Flanigan's Leans on Partnerships for Growth, Franchising Stalls

Ticker: BDL · Form: 10-K · Filed: Dec 19, 2025 · CIK: 12040

Sentiment: mixed

Topics: Restaurant Industry, Liquor Retail, Franchising Model, Limited Partnerships, South Florida Market, Insider Ownership, Casual Dining

TL;DR

**BDL's reliance on insider-heavy limited partnerships for growth is a double-edged sword, offering capital efficiency but raising governance questions for new investors.**

AI Summary

Flanigan's Enterprises Inc. (BDL) operates 32 units, including restaurants and liquor stores, and franchises an additional 5 units as of September 27, 2025. The company's restaurant operations, primarily under the 'Flanigan's Seafood Bar and Grill' brand, account for approximately 79.67% of total restaurant sales, with bar sales making up the remaining 20.33%. BDL manages 10 restaurants through limited partnerships where it is the sole general partner, and 8 of these partnerships have fully returned initial cash investments to investors, leading to BDL receiving an annual management fee equal to one-half of available cash for distribution. The two newer limited partnerships, Store #85 (Sunrise, FL, opened March 2022) and Store #25 (Miramar, FL, opened April 2023), have not yet returned all cash invested. BDL also receives a 3% royalty on gross sales for the use of its service marks from these limited partnerships and franchisees. The company has not entered into new franchise agreements since 1986 and does not anticipate doing so in the foreseeable future, focusing instead on forming limited partnerships for future restaurant expansion.

Why It Matters

Flanigan's unique business model, heavily reliant on limited partnerships for restaurant expansion and management, offers a distinct risk/reward profile for investors. While this structure allows for capital raising without full equity dilution, it also introduces complexity and potential conflicts of interest given the significant involvement of officers and directors in these partnerships. For employees and customers, the consistent 'neighborhood casual' dining experience and 'Big Daddy's Liquors' discount model suggest stable operations, but the lack of new franchising indicates a mature, perhaps saturated, market for their current model. Competitively, this strategy allows BDL to expand its footprint in South Florida without bearing 100% of the capital expenditure, potentially giving it an edge in local market penetration against larger, more traditional chains.

Risk Assessment

Risk Level: medium — The risk level is medium due to the significant involvement of officers, directors, and their family members in the franchised units and limited partnerships. For example, two of the three franchised package liquor stores and four of the five franchised restaurants are franchised to family members of the Chairman of the Board, officers, and/or directors. Additionally, 33.3% of the limited partnership interest in the Surfside, Florida restaurant is owned by persons affiliated with officers, directors, or their family members, creating potential conflicts of interest.

Analyst Insight

Investors should scrutinize the financial performance and governance of the limited partnerships, particularly the distribution of profits and management fees, given the high insider ownership. A deeper dive into the specific terms of these partnership agreements and their impact on BDL's consolidated financials is crucial before making an investment decision.

Revenue Breakdown

SegmentRevenueGrowth
Restaurant Sales (Food)
Restaurant Sales (Bar)
Package Liquor Stores

Key Numbers

Key Players & Entities

FAQ

What is Flanigan's Enterprises Inc.'s primary business model for expansion?

Flanigan's Enterprises Inc. primarily expands its restaurant operations through forming limited partnerships, where it acts as the sole general partner for 10 out of 11 such entities. This strategy allows the company to raise capital from investors, including affiliated parties, to fund new restaurant openings like Store #85 in Sunrise, Florida, which opened in March 2022, and Store #25 in Miramar, Florida, which opened in April 2023.

How much of Flanigan's restaurant sales come from food versus bar sales?

For Flanigan's Enterprises Inc., food sales represent approximately 79.67% of total restaurant sales, while bar sales account for the remaining 20.33%. This indicates a strong emphasis on its 'Flanigan's Seafood Bar and Grill' dining experience.

What is the role of limited partnerships in Flanigan's financial structure?

Limited partnerships are crucial to Flanigan's financial structure, as they own and operate 11 'Flanigan's Seafood Bar and Grill' restaurants. Flanigan's Enterprises Inc. is the sole general partner in 10 of these, receiving a 3% royalty on gross sales and, once initial investments are returned, an annual management fee equal to one-half of the cash available for distribution.

