same three additional restaurant locations, (Pembroke Pines, Florida - $18,000 (non-cash pre-opening rent) and $125,000 (cash pre-opening rent), Davie, Florida - $138,000 and Lake Worth, Florida - $61,000)= $342,000; and (ii) increases in real property taxes and common area maintenance, which generally includes a pro-rata share of property insurance for units located within shopping centers, offset by a general decrease in repairs and maintenance. We anticipate that our occupancy costs will stabilize through our fiscal year 2009 with no rental payments for additional restaurant locations being developed by the Company.

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 2008 increased $996,000 or 7.98% to $13,479,000 from $12,483,000 for our fiscal year 2007. Selling, general and administrative expenses increased as a percentage of total sales in our fiscal year 2008 to approximately 20.99% as compared to 20.43% in our fiscal year 2007. This increase is due primarily to the operation of the Pembroke Pines, Florida, Davie, Florida and Lake Worth, Florida restaurants and an overall increase in expenses. We anticipate that our selling, general and administrative expenses will increase throughout our fiscal year 2009 due to, among other things, the operation of our Pembroke Pines, Florida and Davie, Florida restaurants for our entire fiscal year 2009 and an overall increase in expenses, which will not be offset in their entirety by increased advertising credits and rebates from our food distributor.

Depreciation. Depreciation for our fiscal year 2008 increased $182,000 or 9.34% to $2,131,000 from $1,949,000 for our fiscal year 2007. As a percentage of total sales, depreciation expense was relatively constant over both periods, representing 3.32% of revenue for our fiscal year 2008 and 3.19% of revenue for our fiscal year 2007.

Other Income and Expense. Other income and expenses was an expense of $392,000 for our fiscal year 2008 as compared to an expense of $35,000 for our fiscal year 2007. Other income and expense for our fiscal year 2007 includes a gain of $393,000 from the sale of real property. Other income and expense for our fiscal year 2008 includes interest expense of $495,000, as compared to interest expense of $508,000 for our fiscal year 2007. The decrease in interest expense is attributable to a lower variable interest rate on our line of credit during our fiscal year 2008.

Interest Expense, Net. Interest expense for our fiscal year 2008 decreased $13,000 to $495,000 from $508,000 for our fiscal year 2007. This decrease is attributable to a lower variable interest rate on our line of credit during our fiscal year 2008.

Net Income. Net income for our fiscal year 2008 decreased $210,000 or 16.57% to $1,057,000 from $1,267,000 for our fiscal year 2007. As a percentage of sales, net income for our fiscal year 2008 is 1.65%, as compared to 2.07% in our fiscal year 2007. Our net income during our fiscal year 2007 includes a gain of $393,000 from the sale of real property, offset by our share of the pre-opening expenses associated with the Pembroke Pines, Florida restaurant, ($341,000), and the Davie, Florida restaurant, ($174,000), which adversely affected net income. Without giving effect to the sale of the real property, we would have generated net income of $1,007,000 for our fiscal year 2007, which as a percentage of sales is 1.65%. Without giving effect to the sale of the real property for our fiscal year 2007, net income for our fiscal year 2008, as a percentage of sales, was equal to that for our fiscal year 2007 primarily due to higher gross profit in both our restaurant and package liquor store divisions, improved control over expenses, offset by our share of the pre-opening expenses associated with the Davie, Florida restaurant, ($632,000).

