PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In Thousands Except Per Share Amounts)

	Thirteen Weeks Ended		Thirty Nine Weeks Ended
	June 28, 2008	June 30, 2007	June 28, 2008	June 30, 2007

REVENUES:
Restaurant food sales	$10,182	$9,773	$30,714	$28,832
Restaurant bar sales	2,346	2,206	7,117	6,642
Package store sales	2,842	3,037	9,673	10,050
Franchise related revenues	273	279	815	887
Ownerís fee	68	71	183	151
Other operating income	54	41	150	134
	15,765	15,407	48,652	46,696

COSTS AND EXPENSES:
Cost of merchandise sold:
Restaurant and lounges	4,197	4,211	12,670	12,206
Package goods	1,994	2,174	6,855	7,237
Payroll and related costs	4,645	4,494	14,363	13,098
Occupancy costs	989	1,099	2,969	2,863
Selling, general and administrative expenses	3,289	3,141	9,994	9,482
	15,114	15,119	46,851	44,886
Income from Operations	651	288	1,801	1,810

OTHER INCOME (EXPENSE):
Interest expense	(117)	(129)	(358)	(387)
Interest and other income	34	40	71	110
Gain on sale of property and equipment	_ --	393	--	393
	(83)	304	(287)	116

Income before Provision for Income Taxes and Minority Interest in (Earnings) Losses of Consolidated Limited Partnerships	568	592	1,514	1,926

Provision for Income Taxes	(138)	(236)	(487)	(603)

Minority Interest in (Earnings) Losses of Consolidated Limited Partnerships	(94)	71	(36)	(240)

NET INCOME	$ 336	$ 427	$ 991	$ 1,083

FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In Thousands Except Per Share Amounts)

(Continued)

	Thirteen Weeks Ended			Thirty Nine Weeks Ended
	June 28, 2008	June 30, 2007		June 28, 2008	June 30, 2007

Net Income Per Common Share:
Basic	$0.18		$0.23	$0.52		$0.57
Diluted	$0.18		$0.22	$0.52		$0.57

Weighted Average Shares and Equivalent Shares Outstanding
Basic	1,886,077		1,892,891	1,888,523		1,888,336
Diluted	1,895,378	1,914,986		1,899,515	1,910,119

See accompanying notes to unaudited condensed consolidated financial statements.

FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

JUNE 28, 2008 (UNAUDITED) AND SEPTEMBER 29, 2007

(In Thousands)

ASSETS

	June 28, 2008	September 29, 2007

CURRENT ASSETS:

Cash and cash equivalents	$3,464	$2,223
Notes and mortgages receivables, current maturities, net	16	14
Prepaid income taxes	100	--
Due from franchisees	237	735
Other receivables	159	137
Inventories	2,237	2,165
Prepaid expenses	579	840
Deferred tax asset	210	208

Total Current Assets	7,002	6,322

Property and Equipment, Net	20,718	19,410

Investment in Limited Partnership	155	142

OTHER ASSETS:

Liquor licenses, net	345	347
Notes and mortgages receivable, net	32	44
Deferred tax asset	634	492
Leasehold purchases	1,938	2,085
Other	1,632	1,495

Total Other Assets	4,581	4,463

Total Assets	$ 32,456	$ 30,337

FLANIGAN'S ENTERPRISES, INC, AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

JUNE 28, 2008 (UNAUDITED) AND SEPTEMBER 29, 2007

(In Thousands)

(Continued)

LIABILITIES AND STOCKHOLDERSí EQUITY

	June 28, 2008	September 29, 2007

CURRENT LIABILITIES:

Accounts payable and accrued expenses	$3,501	$3,666
Income taxes payable	--	331
Due to franchisees	339	312
Current portion of long term debt	185	196
Deferred revenues	37	45
Deferred rent	18	17

Total Current Liabilities	4,080	4,567

Long Term Debt, Net of Current Maturities	4,811	4,922
Line of Credit	1,562	962

Deferred Rent, Net of Current Portion	218	232

Minority Interest in Equity of Consolidated Limited Partnerships	8,750	7,570

Commitments, Contingencies and Subsequent Events

Stockholdersí Equity:
Common stock, $.10 par value, 5,000,000 shares authorized; 4,197,642 shares issued	420	420
Capital in excess of par value	6,240	6,240
Retained earnings	12,322	11,331
Treasury stock, at cost, 2,311,809 shares at June 28, 2008 and 2,306,909 shares at September 29, 2007	(5,947)	(5,907)

Total Stockholdersí Equity	13,035	12,084

Total Liabilities and Stockholdersí Equity	$ 32,456	$ 30,337

See accompanying notes to unaudited condensed consolidated financial statements.

FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THIRTY-NINE WEEKS ENDED JUNE 28, 2008 AND JUNE 30, 2007

(In Thousands)

	June 28, 2008	June 30, 2007

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income	$991	$1,083
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	1,518	1,395
Amortization of leasehold purchases	174	149
Gain on sale of property and equipment	--	(393)
Loss on abandonment of property and equipment	15	26
Deferred income tax	(144)	6
Deferred rent	(13)	16
Minority interest in earnings of consolidated limited partnerships	36	240
Income from unconsolidated limited partnership	(22)	(5)
Recognition of deferred revenue	(8)	(7)
Changes in operating assets and liabilities: (increase) decrease in
Due from franchisees	498	255
Other receivables	(22)	167
Prepaid income taxes	(100)	--
Inventories	(72)	13
Prepaid expenses	261	(243)
Other assets	(137)	(355)
Increase (decrease) in:
Accounts payable and accrued expenses	(165)	(50)
Income taxes payable	(331)	(150)
Due to franchisees	27	152
Net cash provided by operating activities	2,506	2,299

CASH FLOWS FROM INVESTING ACTIVITIES:

Collection on notes and mortgages receivable	10	8
Purchase of property and equipment	(2,916)	(2,417)
Purchase of leasehold interests	(27)	(955)
Purchase of assets of franchised restaurant	--	(100)
Proceeds from sale of fixed assets	101	862
Proceeds from sale of marketable securities	--	381
Distributions from unconsolidated limited Partnerships	9	9
Proceeds from insurance settlement	--	112
Net cash used in investing activities	(2,823)	(2,100)

FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THIRTY-NINE WEEKS ENDED JUNE 28, 2008 AND JUNE 30, 2007

(In Thousands)

(Continued)

	June 28, 2008	June 30, 2007

CASH FLOWS FROM FINANCING ACTIVITIES:

