Quarterly Report for Quarter Ending December 27, 2025 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

CAUTIONARY NOTE REGARDING LOOKING FORWARD STATEMENTS

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 our periodic reports, including our Annual Report on Form 10-K for the fiscal year ended September 27, 2025. 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

As of December 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 five units, consisting of two restaurants (one of which we operate) and three 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 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 December 27, 2025 and as compared to September 27, 2025. 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".

		December 27, 2025				September 27, 2025
TYPES OF UNITS
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.

Franchise Financial Arrangement: In exchange for 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 store 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 of accounting. 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 as a return of capital. 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 cash available to the limited partnership, with the other one half (½) of available cash distributed to the investors (including us and our affiliates), as a profit distribution. As of December 27, 2025, all limited partnerships, with the exception of the limited partnership which owns the restaurant in Sunrise, Florida (Store #85), which opened for business in March 2022 and the limited partnership which owns the restaurant in Miramar, Florida (Store #25), which opened for business in April 2023, have returned all cash invested and we receive an annual management fee equal to one-half (½) of the cash available for distribution by the limited partnership. In addition to 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" or "Flanigan's".

RESULTS OF OPERATIONS

		Thirteen Weeks Ended
		December 27, 2025								December 28, 2024
		Amount								Amount
		(in thousands)				Percent				(in thousands)				Percent
Restaurant food sales		$	30,932				59.41			$	29,126				58.81
Restaurant bar sales			7,855				15.08				7,962				16.08
Package store sales			13,285				25.51				12,435				25.11
Total Sales		$	52,072				100.00			$	49,523				100.00
Franchise related revenues			438								431
Other revenues			58								41
Total Revenue		$	52,568							$	49,995

Comparison of Thirteen Weeks Ended December 27, 2025 and December 28, 2024.

Revenues.Total revenue for the thirteen weeks ended December 27, 2025 increased $2,573,000 or 5.15% to $52,568,000 from $49,995,000 for the thirteen weeks ended December 28, 2024 due primarily to increased package liquor store and restaurant sales and increased menu prices. Effective February 23, 2025, we increased our menu prices for our bar offerings to target an increase to our bar revenues of approximately 0.84% annually. Effective December 4, 2024, we increased our menu prices for our bar offerings to target an increase to our bar revenues of approximately 4.90% annually and effective November 17, 2024 we increased our menu prices for our food offerings to target an increase to our food revenues of approximately 4.14% annually (collectively the "Recent Price Increases").

Restaurant Food Sales. Restaurant revenue generated from the sale of food, including non-alcoholic beverages, at restaurants totaled $30,932,000 for the thirteen weeks ended December 27, 2025 as compared to $29,126,000 for the thirteen weeks ended December 28, 2024. The increase in restaurant food sales during the thirteen weeks ended December 27, 2025 as compared to restaurant food sales during the thirteen weeks ended December 28, 2024 is attributable to the Recent Price Increases and increased restaurant traffic. Comparable weekly restaurant food sales for restaurants open for all of the thirteen weeks ended December 27, 2025 and December 28, 2024 respectively, which consists of eleven restaurants owned by us and ten restaurants owned by affiliated limited partnerships was $2,356,000 and $2,221,000 for the thirteen weeks ended December 27, 2025 and December 28, 2024, respectively, an increase of 6.08%. Comparable weekly restaurant food sales for Company-owned restaurants was $1,070,000 and $995,000 for the thirteen weeks ended December 27, 2025 and December 28, 2024, respectively, an increase of 7.54%. Comparable weekly restaurant food sales for affiliated limited partnership owned restaurants only was $1,286,000 and $1,226,000 for the thirteen weeks ended December 27, 2025 and December 28, 2024, respectively, an increase of 4.89%. We expect that restaurant food sales, including non-alcoholic beverages, for the balance of our fiscal year 2026 will increase due to the increased restaurant traffic.