New Limited Partnership Restaurants

-----------------------------------

The limited partnership owned restaurant located in Pembroke Pines, Florida opened for business during the first quarter of our fiscal year 2008 (October 29, 2007) and the limited partnership owned restaurant located in Davie, Florida opened for business during the fourth quarter of our fiscal year 2008 (July 28, 2008). As new restaurants open, our income from operations will be adversely affected due to our obligation to fund pre-opening costs, including but not limited to pre-opening rent for the new locations. During our fiscal year 2008, we recognized non-cash pre-opening rent in the approximate amount of $6,000 and recognized cash pre-opening rent in the approximate amount of $12,000 for the Pembroke Pines, Florida restaurant. During our fiscal year 2008, we also paid and expensed pre-opening rent in the approximate amount of $246,000 for the Davie, Florida restaurant, which is the full rent provided in the lease. During our fiscal year 2007, we recognized non-cash pre-opening rent in the approximate amount of $18,000 and recognized cash pre-opening rent in the approximate amount of $119,000 for the Pembroke Pines, Florida restaurant and pre-opening rent in the approximate amount of $104,000 for the Davie, Florida restaurant, which is the full rent provided in the lease. We are recognizing rent expense on a straight line basis over the term of the lease.

During our fiscal year 2008, the limited partnership restaurant in Davie, Florida reported losses of $632,000 primarily due to pre-opening costs, thus contributing to a reduction in the operating income for our fiscal year 2008. During our fiscal year 2007, the limited partnership restaurants in Pembroke Pines, Florida and Davie, Florida reported losses of $341,000 and $174,000, respectively, primarily due to pre-opening costs, thus contributing to a reduction in operating income for our fiscal year 2007.

Until we find a new restaurant location, our income from operations will not be adversely affected by pre-opening costs. During our fiscal year 2009, we do not expect our income from operations to be materially adversely affected by pre-opening costs for new restaurant locations. Management believes that the Companyís current cash availability from its line of credit and expected cash from operations will be sufficient to fund operations and capital expenditures for at least the next twelve months.

Trends

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During the next twelve months, we expect continued increases in aggregate restaurant sales as compared to prior periods due primarily to the restaurant in Davie, Florida being open for the entire twelve month period. We expect same store restaurant food and bar sales to decline over the next twelve month period due primarily to the current domestic and global financial crisis. We expect package liquor store sales to decrease due primarily to increased competition. We expect higher food costs and higher overall expenses, which will adversely affect our net income. In December, 2007, we raised menu prices to offset the higher food costs and overall expenses. We plan to limit menu price increases as long as possible while maintaining our high quality of food and service and without reducing our food portions. We have increased our advertising to attract customers. As a last resort, we will raise menu prices whenever necessary and wherever competitively possible.

We continue to search for new locations to open restaurants and thereby expand our business, but we are now looking for locations that will not require an extensive and costly renovation. Any new locations will likely be opened using our limited partnership ownership model.

We are not actively searching for locations for the operation of new package liquor stores, but if an appropriate location for a package liquor store becomes available, we will consider it.

Liquidity and Capital Resources

-------------------------------

We fund our operations through cash from operations and borrowings from our line of credit. As of September 27, 2008, we had cash of approximately $3,244,000, an increase of $1,021,000 from our cash balance of $2,223,000 as of September 29, 2007. The increase in cash as of September 27, 2008 was primarily from our operations due to minimal demand upon our cash flow for extraordinary items.

Cash Flows

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Fiscal Years

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2008 2007

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(in thousands)

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Net cash and cash equivalents

provided by operating activities $3,747 $2,138

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Net cash and cash equivalents

used in investing activities (3,967) (2,761)

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Net cash and cash equivalents

provided by financing activities 1,241 1,148

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Net increase

in cash and equivalents 1,021 525

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Cash and equivalents,

beginning of year 2,223 1,698 -----------------------------------------------------------------------------

Cash and equivalents,

end of year $3,244 $2,223

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Capital Expenditures

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In addition to using cash for our operating expenses, we use cash to fund the development and construction of new restaurants and secondarily to fund capitalized property improvement for our existing restaurants. We acquired property and equipment of $4,337,000, (of which $26,000 was financed and $593,000 of which was purchase deposits transferred to property and equipment), during our fiscal year 2008, including $358,000 for renovations to one (1) existing Company owned restaurant, as compared to $4,886,000 (of which $700,000 was financed) during our fiscal year 2007, which included $1,402,500 for the purchase of real property and $615,000 for renovations to three (3) existing Company owned restaurants. The additions to fixed assets during our fiscal year 2008 included most of the renovations to the business premises of the Davie, Florida restaurant, while the additions to fixed assets during our fiscal year 2007 included most of the renovations to the business premises of the Pembroke Pines, Florida restaurant and the purchase of leasehold interests of our Lake Worth, Florida, Pembroke Pines, Florida and Davie, Florida restaurants.