Payment of long term debt	(148)	(157)
Payment of line of credit	--	(1,000)
Proceeds from long term debt	--	172
Proceeds from line of credit	600	1,200
Purchase of treasury stock	(40)	(36)
Purchase of minority limited partnership interest	(120)	--
Distributions to limited partnership minority partners	(759)	(777)
Proceeds from limited partnership interests	2,025*	1,970**
Proceeds from exercise of stock options	--	61

Net cash provided by financing activities	1,558	1,433


Net Increase in Cash and Cash Equivalents	1,241	1,632

Beginning of Period	2,223	1,698

End of Period	$ 3,464	$ 3,330

Supplemental Disclosure for Cash Flow Information: Cash paid during period for:
Interest	$358	$387
Income taxes	$1,061	$747

Supplemental Disclosure of Non-Cash Investing and Financing Activities:
Purchase of real property in exchange for debt	--	$700
Purchase of vehicle in exchange for debt	$26	--

* exclusive of the Companyís investment in the limited partnership owning the restaurant in Davie, Florida

of $1,850,000.

**exclusive of the Companyís investment in the limited partnership owning the restaurant in Pembroke

Pines, Florida of $380,000.

See accompanying notes to unaudited condensed consolidated financial statements

FLANIGANíS ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 28, 2008

(1) BASIS OF PRESENTATION:

The accompanying financial information for the periods ended June 28, 2008 and June 30, 2007 are unaudited. Financial information as of September 29, 2007 has been derived from the audited financial statements of the Company, but does not include all disclosures required by generally accepted accounting principles. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the financial information for the periods indicated have been included. For further information regarding the Company's accounting policies, refer to the Consolidated Financial Statements and related notes included in the Company's Annual Report on Form 10-K for the year ended September 29, 2007. Operating results for interim periods are not necessarily indicative of results to be expected for a full year.

These financial statements include estimates relating to performance based officersí bonuses. The estimates are reviewed periodically and the effects of any revisions are reflected in the financial statements in the period they are determined to be necessary. Although these estimates are based on managementís knowledge of current events and actions it may take in the future, they may ultimately differ from actual results.

(2) EARNINGS PER SHARE:

Statements of Financial Accounting Standards ("SFAS") No. 128, Earnings per share establishes standards for computing and presenting earnings per share ("EPS"). This statement requires the presentation of basic and diluted EPS. The data on Page 3 shows the amounts used in computing earnings per share and the effects on income and the weighted average number of shares of potentially dilutive common stock equivalents.

(3) RECLASSIFICATION:

Certain amounts in the fiscal year 2007 financial statements have been reclassified to conform to the fiscal year 2008 presentation.

(4) RECENT ACCOUNTING PRONOUNCEMENTS:

In March 2008, the FASB issued SFAS No. 161 ìDisclosures about Derivative Instruments and Hedging Activitiesî (ìSFAS 161î) to enhance disclosures about an entityís derivative and hedging activities. SFAS 161 is effective for all financial statements issued in fiscal years and interim periods beginning after November 15, 2008 and early application is encouraged. SFAS 161 also encourages but does not require comparative disclosures for earlier periods at initial adoption. As we do not currently engage in derivative transactions or hedging activities, we do not anticipate any significant financial statement disclosure impact as a result of our evaluation of SFAS 161.

In December 2007, the FASB issued SFAS No. 141 (revised 2007), ìBusiness Combinationsî (ìSFAS 141Rî). SFAS 141R establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any noncontrolling interest in the acquiree and the goodwill acquired. SFAS 141R also establishes disclosure requirements to enable the evaluation of the nature and financial effects of the business combination. SFAS 141R is effective for the fiscal years beginning after December 15, 2008 and will be adopted by us for any acquisitions after September 27, 2009.

In December 2007, the FASB issued Statement of Financial Accounting Standard No. 160, Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51 (ìSFAS 160î). SFAS 160 will change the accounting and reporting for minority interests, which will be recharacterized as noncontrolling interests (NCI) and classified as a component of equity. This new consolidation method will significantly change the accounting for transactions with minority interest holders. SFAS 160 is effective for fiscal years beginning after December 15, 2008 (our fiscal year 2010). We have not yet determined the impact, if any, of SFAS 160 on our consolidated financial statements.

In February 2007, the FASB issued SFAS 159, ìFair Value Option for Financial Assets and Liabilitiesî (ìSFAS 159î), which permits an entity to choose to measure many financial instruments and certain other items at fair value. The standard contains an amendment to SFAS 115 pertaining to available-for-sale and trading securities. The objective of the standard is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. The provisions of SFAS 159 are effective for financial statements issued for fiscal years beginning after November 15, 2007. We do not expect the adoption of Statement 159 at the beginning of fiscal year 2009 to have a material impact.

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, ìFair Value Measurementsî (ìSFAS 157î). SFAS 157 provides a common definition of fair value and establishes a framework to make the measurement of fair value in generally accepted accounting principles more consistent and comparable. SFAS 157 also requires expanded disclosures to provide information about the extent to which fair value is used to measure assets and liabilities, the methods and assumptions used to measure fair value and the effect of fair value measures on earnings. SFAS 157 is effective for fiscal years beginning after November 15, 2007 (our fiscal year 2009), although early adoption is permitted. In September 2007, the FASB provided a one-year deferral for the implementation of SFAS 157 only with regard to nonfinancial assets and liabilities. We have not yet determined the impact, if any, of SFAS 157 on our consolidated financial statements.

(5) INVESTMENT IN LIMITED PARTNERSHIPS:

Davie, Florida

We are the sole general partner and a 48% limited partner in this limited partnership which owns a restaurant in Davie, Florida which commenced operating under our ìFlaniganís Seafood Bar and Grillî service mark on July 28, 2008. 9.5% of the remaining limited partnership interest is owned by persons who are either our officers, directors or their family members. As of June 28, 2008 we still held $696,000 in funds from the private offering by this limited partnership, which are sufficient funds to complete the renovations and upgrades to the Davie, Florida restaurant and provide working capital.

(6) INVESTMENT IN LEASEHOLD INTEREST:

El Portal, Florida

During the third quarter of fiscal year 2008, we purchased a four (4%) percent interest, as lessee, in the Ninety Nine Year Ground Lease, and a four (4%) percent interest, as sublessor, in the Sublease Agreement by which we sublease the real property and improvements for our package liquor store and warehouse located at 8600 Biscayne Boulevard, El Portal, Miami-Dade County, Florida, (Store #47) for $27,000. With this purchase, we increased our ownership interest in the Ninety-Nine Year Ground Lease and the Sublease Agreement to fifty two (52%) percent.