When was the last time Flanigan's Enterprises Inc. entered into a new franchise agreement?

Flanigan's Enterprises Inc. has not entered into a new franchise arrangement for either a package liquor store, restaurant, or combination unit since 1986. The company explicitly states it does not anticipate doing so in the foreseeable future, indicating a shift in its growth strategy away from traditional franchising.

What are the potential conflicts of interest related to Flanigan's limited partnerships and franchises?

Potential conflicts of interest arise because members of the family of Flanigan's Chairman of the Board, officers, and/or directors own significant interests in both franchised units and limited partnerships. For example, 33.3% of the limited partnership interest in the Surfside, Florida restaurant is owned by affiliated persons, and two of the three franchised package liquor stores are franchised to family members.

How many units does Flanigan's Enterprises Inc. operate and franchise?

As of September 27, 2025, Flanigan's Enterprises Inc. operates 32 units, which include restaurants, package liquor stores, and combination units. Additionally, the company franchises an extra 5 units, bringing its total brand presence to 37 units.

What is the market value of Flanigan's voting stock held by non-affiliates?

As of March 28, 2025, the aggregate market value of the voting stock held by non-affiliates of Flanigan's Enterprises Inc. was approximately $21,031,000. This valuation is based on a closing price of $24.99 per share on the NYSE AMERICAN.

What are the main brands operated by Flanigan's Enterprises Inc.?

Flanigan's Enterprises Inc. primarily operates restaurants under the service marks 'Flanigan's Seafood Bar and Grill' or 'Flanigan's'. Its package liquor stores operate under the service marks 'Big Daddy's Liquors' or 'Big Daddy's Wine & Liquors'.

How does Flanigan's compensate itself from the limited partnerships it manages?

Flanigan's Enterprises Inc. receives a fee equal to 3% of gross sales for the use of its service marks from the limited partnerships. Once investors' initial cash investments are fully returned, Flanigan's also receives an annual management fee equal to one-half of the cash available for distribution by the limited partnership.

What is Flanigan's strategy for future restaurant growth?

Flanigan's Enterprises Inc. anticipates continuing to form limited partnerships to raise funds for owning and operating new restaurants under its 'Flanigan's Seafood Bar and Grill' service marks. This strategy leverages external capital while maintaining operational control as the general partner, as seen with the recent openings of Store #85 and Store #25.

Risk Factors

Industry Context

Flanigan's Enterprises operates in the highly competitive casual dining and retail liquor sectors. The casual dining segment faces ongoing challenges related to labor costs, food inflation, and changing consumer preferences. The package liquor store segment benefits from consistent demand but also experiences competition from both independent retailers and larger chains. The company's strategy of focusing on company-owned and limited partnership units rather than new franchising suggests a preference for greater control over operations and brand consistency in a mature market.

Regulatory Implications

As a food and beverage operator and retailer, BDL is subject to various health, safety, and licensing regulations at federal, state, and local levels. Compliance with food safety standards, alcohol service laws, and labor regulations is critical. Changes in these regulations, such as minimum wage increases or new food safety mandates, could impact operating costs and require adjustments to business practices.

What Investors Should Do

  1. Monitor performance of newer limited partnerships
  2. Analyze revenue drivers and margins
  3. Assess operational efficiency across diverse unit types

Key Dates

Glossary

General Partner
A partner in a partnership who is liable for the partnership's debts and obligations. (BDL is the sole general partner in 10 limited partnerships, giving it operational control but also potential liability.)
Limited Partnership
A partnership structure where some partners have limited liability and limited involvement in management. (BDL uses this structure for 10 of its restaurants, indicating a model for expansion and investment where BDL acts as the manager.)
Service Marks
A type of trademark that identifies and distinguishes the source of a service rather than a product. (BDL earns royalties from the use of its 'Flanigan's Seafood Bar and Grill', 'Big Daddy's Liquors', and other service marks by its limited partnerships and franchisees.)
Available Cash for Distribution
The cash generated by a partnership that is available to be paid out to its partners after operating expenses and debt service. (BDL receives an annual management fee equal to one-half of this amount from its limited partnerships where investors have fully recouped their initial investment.)
Gross Sales
The total amount of sales generated by a business before any deductions or returns. (BDL charges a 3% royalty on gross sales for restaurant service marks and 1% for liquor store service marks, making this a key metric for royalty revenue.)