In addition, during our fiscal year 2008, we purchased a 4% interest in the underlying lease which we sublease for our El Portal, Florida location, ($27,000), from an unrelated sublessor, the cost of which is being amortized as additional rent over the life of the lease, including the first ten (10) year renewal option. During our fiscal year 2007, we purchased leasehold interests for the Pembroke Pines, Florida ($305,000), Davie, Florida ($650,000) and Lake Worth, Florida ($45,000) locations, the cost of which is being amortized as additional rent over the life of the lease. The purchase of the leasehold interest for the Lake Worth, Florida location occurred as a part of the purchase of the franchise restaurant.

All of our owned units require periodic refurbishing in order to remain competitive. The cost of this refurbishment in our fiscal year 2008 was $358,000. We anticipate the cost of this refurbishment in our fiscal year 2009 will be approximately $700,000, which funds will be provided from operations.

Long Term Debt

--------------

As of the end of our fiscal year 2008, we had long term debt, (including our line of credit), of $6,514,000, as compared to $6,080,000 as of the end of our fiscal year 2007.

As of the end of our fiscal year 2008, the amount outstanding under our line of credit from an unaffiliated financial institution was $1,562,000. Subsequent to the end of our fiscal year 2008, we changed our primary banking relationship to another unaffiliated financial institution, which includes a new line of credit of $2,500,000. The outstanding balance on our line of credit of $1,586,000 as of November 30, 2008, bears interest at BBA LIBOR 1 month rate, plus 2.25%, (4.20625% as December 7, 2008), with monthly payments of interest only and the unpaid principal balance and all accrued interest due in full on October 7, 2009. We granted our lender a security interest in substantially all of our assets and a second mortgage on our corporate offices as collateral to secure our repayment obligations under our credit line.

We repaid long term debt, including auto loans, mortgages and capital lease obligations in the amount of $192,000 and $213,000 in our fiscal years 2008 and 2007, respectively.

We repaid our line of credit in the amount of $-0- and $1,000,000 in our fiscal years 2008 and 2007 respectively. During our fiscal year 2008, we borrowed $600,000 on our line of credit to pay the balance of the purchase price for our limited partnership units in the limited partnership which owns the Davie, Florida location. During our fiscal year 2007, we borrowed $1,200,000 on our line of credit, primarily to advance the purchase price for the limited partnership which owns the Pembroke Pines, Florida restaurant to close on the purchase of its restaurant location ($340,000) and the limited partnership which owns the Davie, Florida restaurant to close on the purchase of its restaurant location ($650,000).

Purchase Commitments

--------------------

In order to fix the cost and ensure adequate supply of baby back ribs for our restaurants, on November 26, 2008, we entered into a purchase agreement with our rib supplier, whereby we agreed to purchase approximately $3,800,000 of baby back ribs during calendar year 2009 from this vendor at a fixed cost. While we anticipate purchasing all of our rib supply from this vendor, we believe there are several other alternative vendors available, if needed.

Purchase of Limited Partnership Interests

-----------------------------------------

During our fiscal year 2008, we purchased from two separate limited partners (neither of whom are officers, directors or family members of officers or directors) limited partnership interests of varying amounts (0.13% to 2.67%) in nine (9) limited partnerships which own restaurants for an aggregate purchase price of $125,000.

Working capital

---------------

The table below summarizes our current assets, current liabilities and

working capital for our fiscal years 2008 and 2007:

	Sept. 27	Sept. 29
(in thousands)	2008	2007

Current assets	$6,852	$6,322

Current liabilities	4,504	4,567

Working capital