(7) LINE OF CREDIT:

Under a secured line of credit with a third party financial institution we are able to borrow up to $2,600,000. As of June 28, 2008, the amount outstanding under the line of credit was $1,562,000, with a remaining availability of $1,038,000. During the third quarter of fiscal year 2008, we made no draws on our line of credit and paid monthly installments of interest payments, with no principal payments. During the fourth quarter of fiscal year 2008, we extended the maturity date of our secured line of credit from April 2, 2009 to July 2, 2009.

(8) INCOME TAXES:

Financial Accounting Standards Board Statement No. 109, Accounting for Income Taxes, requires among other things, recognition of future tax benefits measured at enacted rates attributable to deductible temporary differences between financial statement and income tax basis of assets and liabilities and to tax net operating loss carryforwards and tax credits to the extent that realization of said tax benefits is more likely than not.

(9) STOCK OPTION PLANS:

We have two stock option plans under which qualified stock options may be granted to our officers and other employees. Under these plans, the exercise price for the qualified stock options must be at least 110% of the fair market value of the Companyís Common Stock on the date the options are granted. In general, options granted under our stock option plans expire after a five (5) year period and generally vest no later than one (1) year from the date of grant. As of June 28, 2008, options to acquire 49,350 shares were outstanding at an average exercise price of $6.31 per share. Under the plans, options to acquire an aggregate of 45,000 shares are available for grant.

No stock options were granted during the thirty nine weeks ended June 28, 2008, nor were stock options granted during the thirty nine weeks ended June 30, 2007.

There were no stock option exercises during the thirty nine weeks ended June 28, 2008. Stock option exercises during the thirty nine weeks ended June 30, 2007 resulted in cash inflow to the Company of $61,000. The corresponding intrinsic value as of the exercise date of the 9,510 stock options exercised during the thirty nine weeks ended June 30, 2007 was $45,000.

Stock option activity during the thirty nine weeks ended June 28, 2008 was as follows:

	Total Options	Weighted Average Exercise Price
Outstanding at September 29, 2007	50,300	$6.31

Granted	--	--
Exercised	--	--
Expired	950	$6.14

Outstanding at June 28, 2008	49,350	$6.31

Options exercisable at June 28, 2008	49,350	$6.31

The weighted-average remaining contractual terms of stock options outstanding and stock options exercisable at June 28, 2008 was approximately 0.76 year. The aggregate intrinsic value of options outstanding and stock options exercisable at June 28, 2008 was approximately $2,000.

(10) ACQUISITIONS:

Purchase of Company Common Stock

Pursuant to a discretionary plan approved by the Board of Directors at its meeting on May 17, 2007, during the third quarter ended June 28, 2008, we purchased 2,700 shares of our common stock for an aggregate amount of $21,536. Of the shares purchased, we purchased 200 shares of our common stock on the open market for an aggregate purchase price of $1,536 and 2,500 shares of our common stock from an employee for a purchase price of $20,000. During the thirty nine weeks ended June 28, 2008, we purchased 4,900 shares of our common stock for an aggregate purchase price of $39,340. Of the shares purchased, we purchased 1,200 shares of our common stock on the open market for an aggregate purchase price of $9,740, 2,500 shares of our common stock from an employee for $20,000 and 1,200 shares of our common stock from the Joseph G. Flanigan Charitable Trust for a purchase price of $9,600.

Purchase of Limited Partnership Interests

During the thirty nine weeks ended June 28, 2008, we purchased from a limited partner (not a family member of any of our directors or officers) limited partnership interests of 0.76% to 2.76% in certain of our limited partnerships for $120,000.

(11) COMMITMENTS AND CONTINGENCIES:

Guarantees

We guarantee various leases for franchisees, limited partnerships that own restaurants and locations sold in prior years. Remaining rental commitments required under these leases are approximately $2,510,000. In the event of a default under any of these agreements, we will have the right to repossess the premises and operate the business to recover amounts paid under the guarantee either by liquidating assets or operating the business.

Litigation

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 attorneysí fees and costs resulting from the litigation. We dispute the sellerís entitlement to reimbursement of its attorneyís fees and costs and are appealing the ruling against us by the trial court. We are also 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 partnershipís 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 landlordís 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 a pylon sign which was formerly in front of the business premises before being removed by the landlord and to require the landlord to re-construct the same, at its cost. 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 partnershipís right to use the pylon sign which it removed. The lawsuit is in the discovery stage.

(12) BUSINESS SEGMENTS:

We operate principally in two reportable segments – package stores and restaurants. The operation of package stores consists of retail liquor sales and related items. Information concerning the revenues and operating income for the thirteen weeks and thirty nine weeks ended June 28, 2008 and June 30, 2007, and identifiable assets for the two reportable segments in which we operate, are shown in the following table. Operating income is total revenue less cost of merchandise sold and operating expenses relative to each segment. In computing operating income, none of the following items have been included: interest expense, other non-operating income and expense and income taxes. Identifiable assets by segment are those assets that are used in our operations in each segment. Corporate assets are principally cash, notes and mortgages receivable, real property, improvements, furniture, equipment and vehicles. We do not have any operations outside of the United States and transactions between restaurants and package liquor stores are not material.

	Thirteen Weeks Ending June 28, 2008	Thirteen Weeks Ending June 30, 2007
Operating Revenues:
Restaurants	$12,528	$11,979
Package stores	2,842	3,037
Other revenues	395	391
Total operating revenues	$15,765	$15,407

Operating Income Reconciled to Income Before Income Taxes and Minority Interests in Earnings of Consolidated Limited Partnerships
Restaurants	$1,076	$310
Package stores	77	116
	1,153	426
Corporate expenses, net of other Revenues	(502)	(138)
Operating income	651	288
Other income (expense)	(83)	304
Income Before Income Taxes and Minority Interests in Earnings of Consolidated Limited Partnerships	$568	$592

Depreciation and Amortization:
Restaurants	$427	$378
Package stores	57	57
	484	435
Corporate	67	69
Total Depreciation and Amortization	$551	$504

Capital Expenditures:
Restaurants	$878	$398
Package stores	19	61
	897	459
Corporate	115	671
Total Capital Expenditures	$1,012	$1,130
	Thirty Nine Weeks Ending June 28, 2008	Thirty Nine Weeks Ending June 30, 2007
Operating Revenues:
Restaurants	$37,831	$35,474
Package stores	9,673	10,050
Other revenues	1,148	1,172
Total operating revenues	$48,652	$46,696

