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 "anticipates, appears, expects, trends, intends, hopes, plans, believes, seeks, estimates, may, will," 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 "Management's Discussion and Analysis of Financial Condition and Results of Operations," in the Annual Report on our Form 10-K for the fiscal year ended October 1, 2011 and in this Quarterly Report on Form 10-Q. We undertake 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 March 31, 2012, we (i) operated 24 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 five units, consisting of one restaurant and four combination restaurants/package stores, (one restaurant of which we operate). 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 March 31, 2012 and as compared to April 2, 2011 and October 1, 2011. With the exception of "The Whale's Rib", a restaurant we operate but do not own, all of the restaurants operate under our service mark "Flanigan's Seafood Bar and Grill" and all of the package liquor stores operate under our service mark "Big Daddy's Liquors". For the thirteen and twenty six weeks ended March 31, 2012, we generated revenue of $179,000 and $230,000 from our leasing to unaffiliated third parties of retail space.

Types of Units                     March 31, 2012 October 1, 2011 April 2, 2011
Company Owned:
Combination package and restaurant       4               4              4
Restaurant only                          5               5              4       (1)
Package store only                       5               5              5

Company Operated Restaurants Only:
Limited Partnerships                     8               8              9       (1)
Franchise                                1               1              1
Unrelated Third Party                    1               1              1

Company Owned Club:                      1               1              1

Total Company Owned/Operated Units       25             25             25
Franchised Units                         5               5              5       (2)

Notes:

(1) During the fourth quarter of our fiscal year 2011, we purchased from a limited partnership the operating assets of the restaurant located in Stuart, Florida and accordingly, on July 31, 2011, the restaurant converted from a limited partnership unit to a Company owned restaurant.

(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 us.

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 "Flanigan's Seafood Bar and Grill" and "Big Daddy's Liquors", our franchisees (four 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 and managed 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 investors' 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 (½) 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 (½) of available cash to the limited partnership, with the other one half (½) of available cash distributed to the investors (including us and our affiliates). As of March 31, 2012, 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 (½) of the cash available for distribution by the limited partnership. In addition to its receipt of distributable amounts from the limited partnerships, we receive a fee equal to 3% of gross sales for use of the service mark "Flanigan's Seafood Bar and Grill".

RESULTS OF OPERATIONS

                                                -----------------------Thirteen Weeks Ended-----------------------
                                                    March 31, 2012                               April 2, 2011
                                             Amount                                      Amount
                                         (In thousands)            Percent           (In thousands)            Percent
Restaurant food sales                    $        13,007                 64.70       $        12,169                 64.70
Restaurant bar sales                               3,522                 17.52                 3,133                 16.66
Package store sales                                3,575                 17.78                 3,505                 18.64

Total Sales                              $        20,104                100.00       $        18,807                100.00

Franchise related revenues                           248                                         244
Rental income                                        179                                           -
Owner's fee                                           43                                          42
Other operating income                                44                                          71

Total Revenue                            $        20,618                             $        19,164

                                               -----------------------Twenty Six Weeks Ended-----------------------
                                                    March 31, 2012                               April 2, 2011
                                             Amount                                      Amount
                                         (In thousands)            Percent           (In thousands)            Percent
Restaurant food sales                    $        24,698                 63.87       $        23,083                 63.65
Restaurant bar sales                               6,615                 17.11                 5,979                 16.49
Package store sales                                7,357                 19.02                 7,204                 19.86

Total Sales                              $        38,670                100.00       $        36,266                100.00

Franchise related revenues                           511                                         503
Rental income                                        230                                           -
Owner's fee                                           82                                          84
Other operating income                                77                                          99

Total Revenue                            $        39,570                             $        36,952

Comparison of Thirteen Weeks Ended March 31, 2012 and April 2, 2011.

Revenues. Total revenue for the thirteen weeks ended March 31, 2012 increased $1,454,000 or 7.59% to $20,618,000 from $19,164,000 for the thirteen weeks ended April 2, 2011. $179,000 of our total revenue for the thirteen weeks ended March 31, 2012 was derived from rental income of retail space.