Restaurant Bar Sales. Restaurant revenue generated from the sale of alcoholic beverages at restaurants totaled $7,855,000 for the thirteen weeks ended December 27, 2025 as compared to $7,962,000 for the thirteen weeks ended December 28, 2024. The decrease in restaurant bar sales during the thirteen weeks ended December 27, 2025 is primarily due to the softening of alcohol consumption at our restaurants. Comparable weekly restaurant bar sales for restaurants open for all of the thirteen weeks ended December 27, 2025 and December 28, 2024 respectively, which consists of eleven restaurants owned by us and ten restaurants owned by affiliated limited partnerships was $604,000 and $612,000 for the thirteen weeks ended December 27, 2025 and December 28, 2024, respectively, a decrease of 1.31%. Comparable weekly restaurant bar sales for Company-owned restaurants only was $267,000 and $273,000 for the thirteen weeks ended December 27, 2025 and December 28, 2024, respectively, a decrease of 2.20%. Comparable weekly restaurant bar sales for affiliated limited partnership owned restaurants only was $337,000 and $340,000 for the thirteen weeks ended December 27, 2025 and December 28, 2024, a decrease of 0.88%.

Package Store Sales. Revenue generated from sales of liquor and related items at package liquor stores totaled $13,285,000 for the thirteen weeks ended December 27, 2025 as compared to $12,435,000 for the thirteen weeks ended December 28, 2024, an increase of $850,000. This increase was primarily due to increased package liquor store traffic, including e-commerce sales. The weekly average of same store package liquor store sales, which includes eleven (11) Company-owned package liquor stores was $1,022,000 and $957,000 for the thirteen weeks ended December 27, 2025 and December 28, 2024, respectively, an increase of 6.79%. We expect that package liquor store sales for the balance of our fiscal year 2026 will increase due to increased package liquor store traffic, including from e-commerce.

Costs and Expenses.Costs and expenses (consisting of cost of merchandise sold, payroll and related costs, operating expenses, occupancy costs, selling, general and administrative expenses and depreciation and amortization), for the thirteen weeks ended December 27, 2025 increased $1,656,000 or 3.36% to $50,899,000 from $49,243,000 for the thirteen weeks ended December 28, 2024. The increase was primarily due to increased payroll and operating expenses partially offset by actions taken by management to reduce and/or control costs. We anticipate that our costs and expenses will continue to increase through the balance of our fiscal year 2026. Costs and expenses decreased as a percentage of total revenue to approximately 96.83% for the thirteen weeks ended December 27, 2025 from 98.50% for the thirteen weeks ended December 28, 2024.

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 thirteen weeks ended December 27, 2025 increased to $25,836,000 from $24,059,000 for the thirteen weeks ended December 28, 2024. 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 66.61% for the thirteen weeks ended December 27, 2025 as compared to 64.87% for the thirteen weeks ended December 28, 2024 due primarily to the Recent Price Increases and certain lower food costs.

Package Store Sales. Gross profit for package store sales for the thirteen weeks ended December 27, 2025 increased to $3,320,000 from $2,954,000 for the thirteen weeks ended December 28, 2024. Our gross profit margin (calculated as gross profit reflected as a percentage of package liquor store sales), for package store sales was 24.99% for the thirteen weeks ended December 27, 2025 and 23.76% for the thirteen weeks ended December 28, 2024. We anticipate that the gross profit margin for package liquor store merchandise will increase slightly for the balance of our fiscal 2026.

Payroll and Related Costs.Payroll and related costs for the thirteen weeks ended December 27, 2025 increased $625,000 or 3.97% to $16,371,000 from $15,746,000 for the thirteen weeks ended December 28, 2024. Payroll and related costs for the thirteen weeks ended December 27, 2025 were higher due primarily to the increase to the Florida minimum wage. Payroll and related costs as a percentage of total revenue was 31.14 % for the thirteen weeks ended December 27, 2025 and 31.50% of total revenue for the thirteen weeks ended December 28, 2024.

Operating Expenses.Operating expenses (including but not limited to utilities, insurance, cleaning, credit card fees, supplies, security, and other costs closely related to operating restaurant and package stores) for the thirteen weeks ended December 27, 2025 increased $481,000 or 7.40% to $6,985,000 from $6,504,000 for the thirteen weeks ended December 28, 2024 due primarily to inflation and increases in expenses across all categories.

Occupancy Costs.Occupancy costs (consisting of percentage rent, common area maintenance, repairs, real property taxes, amortization of leasehold interests and rent expense associated with operating lease liabilities under ASC 842) for the thirteen weeks ended December 27, 2025 increased $156,000 or 8.39% to $2,015,000 from $1,859,000 for the thirteen weeks ended December 28, 2024.