Operating Income Reconciled to Income Before Income Taxes and Minority Interests in Earnings of Consolidated Limited Partnerships
Restaurants	$3,058	$2,482
Package stores	418	498
	3,476	2,980
Corporate expenses, net of other Revenues	(1,675)	(1,170)
Operating income	1,801	1,810
Other income (expense)	(287)	116
Income Before Income Taxes and Minority Interests in Earnings of Consolidated Limited Partnerships	$1,514	$1,926

Depreciation and Amortization:
Restaurants	$1,288	$1,149
Package stores	189	180
	1,477	1,329
Corporate	215	215
Total Depreciation and Amortization	$1,692	$1,544

Capital Expenditures:
Restaurants	$2,536	$2,852*
Package stores	155	261
	2,691	3,113
Corporate	278	1,059
Total Capital Expenditures	$2,969	$4,172*
*includes $56,000 in assets from purchase of franchised restaurant

	June 28,	September 29,
	2008	2007
Identifiable Assets:
Restaurants	$19,365	$18,202
Package store	3,719	3,577
	23,084	21,779
Corporate	9,372**	8,558
Consolidated Totals	$32,456	$30,337
**includes $696,000 as the balance raised through the private offering by the limited partnership which owns the Davie, Florida location.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Reported financial results may not be indicative of the financial results of future periods. All non-historical information contained in the following discussion constitutes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Words such as ìanticipates, appears, expects, trends, intends, hopes, plans, believes, seeks, estimates, may, will,î and variations of these words or similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and involve a number of risks and uncertainties, including but not limited to customer demand and competitive conditions. Factors that could cause actual results to differ materially are included in, but not limited to, those identified in the ìManagementís Discussion and Analysis of Financial Condition and Results of Operations,î in the Annual Report on Form 10-K for the Companyís fiscal year ended September 29, 2007 and in this Quarterly Report on Form 10-Q. The Company undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may reflect events or circumstances after the date of this report.

OVERVIEW

At June 28, 2008, we (i) operated 22 units, (excluding the adult entertainment club referenced in (ii) below), consisting of restaurants, package stores and combination restaurants/package 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 stores. The table below provides information concerning the type (i.e. restaurant, package 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 June 28, 2008 and as compared to June 30, 2007 and September 29, 2007. On July 28, 2008, a Flaniganís Seafood Bar and Grill restaurant located in Davie, Florida opened for business. We are the sole general partner and a 48% limited partner in the limited partnership which owns this Davie, Florida restaurant. 9.5% of the remaining limited partnership interest is owned by persons who are either our officers, directors or their family members. With the exception of one restaurant we operate under the name ìThe Whaleís Ribî and in which we do not have an ownership interest, 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.

Types of Units	June 28, 2008	September 29, 2007	June 30, 2007
Company Owned: Combination package and restaurant	4	4	4
Restaurant only	3	3	3
Package store only	5	5	5

Company Operated Restaurants Only:
Limited Partnerships	8	7	7	(1)
Franchise	1	1	1	(2)
Unrelated Third Party	1	1	1

Company Owned Club:	1	1	1

Total Company Owned/Operated Units	23	22	22
Franchised Units	6	6	6	(2)

Notes:

(1) Includes the 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. Does not include the restaurant located in Davie, Florida which commenced operating on July 28, 2008.

(2) 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 the Company.

RESULTS OF OPERATIONS

	-----------------------Thirteen Weeks Ended-----------------------
	June 28, 2008		June 30, 2007
	Amount (In thousands)	Percent	Amount (In thousands)	Percent
Restaurant food sales	$ 10,182	66.25	$ 9,773	65.08
Restaurant bar sales	2,346	15.26	2,206	14.69
Package store sales	2,842	18.49	3,037	20.23

Total Sales	$ 15,370	100.00	$ 15,016	100.00

Franchise related revenues	273		279
Ownerís fee	68		71
Other operating income	54		41

Total Revenue	$ 15,765		$ 15,407
	-----------------------Thirty-Nine Weeks Ended-----------------------
	June 28, 2008		June 30, 2007
	Amount (In thousands)	Percent	Amount (In thousands)	Percent
Restaurant food sales	$ 30,714	64.66	$ 28,832	63.33
Restaurant bar sales	7,117	14.98	6,642	14.59
Package store sales	9,673	20.36	10,050	22.08

Total Sales	$ 47,504	100.00	$ 45,524	100.00

Franchise related revenues	815		887
Ownerís fee	183		151
Other operating income	150		134

Total Revenue	$ 48,652		$ 46,696

Franchise Financial Arrangement: In exchange for our providing management and related services to our franchisees and granting them the right to use our service marks ìFlaniganís Seafood Bar and Grillî and ìBig Daddyís Liquorsî, 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 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, pro-rata, based upon gross sales.

Limited Partnership Financial Arrangement: We manage and control the operations of all restaurants owned by limited partnerships, except the Fort Lauderdale, Florida restaurant which is owned by a related franchisee. Accordingly, the results of operations of all limited partnership owned restaurants, except the Fort Lauderdale, Florida restaurant are consolidated into our operations for accounting purposes. The results of operations of the Fort Lauderdale, Florida restaurant are accounted for by us utilizing the equity method. In general, until the investorsí cash investment in a limited partnership (including any cash invested by us and our affiliates) is returned in full, the limited partnership distributes to the investors annually out of available cash from the operation of the restaurant 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, with the balance distributed to the investors. Once the investors in the limited partnership have received, in full, amounts equal to their cash invested, an annual management fee is payable to us equal to one-half (‡) of cash available to the limited partnership, with the other one half (‡) of available cash distributed to the investors (including us and our affiliates). As of June 28, 2008, limited partnerships owning three (3) restaurants 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 the service mark ìFlaniganís Seafood Bar and Grillî.

Comparison of Thirteen Weeks Ended June 28, 2008 and June 30, 2007.