Restaurant Food Sales. Restaurant revenue generated from the sale of food at restaurants (food sales) totaled $13,007,000 for the thirteen weeks ended March 31, 2012 as compared to $12,169,000 for the thirteen weeks ended April 2, 2011. Comparable weekly food sales (for restaurants open for all of the second quarter of our fiscal year 2012 and the second quarter of our fiscal year 2011, which consists of eight restaurants owned by us and eight restaurants owned by affiliated limited partnerships) was $969,000 and $902,000 for the thirteen weeks ended March 31, 2012 and April 2, 2011, respectively, an increase of 7.43%. Comparable weekly food sales for Company owned restaurants was $445,000 and $400,000 for the second quarter of our fiscal year 2012 and the second quarter of our fiscal year 2011, respectively, an increase of 11.25%. Comparable weekly food sales for affiliated limited partnership owned restaurants was $524,000 and $502,000 for the second quarter of our fiscal year 2012 and the second quarter of our fiscal year 2011, respectively, an increase of 4.38%.

Restaurant Bar Sales. Restaurant revenue generated from the sale of alcoholic beverages at restaurants (bar sales) totaled $3,522,000 for the thirteen weeks ended March 31, 2012 as compared to $3,133,000 for the thirteen weeks ended April 2, 2011. Comparable weekly bar sales (for restaurants open for all of the second quarter of our fiscal years 2012 and 2011, which consists of eight restaurants owned by us and eight restaurants owned by affiliated limited partnerships) was $262,000 for the thirteen weeks ended March 31, 2012 and $233,000 for the thirteen weeks ended April 2, 2011, an increase of 12.45%. Comparable weekly bar sales for Company owned restaurants was $113,000 and $102,000 for the second quarter of our fiscal year 2012 and the second quarter of our fiscal year 2011, respectively, an increase of 10.78%. Comparable weekly bar sales for affiliated limited partnership owned restaurants was $149,000 and $131,000 for the second quarter of our fiscal year 2012 and the second quarter of our fiscal year 2011, respectively, an increase of 13.74 %.

Package Store Sales. Revenue generated from sales of liquor and related items at package liquor stores (package store sales) totaled $3,575,000 for the thirteen weeks ended March 31, 2012 as compared to $3,505,000 for the thirteen weeks ended April 2, 2011, an increase of $70,000. The weekly average of same store package store sales, (which includes all nine (9) Company owned package liquor stores open for all of the second quarter of our fiscal years 2012 and 2011), was $275,000 for the thirteen weeks ended March 31, 2012 as compared to $270,000 for the thirteen weeks ended April 2, 2011, an increase of 1.85%. Package store sales are expected to remain stable throughout the balance of our fiscal year 2012.

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 March 31, 2012 increased $1,548,000 or 8.62% to $19,505,000 from $17,957,000 for the thirteen weeks ended April 2, 2011. The increase was primarily due to a general increase in food costs, offset by 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 2012 due primarily to an expected general increase in food costs. Operating costs and expenses increased as a percentage of total sales to approximately 94.60% in the second quarter of our fiscal year 2012 from 93.70% in the second quarter of our fiscal year 2011.

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

Restaurant Food Sales and Bar Sales. Gross profit for food sales and bar sales for the thirteen weeks ended March 31, 2012 increased to $10,684,000 from $10,135,000 for the thirteen weeks ended April 2, 2011. Our gross profit margin for food sales and bar sales (calculated as gross profit reflected as a percentage of restaurant food sales and bar sales), was 64.64% for the thirteen weeks ended March 31, 2012 and 66.23% for the thirteen weeks ended April 2, 2011. The decrease in our gross profit margin, (-1.59%) , was primarily due to increases in our food costs, including our cost of ribs, which was only partially offset by menu price and liquor price increases. We anticipate that our gross profit for restaurant food and bar sales will remain stable during the balance of our fiscal year 2012 due to our menu price increases during the fourth quarter of our fiscal year 2011 and liquor price increases during the second quarter of our fiscal year 2012, offset by higher food costs, including our cost of ribs.