Selling, General and Administrative Expenses.Selling, general and administrative expenses (consisting of general corporate expenses, including but not limited to advertising, professional costs, clerical and administrative overhead) for the thirteen weeks ended December 27, 2025 decreased $62,000 or 4.19% to $1,416,000 from $1,478,000 for the thirteen weeks ended December 28, 2024 due primarily to lower consulting fees. Selling, general and administrative expenses decreased as a percentage of total revenue for the thirteen weeks ended December 27, 2025 to 2.69% as compared to 2.96% for the thirteen weeks ended December 28, 2024.

Depreciation and Amortization. Depreciation and amortization expense for the thirteen weeks ended December 27, 2025 increased $50,000 or 4.36% to $1,196,000 from $1,146,000 for the thirteen weeks ended December 28, 2024. Depreciation and amortization decreased as a percentage of total revenue for the thirteen weeks ended December 27, 2025 to 2.28% as compared to 2.29% for the thirteen weeks ended December 28, 2024.

Interest Expense, Net.Interest expense, net, for the thirteen weeks ended December 27, 2025 increased $3,000 to $253,000 from $250,000 for the thirteen weeks ended December 28, 2024.

Rental Income / Rental Expense. Rental income was $277,000 and rental expense was $134,000 for the thirteen weeks ended December 27, 2025, while rental income was $267,000 and rental expense was $161,000 for the thirteen weeks ended December 28, 2024. Previously, rental income was presented in Revenues and rental expense was presented in Occupancy costs, Operating expenses and Selling, general and administrative expenses, however, both rental income and rental expense are now presented in Other Income.

Income Taxes. Income tax expense for the thirteen weeks ended December 27, 2025 was $128,000 compared to $35,000 for the thirteen weeks ended December 28, 2024. This is primarily due to the tax expense that is anticipated based on the projected pre-tax income and permanent differences.

Net Income.Net income for the thirteen weeks ended December 27, 2025 increased $867,000 or 137.18% to $1,499,000 from $632,000 for the thirteen weeks ended December 28, 2024 due primarily to the Recent Price Increases, partially offset by overall increased expenses. As a percentage of revenue, net income for the thirteen weeks ended December 27, 2025 is 2.85% as compared to 1.26% for the thirteen weeks ended December 28, 2024.

Net Income Attributable to Flanigan's Enterprises, Inc. Stockholders.Net income attributable to Flanigan's Enterprises, Inc.'s stockholders for the thirteen weeks ended December 27, 2025 increased $750,000 or 1,363.64% to $805,000 from $55,000 for the thirteen weeks ended December 28, 2024 due primarily to the Recent Price Increases, partially offset by overall increased expenses. As a percentage of revenue, net income attributable to stockholders for the thirteen weeks ended December 27, 2025 is 1.53% as compared to 0.11% for the thirteen weeks ended December 28, 2024.

Menu Price Increases and Trends

During the second quarter of our fiscal year, 2025, we increased our menu prices for our bar offerings (effective February 23, 2025) to target an increase to our bar revenues of approximately 0.84% annually to offset higher food and liquor costs and higher overall expenses. During the first quarter of our fiscal year 2025, we increased our menu prices for our bar offerings (effective December 4, 2024) to target an increase to our bar revenues of approximately 4.90% annually and we increased our menu prices for our food offerings (effective November 17, 2024) to target an increase to our food revenues of approximately 4.14% annually to offset higher food and liquor costs and higher overall expenses. Prior to these increases we previously raised menu prices in the fourth quarter of our fiscal year 2024.

Liquidity and Capital Resources

We fund our operations through cash from operations and borrowings from third parties. As of December 27, 2025, we had cash and cash equivalents of approximately $22,967,000, an increase of $2,873,000 from our cash balance of $20,094,000 as of September 27, 2025. This increase is primarily due to the timing of cash receipts related to our holiday promotion.

In the fourth quarter of our fiscal year 2025, we paid $2.2 million for the purchase of undeveloped land in Cutler Bay, Florida for a future restaurant site. This acquisition reflects our ongoing investment in strategic expansion. While no construction has commenced as of the reporting date, site planning has begun and management anticipates capital expenditures related to site development and build-out in future fiscal quarters.