Revenues. Total revenue for the thirteen weeks ended June 28, 2008 increased $358,000 or 2.32% to $15,765,000 from $15,407,000 for the thirteen weeks ended June 30, 2007. This increase resulted from sales from the Pembroke Pines, Florida limited partnership owned restaurant ($790,000) which was opened on October 28, 2007, offset by the decline in same store restaurant food and bar sales. Without giving effect to the revenues generated from the Pembroke Pines, Florida restaurant, ($790,000), total revenue for the thirteen weeks ended June 28, 2008 would have decreased $432,000 or 2.80% to $14,975,000 from $15,407,000 for the thirteen weeks ended June 30, 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 $10,182,000 for the thirteen weeks ended June 28, 2008 as compared to $9,773,000 for the thirteen weeks ended June 30, 2007. The increase in restaurant food sales is due to sales from the Pembroke Pines, Florida restaurant, which generated $667,000 of revenues from the sale of food during the thirteen weeks ended June 28, 2008. Without giving effect to the revenue generated from the Pembroke Pines, Florida restaurant, ($667,000), revenue from the sale of food for the thirteen weeks ended June 28, 2008 would have decreased $258,000 or 2.64% to $9,515,000 from $9,773,000 for the thirteen weeks ended June 30, 2007. Comparable weekly restaurant food sales (for restaurants open for all of the third quarter of our fiscal year 2008 and the third quarter of our fiscal year 2007, which consists of seven restaurants owned by us and seven restaurants owned by affiliated limited partnerships) was $732,000 and $752,000 for the thirteen weeks ended June 28, 2008 and June 30, 2007, respectively, a decrease of 2.66%. Comparable weekly restaurant food sales for Company owned restaurants only was unchanged at $330,000 for the third quarter of our fiscal year 2008 and the third quarter of our fiscal year 2007. Comparable weekly restaurant food sales for affiliated limited partnership owned restaurants only was $402,000 and $422,000 for the third quarter of our fiscal year 2008 and the third quarter of our fiscal year 2007, respectively, a decrease of 4.74%. We anticipate that restaurant food sales will continue to increase through our fiscal year 2008 due to, among other things, the operation of the Pembroke Pines, Florida limited partnership owned restaurant through the balance of our fiscal year 2008 and the opening of the Davie, Florida restaurant during the fourth quarter of our fiscal year 2008, offset by a decline in same store restaurant food sales.

Restaurant Bar Sales. Restaurant revenue generated from the sale of alcoholic beverages at restaurants (bar sales) totaled $2,346,000 for the thirteen weeks ended June 28, 2008 as compared to $2,206,000 for the thirteen weeks ended June 30, 2007. The increase in restaurant bar sales is due to sales from the Pembroke Pines, Florida restaurant, which generated $123,000 of revenues from restaurant bar sales during the thirteen weeks ended June 28, 2008. Without giving effect to the revenue from restaurant bar sales generated from the Pembroke Pines, Florida restaurant, ($123,000), revenue from restaurant bar sales for the thirteen weeks ended June 28, 2008 would have increased $17,000 or 0.77% to $2,223,000 from $2,206,000 for the thirteen weeks ended June 30, 2007. Comparable weekly restaurant bar sales (for restaurants open for all of the third quarter of our fiscal year 2008 and the third quarter of our fiscal year 2007, which consists of seven restaurants owned by us and seven restaurants owned by affiliated limited partnerships) was $171,000 and $170,000 for the thirteen weeks ended June 28, 2008 and June 30, 2007, respectively, an increase of 0.59%. Comparable weekly restaurant bar sales for Company owned restaurants only was $74,000 and $72,000 for the third quarter of our fiscal year 2008 and the third quarter of our fiscal year 2007, respectively, an increase of 2.78%. Comparable weekly restaurant bar sales for affiliated limited partnership owned restaurants only was $97,000 and $98,000 for the third quarter of our fiscal year 2008 and the third quarter of our fiscal year 2007, respectively, a decrease of 1.02%. We anticipate that restaurant bar sales will continue to increase through our fiscal year 2008 due to, among other things, the operation of the Pembroke Pines, Florida restaurant through the balance of our fiscal year 2008 and the opening of the Davie, Florida restaurant during the fourth quarter of our fiscal year 2008.

Package Store Sales. Revenue generated from sales of liquor and related items at package stores totaled $2,842,000 for the thirteen weeks ended June 28, 2008 as compared to $3,037,000 for the thirteen weeks ended June 30, 2007, a decrease of 6.42%. The weekly average of same store package store sales was $219,000 and $234,000 for the thirteen weeks ended June 28, 2008 and June 30, 2007, respectively. The decrease was primarily due to increased competition. Package store sales are expected to decline through the balance of our fiscal year 2008. Increased competition has had a greater adverse impact upon package store sales when customers routinely make larger volume purchases, which historically have been more likely to occur during the first and second quarters of our fiscal year.

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 the thirteen weeks ended June 28, 2008 decreased $5,000 or 0.03% to $15,114,000 from $15,119,000 for the thirteen weeks ended June 30, 2007. The decrease was primarily due to a decrease in the cost of package goods associated with the decline in our package store sales, a decrease in the cost of our higher volume meal items, a decrease in repairs and maintenance to our units and actions taken by management to reduce costs and/or expenses, including but not limited to new lower cost menu items and/or ingredients, offset by expenses related to the operation of the Pembroke Pines, Florida restaurant, pre-opening expenses related to the Davie, Florida restaurant and to a lesser extent a general increase in overall expenses. We anticipate that our operating costs and expenses will increase through our fiscal year 2008 due to, among other things, the opening of the Davie, Florida restaurant during the fourth quarter of fiscal year 2008. Operating costs and expenses decreased as a percentage of total sales to approximately 95.87% in the third quarter of our fiscal year 2008 from 98.13% in the third quarter of 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 the thirteen weeks ended June 28, 2008 increased to $8,331,000 from $7,768,000 for the thirteen weeks ended June 30, 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), increased to 66.50% for the thirteen weeks ended June 28, 2008 compared to 64.85% for the thirteen weeks ended June 30, 2007. The increase in our gross profit margin for restaurant and bar sales for the third quarter of our fiscal year 2008 was primarily due to the lower cost of our higher volume menu items, menu price increases instituted at the end of the first quarter of our fiscal year 2008, introduction of lower cost menu items and a decrease in the cost of ribs during calendar year 2008.

Package Store Sales. Gross profit for package store sales for the thirteen weeks ended June 28, 2008 decreased to $848,000 from $863,000 for the thirteen weeks ended June 30, 2007. Our gross profit margin, (calculated as gross profit reflected as a percentage of package store sales), was 29.84% for the thirteen weeks ended June 30, 2008 compared to 28.42% for the thirteen weeks ended June 30, 2007. The increase in our gross profit margin, (1.42%), was primarily due to the purchase of "close out" and inventory reduction merchandise from wholesalers. We anticipate the gross profit margin for package store sales to remain constant throughout the balance of fiscal year 2008.