Package Store Sales. Gross profit for package store sales for the thirteen weeks ended March 31, 2012 decreased to $1,064,000 from $1,213,000 for the thirteen weeks ended April 2, 2011. Our gross profit margin, (calculated as gross profit reflected as a percentage of package liquor store sales), for package liquor store sales was 29.76% for the thirteen weeks ended March 31, 2012 and 34.61% for the thirteen weeks ended April 2, 2011. The decrease in our gross profit margin, (-4.85%), was primarily due to our inability to purchase "close out" and inventory reduction merchandise from wholesalers.We anticipate that the gross profit margin for package store sales will decrease throughout the balance of our fiscal year 2012 due to our inability to continue purchasing "close out" and inventory reduction merchandise from wholesalers.

Payroll and Related Costs.Payroll and related costs for the thirteen weeks ended March 31, 2012 increased $558,000 or 9.74% to $6,289,000 from $5,731,000 for the thirteen weeks ended April 2, 2011 due primarily to an increase in the Florida minimum wage (4.92%), which was effective January 1, 2012, and to increases in payroll taxes, including unemployment taxes. We anticipate that our payroll and related costs will increase throughout the balance of our fiscal year 2012 due primarily to payroll associated with the new restaurant location in Miami, Florida acquired by a limited partnership during the second quarter of our fiscal year 2012. Payroll and related costs as a percentage of total sales was 30.50% in the second quarter of our fiscal year 2012 and 29.91% of total sales in the second quarter of our fiscal year 2011.

Occupancy Costs. Occupancy costs (consisting of rent, common area maintenance, repairs, real property taxes and amortization of leasehold purchases) for the thirteen weeks ended March 31, 2012 increased $20,000 or 1.85% to $1,100,000 from $1,080,000 for the thirteen weeks ended April 2, 2011. Our occupancy costs increased primarily due to escalating rents at various locations and rental payments for the new restaurant location in Miami, Florida acquired by a limited partnership, which commenced January 27, 2012, partially offset by the elimination of rent from a limited partnership owned restaurant located in the shopping center in Kendall, Florida which we purchased during the first quarter of our fiscal year 2012. We anticipate that our occupancy costs will increase throughout the balance of our fiscal year 2012 due to escalating rents at several locations and rental payments for the new restaurant location in Miami, Florida, offset by the elimination of rent from a limited partnership owned restaurant.

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 thirteen weeks ended March 31, 2012 increased $73,000 or 1.98% to $3,760,000 from $3,687,000 for the thirteen weeks ended April 2, 2011. Selling, general and administrative expenses decreased as a percentage of total sales in the second quarter of our fiscal year 2012 to approximately 18.24% as compared to 19.24% in the second quarter of our fiscal year 2011. We anticipate that our selling, general and administrative expenses will increase throughout the balance of our fiscal year 2012 due primarily to the new restaurant location in Miami, Florida acquired by a limited partnership during the second quarter of our fiscal year 2012, the shopping center acquired during the first quarter of our fiscal year 2012 and increases across all categories.

Depreciation and Amortization. Depreciation and amortization expense for the thirteen weeks ended March 31, 2012 decreased $24,000 or 3.65% to $634,000 from $658,000 from the thirteen weeks ended April 2, 2011. As a percentage of total revenue, depreciation and amortization expense was 3.07% of revenue in the thirteen weeks ended March 31, 2012 and 3.43% of revenue in the thirteen weeks ended April 2, 2011.

Interest Expense, Net. Interest expense, net, for the thirteen weeks ended March 31, 2012 increased $56,000 to $217,000 from $161,000 for the thirteen weeks ended April 2, 2011. Interest expense increased during the thirteen weeks ended March 31, 2012 primarily due to the interest paid on the $4.5 million mortgage loan, the proceeds of which we used to purchase a shopping center in Miami, Florida and a $1.6 million term loan the proceeds of which were also ultimately used to purchase the shopping center, while permitting us to retain our working capital and cash reserves.