Inflation is affecting all aspects of our operations, including but not limited to food, beverage, fuel and labor costs. Supply chain issues also contribute to inflation. Inflation is having a material impact on our operating results.

We believe that our current cash availability from our cash on hand and positive cash flow from operations will be sufficient to fund our operations and planned capital expenditures for at least the next twelve months.

Cash Flows

The following table is a summary of our cash flows for the thirteen weeks ended December 27, 2025 and December 28, 2024.

		Thirteen Weeks Ended
		December 27, 2025				December 28, 2024
		(in thousands)
Net cash provided by operating activities		$	4,945			$	7,701
Net cash used in investing activities			(887	)			(703	)
Net cash used in financing activities			(1,185	)			(1,078	)
Net Increase in Cash and Cash Equivalents			2,873				5,920
Cash and Cash Equivalents, Beginning			20,094				21,402
Cash and Cash Equivalents, Ending		$	22,967			$	27,322

We did not declare or pay a cash dividend on our capital stock in the first quarter of our fiscal year 2026 or the first quarter of our fiscal year 2025. Any future determination to pay cash dividends will be at our Board's discretion and will depend upon our financial condition, operating results, capital requirements and such other factors as our Board deems relevant.

Capital Expenditures

In addition to using cash for our operating expenses, we use cash generated from operations and borrowings to fund the development and construction of new restaurants and to fund capitalized property improvements for our existing restaurants. During the thirteen weeks ended December 27, 2025, we acquired property and equipment of $595,000, (of which $32,000 was purchase deposits transferred to property and equipment), including $86,000 for renovations to three Company-owned locations. During the thirteen weeks ended December 28, 2024, we acquired property and equipment of $745,000, (of which $9,000 was purchase deposits transferred to property and equipment), including $87,000 for renovations to one (1) Company-owned package location.

We anticipate the cost of refurbishment in our fiscal year 2026 will be approximately $750,000, although capital expenditures for our refurbishing program for fiscal year 2026 may be significantly higher.

Long-Term Debt

As of December 27, 2025, we had long-term debt (including the current portion) of $20,260,000, as compared to $20,618,000 as of September 27, 2025.

During the first quarter of our fiscal year 2026, we refinanced with our institutional lender, our mortgage loan encumbering the real property and improvements located at 12750 - 12790 S.W. 88th Street, Miami, Florida where our Flanigan's Calusa Center and our limited partnership owned Flanigan's Seafood Bar and Grill restaurant operate (Store #70), without increasing the principal amount borrowed at this time ($5,676,856). The refinanced mortgage loan earns interest at a fluctuating rate per year equal to the sum of (i) the greater of the Term SOFR Daily Floating Rate or the Index Floor (which for purposes hereof is 0.00%) and (ii) 2.25%, with the first payment of principal and interest due January 31, 2026 and monthly thereafter on the last day of each month until November 30, 2030 when the entire principal payment and all accrued interest is due in full. We received no excess funds from the refinancing of this mortgage loan.

As of December 27, 2025, we are in compliance with all of the covenants contained in our loan agreements.

Purchase Commitments

In order to fix the cost and ensure adequate supply of baby back ribs for our restaurants for calendar year 2026, we entered into a purchase agreement with our existing rib supplier, whereby we agreed to purchase approximately $9.2 million of "2.5 & Down Baby Back Ribs" (weight range in which baby back ribs are sold) during calendar year 2026, at a prescribed cost, which we believe is competitive. For calendar year 2025, we entered into a purchase agreement with a new rib supplier, whereby we agreed to purchase approximately $7.8 million of "2.5 & Down Baby Back Ribs" during calendar year 2025, at a prescribed cost, which we believed was competitive. The increase in our cost of baby back ribs for calendar year 2026 compared to calendar year 2025 is due to an increase in market price and quantity ordered.

While we anticipate purchasing all of our rib supply from our current rib vendor, we believe there are several other alternative vendors available, if needed.

Master Service Agreement

During the first quarter of our fiscal year 2025, we entered into a new Master Services Agreement with our current major vendor for a period of one (1) year effective January 1, 2025, with Company options for four (4) one (1) year renewal options to extend the term of the same. In this new Master Service Agreement, as in our prior Master Service Agreements, we commit to purchase specific products through our current major vendor but are free to purchase other products through other vendors, provided no less than 80% of our overall product needs are purchased through our current major vendor. During the fourth quarter of our fiscal year 2025, we exercised the first one (1) year renewal option and extended the term of the Master Services Agreement for a period of one (1) year effective January 1, 2026.