Payroll and Related Costs. Payroll and related costs for the thirteen weeks ended June 28, 2008 increased $151,000 or 3.36% to $4,645,000 from $4,494,000 for the thirteen weeks ended June 30, 2007. This increase is primarily attributable to expenses associated with the Pembroke Pines, Florida and Davie, Florida restaurants. We anticipate that our payroll costs and related expenses will continue to increase through our fiscal year 2008 due to, among other things, the operation of the Pembroke Pines, Florida restaurant through the balance of our fiscal year 2008 and the opening of the Davie, Florida restaurant during the fourth quarter of fiscal year 2008. Payroll and related costs as a percentage of total sales was 29.46% in the third quarter of our fiscal year 2008 and 29.17% of total sales in the third quarter of 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, offset by reductions in store level management, where appropriate.

Occupancy Costs. Occupancy costs (consisting of rent, common area maintenance, repairs, real property taxes and amortization of leasehold purchases) for the thirteen weeks ended June 28, 2008 decreased $110,000 or 10.01% to $989,000 from $1,099,000 for the thirteen weeks ended June 30, 2007. This decrease is due to a decrease in percentage rent and a general decrease in repairs and maintenance.

Depreciation. Depreciation for the thirteen weeks ended June 28, 2008 and June 30, 2007 was $457,000 and $466,000 respectively. As a percentage of revenue, depreciation expense was 2.90% of revenue in the thirteen weeks ended June 28, 2008 and 3.02% of revenue in the thirteen weeks ended June 30, 2007.

Other Income and Expense. Other income and expenses was an expense of $83,000 for the thirteen weeks ended June 28, 2008, as compared to an income of $304,000 for the thirteen weeks ended June 30, 2007. Other income and expense for the thirteen weeks ended June 30, 2007 includes a gain of $393,000 from the sale of real property. Other income and expense for the thirteen weeks ended June 28, 2008 includes interest expense of $117,000, as compared to interest expense of $129,000 for the thirteen weeks ended June 30, 2007.

Interest Expense, Net. Interest expense, net, for the thirteen weeks ended June 28, 2008 decreased $12,000 to $117,000 from $129,000 for the thirteen weeks ended June 30, 2007.

Net Income. Net income for the thirteen weeks ended June 28, 2008 decreased $91,000 or 21.31% to $336,000 from $427,000 for the thirteen weeks ended June 30, 2007. As a percentage of sales, net income for the third quarter of our fiscal year 2008 is 2.13%, as compared to 2.77% in the third quarter of our fiscal year 2007. During the third quarter of fiscal year 2007, we recognized 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, ($141,000), and the Davie, Florida restaurant, ($62,000), which adversely affected net income. Without giving effect to the sale of the real property, we would have generated net income of $191,000 for the thirteen weeks ended June 30, 2007, which as a percentage of sales is 1.24%. Without giving effect to the sale of the real property for the thirteen weeks ended June 30, 2007, the increase in net income for the thirteen weeks ended June 28, 2008, as a percentage of sales (0.89%) is 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, ($74,000).

Comparison of Thirty-Nine Weeks Ended June 28, 2008 and June 30, 2007.

Revenues. Total revenue for the thirty-nine weeks ended June 28, 2008 increased $1,956,000 or 4.19% to $48,652,000 from $46,696,000 for the thirty-nine weeks ended June 30, 2007. This increase resulted from sales from two restaurant locations, the Pembroke Pines, Florida limited partnership owned restaurant ($2,465,000) which opened for business on October 29, 2007, and the Company owned Lake Worth, Florida restaurant ($1,281,000), which opened for business on March 4, 2007, offset by the decline in same store restaurant food and bar sales. Prior to March 4, 2007, the Lake Worth, Florida restaurant was franchised by the Company. The Lake Worth, Florida restaurant generated $612,000 of revenue during the thirty-nine weeks ended June 30, 2007. Without giving effect to the revenue generated from the Pembroke Pines, Florida restaurant, ($2,465,000), and the increased revenue generated from the Lake Worth, Florida restaurant, ($669,000), total revenue for the thirty-nine weeks ended June 28, 2008 would have decreased $1,178,000 or 2.52% to $45,518,000 from $46,696,000 for the thirty-nine weeks ended June 30, 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 $30,714,000 for the thirty-nine weeks ended June 28, 2008 as compared to $28,832,000 for the thirty-nine weeks ended June 30, 2007. The increase in restaurant food sales is due to sales from the Pembroke Pines, Florida and Lake Worth, Florida restaurants. The Pembroke Pines, Florida and Lake Worth, Florida locations generated $2,070,000 and $1,056,000 of revenues, respectively, from the sale of food during the thirty-nine weeks ended June 28, 2008, while the Lake Worth, Florida restaurant generated $511,000 of revenue from the sale of food during the thirty-nine weeks ended June 30, 2007. Without giving effect to the revenue generated from the Pembroke Pines, Florida restaurant, ($2,070,000), and the increased revenue generated from the Lake Worth, Florida restaurant, ($545,000), revenue from the sale of food for the thirty-nine weeks ended June 28, 2008 would have decreased $733,000 or 2.54% to $28,099,000 from $28,832,000 for the thirty-nine weeks ended June 30, 2007. Comparable weekly restaurant food sales (for restaurants open for all of the thirty-nine weeks ended June 28, 2008 and the thirty-nine weeks ended June 30, 2007, which consists of six restaurants owned by us and seven restaurants owned by affiliated limited partnerships) was $707,000 and $726,000 for the thirty-nine weeks ended June 28, 2008 and June 30, 2007, respectively, a decrease of 2.62%. Comparable weekly restaurant food sales for Company owned restaurants only was $304,000 and $301,000 for the thirty-nine weeks ended June 28, 2008 and June 30, 2007, respectively, an increase of 1.00%. Comparable weekly restaurant food sales for affiliated limited partnership owned restaurants only was $404,000 and $425,000 for the thirty-nine weeks ended June 28, 2008 and June 30, 2007, respectively, a decrease of 4.94%. We anticipate that restaurant food sales will continue to increase through our fiscal year 2008 due to, among other things, the operation of the Pembroke Pines, Florida restaurant through the balance of our fiscal year 2008 and the opening of the Davie, Florida restaurant during the fourth quarter of our fiscal year 2008, offset by a decline in same store restaurant food sales.