Year-Over-Year Comparison

The provided 10-K excerpt does not contain comparative data from the previous fiscal year (September 28, 2024, vs. September 27, 2025). Therefore, a direct comparison of key metrics like revenue growth, margin changes, or the emergence of new risks cannot be made based solely on this information. The unit count for both company-owned/operated and franchised units remained unchanged year-over-year.

Filing Stats: 4,592 words · 18 min read · ~15 pages · Grade level 14.8 · Accepted 2025-12-19 16:57:24

Key Financial Figures

Filing Documents

Business

Business 1 Item 1A Risk Factors 11 Item 1B Unresolved Staff Comments 21 Item 1C Cybersecurity 21 Item 2

Properties

Properties 22 Item 3 Legal Proceedings 28 Item 4 Mine Safety Disclosures 28 PART II Item 5 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 29 Item 6 Reserved 29 Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations 29 Item 7A Quantitative and Qualitative Disclosures About Market Risk 37 Item 8 Financial 37 Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 37 Item 9A Controls and Procedures 38 Item 9B Other Information 39 Item 9C Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 39 PART III Item 10 Directors, Executive Officers and Corporate Governance 40 Item 11

Executive Compensation

Executive Compensation 40 Item 12

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 40 Item 13 Certain Relationships and Related Transactions, and Director Independence 40 Item 14 Principal Accountant Fees and Services 40 PART IV Item 15 Exhibits and Financial Statement Schedules 41 Item 16 Form 10 – K Summary 44

SIGNATURES

SIGNATURES 45 EXHIBIT INDEX LIST XBRL DOCUMENTS i As used in this Annual Report on Form 10-K, the terms "we," "us," "our," the "Company" and "Flanigan's" mean Flanigan's Enterprises, Inc. and its subsidiaries (unless the context indicates a different meaning). CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This annual report, including, without limitation, statements under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations," includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended ("Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act"). These forward-looking statements can be identified by the use of forward-looking terminology, including the words "believes," "estimates," "anticipates," "expects," "intends," "plans," "may," "will," "potential," "projects," "predicts," "continue," or "should," "could", "may", "might", "will" and "would" or, in each case, their negative or other variations or comparable terminology. There can be no assurance that actual results will not materially differ from expectations. Such statements include, but are not limited to, the general expansion of our business and other statements which are not statements of current or historical facts. The forward-looking statements contained in this annual report are based on our current expectations and beliefs concerning future developments and their potential effects on us. Future developments affecting us may not be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) and other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading "Risk Fac

BUSINESS

ITEM 1. BUSINESS General As of September 27, 2025, Flanigan's Enterprises, Inc., a Florida corporation, together with its subsidiaries ("we", "our", "ours" and "us" as the context requires), (i) operates 32 units, consisting of restaurants, package liquor stores, combination restaurant/package liquor stores and a sports bar that we either own or have operational control over and partial ownership in; and (ii) franchises an additional 5 units, consisting of 2 restaurants (one of which we operate) and 3 combination restaurant/package liquor stores. The table below provides information concerning the type (i.e. restaurant, sports bar, package liquor store or combination restaurant/package liquor store) and sole general partner and/or have invested in; or (iii) the unit is franchised by us), as of September 27, 2025 and as compared to September 28, 2024. With the exception of "The Whale's Rib," a restaurant we operate but do not own, and "Brendan's Sports Pub" a restaurant/bar we own, all of the restaurants operate under our service marks "Flanigan's Seafood Bar and Grill" or "Flanigan's" and all of the package liquor stores operate under our service marks "Big Daddy's Liquors" or "Big Daddy's Wine & Liquors". TYPES OF UNITS September 27, 2025 September 28, 2024 Company Owned: Combination package liquor store and restaurant 2 2 Restaurant only, including sports bar 9 9 Package liquor store only 9 9 Company Managed Restaurants Only: Limited partnerships 10 10 Franchise 1 1 Unrelated Third Party 1 1 Total Company Owned/Operated Units 32 32 Franchised Units 5 5 (1) Notes: (1) 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. 1 History and Development of Our Business We were incorporate

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