Net Income.Net income for the thirteen weeks ended March 31, 2012 decreased $226,000 or 30.75% to $509,000 from $735,000 for the thirteen weeks ended April 2, 2011. As a percentage of sales, net income for the second quarter of our fiscal year 2012 is 2.47%, as compared to 3.84% in the second quarter of our fiscal year 2011. During the thirteen weeks ended April 2, 2011, we recognized income of $231,000, offset by income tax of $69,000, from the sale of our interest, as guarantor, of a nine (9) year leasehold interest.

Comparison of Twenty Six Weeks Ended March 31, 2012 and April 2, 2011.

Revenues. Total revenue for the twenty six weeks ended March 31, 2012 increased $2,618,000 or 7.08% to $39,570,000 from $36,952,000 for the twenty six weeks ended April 2, 2011. $230,000 of our total revenue for the twenty six weeks ended March 31, 2012 was derived from rental income of retail space.

Restaurant Food Sales. Restaurant revenue generated from the sale of food at restaurants (food sales) totaled $24,698,000 for the twenty six weeks ended March 31, 2012 as compared to $23,083,000 for the twenty six weeks ended April 2, 2011. Comparable weekly food sales (for restaurants open for all of the first and second quarters of our fiscal years 2012 and 2011, which consists of seven restaurants owned by us and eight restaurants owned by affiliated limited partnerships) was $918,000 and $856,000 for the twenty six weeks ended March 31, 2012 and April 2, 2011, respectively, an increase of 7.24%. Comparable weekly food sales for Company owned restaurants was $412,000 and $372,000 for the twenty six weeks ended March 31, 2012 and April 2, 2011, respectively, an increase of 10.75%. Comparable weekly food sales for affiliated limited partnership owned restaurants was $506,000 and $484,000 for the twenty six weeks ended March 31, 2012 and April 2, 2011, respectively, an increase of 4.55%.

Restaurant Bar Sales. Restaurant revenue generated from the sale of alcoholic beverages at restaurants (bar sales) totaled $6,615,000 for the twenty six weeks ended March 31, 2012 as compared to $5,979,000 for the twenty six weeks ended April 2, 2011. Comparable weekly bar sales (for restaurants open for all of the first and second quarters of our fiscal years 2012 and 2011, which consists of seven restaurants owned by us and eight restaurants owned by affiliated limited partnerships) was $246,000 for the twenty six weeks ended March 31, 2012 and $223,000 for the twenty six weeks ended April 2, 2011, an increase of 10.31%. Comparable weekly bar sales for Company owned restaurants was $106,000 and $96,000 for the twenty six weeks ended March 31, 2012 and April 2, 2011, respectively, an increase of 10.42%. Comparable weekly bar sales for affiliated limited partnership owned restaurants was $140,000 and $127,000 for the twenty six weeks ended March 31, 2012 and April 2, 2011, respectively, an increase of 10.24%.

Package Store Sales. Revenue generated from sales of liquor and related items at package stores (package store sales) totaled $7,357,000 for the twenty six weeks ended March 31, 2012 as compared to $7,204,000 for the twenty six weeks ended April 2, 2011, an increase of $153,000. The weekly average of same store package store sales, (which includes all nine (9) Company owned package liquor stores open for all of the first and second quarters of our fiscal years 2012 and 2011) was $283,000 and $277,000 for the twenty six weeks ended March 31, 2012 and April 2, 2011, respectively, an increase of 2.17%. Package liquor store sales are expected to remain stable throughout the balance of our fiscal year 2012.