Restaurant Bar Sales. Restaurant revenue generated from the sale of alcoholic beverages at restaurants (bar sales) totaled $7,117,000 for the thirty-nine weeks ended June 28, 2008 as compared to $6,642,000 for the thirty-nine weeks ended June 30, 2007. The increase in restaurant bar sales is due to sales from the Pembroke Pines, Florida and Lake Worth, Florida restaurants. The Pembroke Pines, Florida and Lake Worth, Florida locations generated $395,000 and $227,000 of revenues from restaurant bar sales during the thirty-nine weeks ended June 28, 2008, respectively, while the Lake Worth, Florida restaurant generated $101,000 of revenue from restaurant bar sales during the thirty-nine weeks ended June 30, 2007. Without giving effect to the revenue from restaurant bar sales generated from the Pembroke Pines, Florida restaurant, ($395,000), and the increased revenue from restaurant bar sales generated from the Lake Worth, Florida restaurant, ($126,000), revenue from restaurant bar sales for the thirty-nine weeks ended June 28, 2008 would have decreased $46,000 or 0.69% to $6,596,000 from $6,642,000 for the thirty-nine weeks ended June 30, 2007. Comparable weekly restaurant bar sales (for restaurants open for all of the thirty-nine weeks ended June 28, 2008 and the thirty-nine weeks ended June 30, 2007, which consists of six restaurants owned by us and seven restaurants owned by affiliated limited partnerships) was $167,000 and $168,000 for the thirty nine weeks ended June 28, 2008 and June 30, 2007, respectively, a decrease of 0.60%. Comparable weekly restaurant bar sales for Company owned restaurants only was $69,000 and $66,000 for the thirty-nine weeks ended June 28, 2008 and the thirty- nine weeks ended June 30, 2007, respectively, an increase of 4.55%. Comparable weekly restaurant bar sales for affiliated limited partnership owned restaurants only was $98,000 and $101,000 for the thirty- nine weeks ended June 28, 2008 and the thirty-nine weeks ended June 30, 2007, respectively, a decrease of 2.97%. We anticipate that restaurant bar sales will continue to increase through our fiscal year 2008 due to, among other things, the operation of the Pembroke Pines, Florida restaurant through the balance of our fiscal year 2008 and the opening of the Davie, Florida restaurant during the fourth quarter of our fiscal year 2008, offset by a decline in same store restaurant bar sales.

Package Store Sales. Revenue generated from sales of liquor and related items at package stores totaled $9,673,000 for the thirty-nine weeks ended June 28, 2008 as compared to $10,050,000 for the thirty-nine weeks ended June 30, 2007, a decrease of 3.75%. The weekly average of same store package store sales was $248,000 and $258,000 for the thirty-nine weeks ended June 28, 2008 and June 30, 2007, respectively. The decrease was primarily due to increased competition. Package store sales are expected to decline through the balance of our fiscal year 2008. Increased competition has had a greater adverse impact upon package store sales when customers routinely make larger volume purchases, which historically have been more likely to occur during the first and second quarters of our fiscal year.

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 the thirty- nine weeks ended June 28, 2008 increased $1,965,000 or 4.38% to $46,851,000 from $44,886,000 for the thirty-nine weeks ended June 30, 2007. The increase was primarily due to expenses related to the operation of the Pembroke Pines, Florida restaurant, pre-opening expenses related to the Davie, Florida restaurant 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 costs and/or expenses, including but not limited to new lower cost menu items and/or ingredients. We anticipate that our operating costs and expenses will continue to increase through our fiscal year 2008 due to, among other things, the opening of the Davie, Florida restaurant during the fourth quarter of fiscal year 2008. Operating costs and expenses increased as a percentage of total sales to approximately 96.30% for the thirty-nine weeks ended June 28, 2008 from 96.12% for the thirty-nine weeks ended June 30, 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 the thirty-nine weeks ended June 28, 2008 increased to $25,161,000 from $23,268,000 for the thirty-nine weeks ended June 30, 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), increased to 66.51% for the thirty-nine weeks ended June 28, 2008 compared to 65.59% for the thirty-nine weeks ended June 30, 2007. This increase in gross profit for restaurant and bar sales for the thirty-nine weeks ended June 28, 2008 was primarily due to menu price increases instituted at the end of the first quarter of our fiscal year 2008, introduction of lower cost menu items and/or ingredients and a decrease in the cost of ribs during calendar year 2008.

Package Store Sales. Gross profit for package store sales for the thirty-nine weeks ended June 28, 2008 increased to $2,818,000 from $2,813,000 for the thirty-nine weeks ended June 30, 2007. Our gross profit margin, (calculated as gross profit reflected as a percentage of package store sales), was 29.13% for the thirty-nine weeks ended June 28, 2008 compared to 27.99% for the thirty-nine weeks ended June 30, 2007. The increase in our gross profit margin, (1.14%), was primarily due to the purchase of "close out" and inventory reduction merchandise from wholesalers. We anticipate the gross profit margin for package store sales to remain constant throughout the balance of our fiscal year 2008.

Payroll and Related Costs. Payroll and related costs for the thirty-nine weeks ended June 28, 2008 increased $1,265,000 or 9.66% to $14,363,000 from $13,098,000 for the thirty-nine weeks ended June 30, 2007. This increase is primarily attributable to the expenses associates with the Pembroke Pines, Florida and Lake Worth, Florida restaurants. We anticipate that our payroll costs and related expenses will continue to increase through our fiscal year 2008 due to, among other things, the operation of the Pembroke Pines, Florida restaurant through the balance of our fiscal year 2008 and the opening of the Davie, Florida restaurant during the fourth quarter of fiscal year 2008. Payroll and related costs as a percentage of total sales was 29.52% for the thirty-nine weeks ended June 28, 2008 and 28.05% of total sales for the thirty-nine weeks ended June 30, 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 the thirty-nine weeks ended June 28, 2008 increased $106,000 or 3.70% to $2,969,000 from $2,863,000 for the thirty-nine weeks ended June 30, 2007. This increase is due to, (i) rental payments for the entire thirty-nine weeks ended June 28, 2008 at three additional restaurant locations (Pembroke Pines, Florida, - $106,000, Davie, Florida - $100,000, and Lake Worth, Florida - $74,000), as compared to rental payments for a part of the thirty-nine weeks ended June 30, 2007 at the same three additional restaurant locations, (Pembroke Pines, Florida - $18,000 (non-cash pre-opening rent) and $71,000 (cash pre-opening rent), Davie, Florida - $92,000 and Lake Worth, Florida - $35,000); 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.