Working Capital

The table below summarizes the current assets, current liabilities, and working capital for our fiscal quarter ended December 27, 2025, and our fiscal year ended September 27, 2025.

Item		December 27, 2025				September 27, 2025
		(in thousands)
Current Assets		$	33,045			$	30,593
Current Liabilities			20,064				18,118
Working Capital		$	12,981			$	12,475

While there can be no assurance due to, among other things, unanticipated expenses or unanticipated decline in revenues, or both, we believe that our cash on hand and positive cash flow from operations will adequately fund operations, debt reductions and planned capital expenditures throughout our fiscal year 2026.

Off-Balance Sheet Arrangements

The Company does not have off-balance sheet arrangements.

Critical Accounting Policies and Estimates

We describe our significant accounting policies in Note 1. "Summary of Significant Accounting Policies" of our consolidated financial statements included in Item 8. "Financial Statements and Supplementary Data" of our Annual Report on Form 10-K for the fiscal year ended September 27, 2025.

Critical accounting estimates are those that we believe are both significant and require us to make difficult, subjective or complex judgments, often because we need to estimate the effect of inherently uncertain matters. We base our estimates and judgments on historical experiences and other assumptions that we believe are reasonable under the circumstances and we evaluate these estimates on an ongoing basis. Actual results may differ from these estimates and we might obtain different estimates if we use different assumptions or factors.

Leases

We currently lease a portion of our restaurant and package locations under various lease agreements. Determining the probable term for each lease requires judgment by management and can impact the classification and accounting for a lease as financing or operating, as well as the period for straight-lined rent expense and the depreciation period for leasehold improvements. Generally, the lease term is a minimum of the noncancelable period of the lease or the lease term inclusive of reasonably certain renewal periods up to a term of 15 years. If the estimate of our reasonably certain lease term was changed, our depreciation and rent expense could differ materially. To determine the present value of lease payments not yet paid, we estimate incremental borrowing rates (IBR) corresponding to the reasonably certain lease term. The IBR is an estimate based on several factors, including financial market conditions, comparable company and credit analysis as well as management judgment. If the IBR was changed, our operating lease right-of-use assets and lease liabilities could differ materially.

Estimated Useful Lives of Property and Equipment

The estimates of useful lives for property and equipment are significant estimates. Expenditures for the leasehold improvements and equipment when a restaurant is first constructed are material. In addition, periodic refurbishing takes place and those expenditures can be material. We estimate the useful life of those assets by considering, among other things, expected use, life of the lease on the building, and warranty period, if applicable. The assets are then depreciated using a straight-line method over those estimated lives. These estimated lives are reviewed periodically and adjusted if necessary. Any necessary adjustment to depreciation expense is made in the income statement of the period in which the adjustment is determined to be necessary.

Valuation of Long-Lived Assets

We continually evaluate whether events and circumstances have occurred that may warrant revision of the estimated life of our intangible and other long-lived assets and/or whether the remaining balance of our intangible and other long-lived assets should be evaluated for possible impairment. If and when such factors, events or circumstances indicate that intangible and/or other long-lived assets should be evaluated for possible impairment, we will determine the fair value of the asset by making an estimate of expected future cash flows over the remaining lives of the respective assets and compare that fair value with the carrying value of the assets in measuring their recoverability. In determining the expected future cash flows, the assets will be grouped at the lowest level for which there are cash flows, at the individual store level.

Income Taxes

We account for our income taxes using FASB ASC Topic 740, "Income Taxes", which 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 tax credits to the extent that realization of said tax benefits is more likely than not. For discussion regarding our carryforwards refer to Note 10 in the consolidated financial statements for our fiscal year 2025.

Inflation

The primary inflationary factors affecting our operations are food, beverage and labor costs. A large number of restaurant personnel are paid at rates based upon applicable minimum wage and increases in minimum wage directly affect labor costs. Inflation is having a material impact on our operating results, especially rising food, fuel and labor costs. We have endeavored to offset the adverse effects of cost increases by increasing our menu prices.