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 twenty six weeks ended March 31, 2012 increased $2,720,000 or 7.75% to $37,797,000 from $35,077,000 for the twenty six weeks ended April 2, 2011. The increase was primarily due to a general increase in food costs, offset by 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 2012 due primarily the new restaurant location in Miami, Florida acquired by a limited partnership during the second quarter of our fiscal year 2012, the shopping center in Kendall, Florida acquired during the first quarter of our fiscal year 2012 and to an expected general increase in food costs, including an increase in the cost of ribs. Operating costs and expenses increased as a percentage of total sales to approximately 95.52% for the twenty six weeks ended March 31, 2012 from 94.93% for the twenty six weeks ended April 2, 2011.

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

Restaurant Food Sales and Bar Sales. Gross profit for food and bar sales for the twenty six weeks ended March 31, 2012 increased to $20,364,000 from $19,169,000 for the twenty six weeks ended April 2, 2011. Our gross profit margin for food sales and bar sales (calculated as gross profit reflected as a percentage of food sales and bar sales), was 65.03% for the twenty six weeks ended March 31, 2012 and 65.96% for the twenty six weeks ended April 2, 2011. We anticipate that our gross profit for restaurant food and bar sales will decrease during the balance of our fiscal year 2012 due to higher food costs, including our cost of ribs.

Package Store Sales. Gross profit for package store sales for the twenty six weeks ended March 31, 2012 decreased to $2,172,000 from $2,476,000 for the twenty six weeks ended April 2, 2011. Our gross profit margin, (calculated as gross profit reflected as a percentage of package store sales), was 29.52% for the twenty six weeks ended March 31, 2012 compared to 34.37% for the twenty six weeks ended April 2, 2011. The decrease in our gross profit margin, (-4.85%), was primarily due to our inability to purchase "close out" and inventory reduction merchandise from wholesalers. We anticipate that the gross profit margin for package store sales will decrease throughout the balance of our fiscal year 2012 due to our inability to continue purchasing "close out" and inventory reduction merchandise from wholesalers.

Payroll and Related Costs.Payroll and related costs for the twenty six weeks ended March 31, 2012, increased $872,000 or 7.93% to $11,873,000 from $11,001,000 for the twenty six weeks ended April 2, 2011 due primarily to an increase in the Florida minimum wage (4.92%), which was effective January 1, 2012, and to increases in payroll taxes, including unemployment taxes. We anticipate that our payroll and related costs will increase throughout the balance of our fiscal year 2012 due primarily to payroll associated with the new restaurant location in Miami, Florida acquired by a limited partnership during the second quarter of our fiscal year 2012. Payroll and related costs as a percentage of total sales was 30.01% for the twenty six weeks ended April 2, 2011 and 29.77% of total sales for the twenty six weeks ended April 2, 2011.

Occupancy Costs. Occupancy costs (consisting of rent, common area maintenance, repairs, real property taxes and amortization of leasehold purchases) for the twenty six weeks ended March 31, 2012 increased $58,000 or 2.75% to $2,169,000 from $2,111,000 for the twenty six weeks ended April 2, 2011. Our occupancy costs increased primarily due to escalating rents at various locations and with rental payments for the new restaurant location in Miami, Florida acquired by a limited partnership, which commenced January 27, 2012, partially offset by the elimination of rent from a limited partnership owned restaurant located in the shopping center in Kendall, Florida which we purchased during the first quarter of our fiscal year 2012 and the elimination of rent paid for our combination restaurant and package liquor store located at 13205 Biscayne Boulevard, North Miami, Florida, the real property and building of which we purchased during the first quarter of our fiscal year 2011. We anticipate that our occupancy costs will increase throughout the balance of our fiscal year 2012 due to escalating rents at several locations and with rental payments for the new restaurant location in Miami, Florida, partially offset by the elimination of rent from a limited partnership owned restaurant.

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 twenty six weeks ended March 31, 2012 increased $277,000 or 3.77% to $7,621,000 from $7,344,000 for the twenty six weeks ended April 2, 2011. Selling, general and administrative expenses decreased as a percentage of total sales for the twenty six weeks ended March 31, 2012 to 19.26% as compared . . .