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 the thirty-nine weeks ended June 30, 2008 increased $512,000 or 5.40% to $9,994,000 from $9,482,000 for the thirty-nine weeks ended June 30, 2007. Selling, general and administrative expenses increased as a percentage of total sales for the thirty-nine weeks ended June 28, 2008 to 20.54% as compared to 20.31% for the thirty-nine weeks ended June 30, 2007. This increase is attributable to the operation of the Pembroke Pines, Florida and Lake Worth, Florida restaurants and an overall increase in expenses. We anticipate that our selling, general and administrative expenses will increase throughout the balance of our fiscal year 2008 due to, among other things, the operation of our Pembroke Pines, Florida restaurant throughout the balance of our fiscal year 2008, the opening of the Davie, Florida restaurant during the fourth quarter of fiscal year 2008 and the continuation of an overall increase in expenses, which will not be offset in their entirety by reduced advertising and increased advertising credits and rebates from our food distributor.

Depreciation. Depreciation for the thirty-nine weeks ended June 28, 2008 and June 30, 2007 was $1,518,000 and $1,454,000 respectively. As a percentage of revenue, depreciation expense was 3.12% of revenue in the thirty-nine weeks ended June 28, 2008 and 3.11% of revenue in the thirty-nine weeks ended June 30, 2007.

Other Income and Expense. Other income and expenses was an expense of $287,000 for the thirty-nine weeks ended June 28, 2008, as compared to income of $116,000 for the thirty-nine weeks ended June 30, 2007. Other income and expense for the thirty-nine weeks ended June 30, 2007 includes a gain of $393,000 from the sale of real property. Other income and expense for the thirty-nine weeks ended June 28, 2008 includes interest expense of $358,000, as compared to interest expense of $387,000 for the thirty- nine weeks ended June 30, 2007. The decrease in interest expense is attributable to a decreased average balance outstanding on our line of credit during the thirty-nine weeks ended June 28, 2008.

Interest Expense, Net. Interest expense, net, for the thirty-nine weeks ended June 28, 2008 decreased $29,000 to $358,000 from $387,000 for the thirty-nine weeks ended June 30, 2007.

Net Income. Net income for the thirty-nine weeks ended June 28, 2008 decreased $92,000 or 8.49% to $991,000 from $1,083,000 for the thirty-nine weeks ended June 30, 2007. As a percentage of sales, net income for the thirty-nine weeks ended June 28, 2008 is 2.04%, as compared to 2.32% for the thirty-nine weeks ended June 30, 2007. During the thirty-nine weeks ended June 30, 2007, we recognized 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, ($205,000), and the Davie, Florida restaurant, ($118,000), which adversely affected net income. Without giving effect to the sale of the real property, we would have generated net income of $813,000 for the thirty-nine weeks ended June 30, 2007, which as a percentage of sales is 1.74%. Without giving effect to the sale of the real property for the thirty-nine weeks ended June 30, 2007, the increase in net income for the thirty-nine weeks ended June 28, 2008, as a percentage of sales (0.30%), is 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, ($74,000).

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. 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 the thirty nine weeks ended June 28, 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 the thirty nine weeks ended June 28, 2008, we also paid and expensed pre-opening rent in the approximate amount of $100,000 for the Davie, Florida restaurant, which is the full rent provided in the lease. During the thirty nine weeks ended June 30, 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 $71,000 for the Pembroke Pines, Florida restaurant and pre-opening rent in the approximate amount of $92,000 for the Davie, Florida restaurant. We are recognizing rent expense on a straight line basis over the term of the lease.

During the thirty nine weeks ended June 28, 2008, the limited partnership restaurant in Davie, Florida reported losses of $400,000 primarily due to pre-opening costs, thus contributing to a reduction in the operating income for the thirty nine weeks ended June 28, 2008. During the thirty nine weeks ended June 30, 2007, the limited partnership restaurant in Pembroke Pines, Florida reported a loss of $205,000 primarily due to pre-opening costs and the limited partnership restaurant in Davie, Florida reported a loss of $118,000 primarily due to pre-opening costs, thus contributing to a reduction in the operating income for the thirty nine weeks ended June 30, 2007.

Throughout the balance of fiscal year 2008, income from operations will be adversely affected by pre-opening costs, including but not limited to pre-opening rent, ($11,000), to be incurred for the Davie, Florida restaurant. Management believes that our current cash availability from our 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

During the next twelve months, we expect continued increases in restaurant sales compared to corresponding periods in prior years due primarily to the Pembroke Pines, Florida restaurant being open for the entire twelve month period and the opening of the new restaurant in Davie, Florida. Same store restaurant food and bar sales are expected to decline over the next twelve month period, with decreases primarily in restaurants in Palm Beach County, Florida and to a lesser extent in Broward County, Florida, offset partially by increases in same store restaurant food and bar sales in Miami-Dade County, Florida, due to our strong name recognition in that county. Package store sales are expected to decrease due primarily to increased competition. Management also expects higher food costs and overall expenses to increase. We are reviewing our food costs and overall expenses looking for ways to reduce and/or control the same, including but not limited to new lower cost menu items and/or ingredients, without sacrificing our food quality and service. During the first quarter of our fiscal year 2007, we raised menu prices to offset the higher food costs and overall expenses. During the first quarter of our fiscal year 2008, we again raised menu prices to offset higher food costs and overall expenses and will continue to do so whenever necessary and wherever competitively possible.

Liquidity and Capital Resources

We fund our operations through cash from operations and borrowings under our line of credit. As of June 28, 2008, we had cash of approximately $3,464,000, an increase of $1,241,000 from our cash balance of $2,223,000 as of September 29, 2007. The increase in cash was due primarily to amounts which have been raised but have not yet been required to be used for expenses by the limited partnership which owns the Davie, Florida location, ($696,000) and from our operations due to minimal demand upon our cash flow for extraordinary items.

Cash Flows

The following table is a summary of our cash flows for the thirty-nine weeks of fiscal years 2008 and 2007.

	---------Thirty-Nine Weeks Ended--------
	June 28, 2008	June 30, 2007
	(in Thousands)

Net cash provided by operating activities	$ 2,506	$ 2,299
Net cash used in investing activities	(2,823)	(2,100)
Net cash provided by financing activities	1,558	1,433

Net Increase in Cash and Cash Equivalents


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


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