Rave Restaurant Group, Inc.

What they do

Rave franchises Pizza Inn pizza buffet, delivery/carry-out, express, ghost kitchen and PIE kiosk units, and Pie Five fast casual pizza and ghost kitchen units, and also licenses PIE kiosks. It earns revenue from franchise and license operations and facilitates food, equipment and supply distribution to its restaurant system through third-party distributors. At March 29, 2026, the system had 115 total Pizza Inn units (97 domestic including 82 buffets, and 18 international) and 14 domestic Pie Five units.

Revenue drivers

• Pizza Inn franchise system — The larger brand by units, with 97 domestic locations at March 29, 2026 including 82 buffet locations and 18 international units, driving franchise and distribution-related revenue.
• Pie Five — A smaller fast casual pizza brand with 14 domestic units as of March 29, 2026.
• Distribution and licensing — Rave facilitates food, equipment and supply distribution to domestic and international restaurants through third-party distributor agreements and licenses PIE kiosks, providing additional revenue streams to the franchise base.

Recent performance

For the third quarter of fiscal 2026 ended March 29, 2026, total revenue increased 8.7% to $3.2 million and net income rose 10.8% to $0.8 million; income before taxes increased 11.1% to $1.1 million and Adjusted EBITDA increased 16.4% to $1.1 million. Diluted net income per share was $0.06 versus $0.05 a year earlier. Pizza Inn domestic comparable store retail sales increased 2.3%, despite an estimated negative 3.3% impact from January weather, while Pie Five domestic comparable store retail sales decreased 11.6%. On March 29, 2026, cash and short-term investments totaled $12.0 million.

Strategy

Management is investing in Pizza Inn brand growth, adding a second franchise salesperson in the third quarter and a Director of Construction early in the fourth quarter, with thirteen restaurants under contract to open within the next three quarters including five under construction. The company views competitor pizza brand closures as an opportunity to gain market share and secure real estate for new buffet locations. It is innovating menus with limited time offers such as the Spam Luau pizza and Peeps Pizzert at Pizza Inn and the Chick'le Ranch pizza at Pie Five. Rave also ended its third-party delivery relationship with Uber Eats after a sharp fee increase in the quarter to protect franchisee profitability.

Risks

• Pie Five same-store sales decline — Pie Five domestic comparable store retail sales fell 11.6% in the third quarter of fiscal 2026, with only 14 domestic units remaining.
• Franchisee financial health — Management states the company is only as strong as its franchise system and continues to monitor franchisee profitability.
• Third-party delivery fee pressure — Rave ended its Uber Eats delivery relationship after a sharp fee increase, reflecting margin pressure from delivery platforms.
• Weather and macro headwinds — January weather had an estimated negative 3.3% same-store sales impact on Pizza Inn in the third quarter, and management described a tough restaurant industry sales environment.

Outlook

Management highlighted thirteen total restaurants under contract to open within the next three quarters, including five under construction, and said it is investing in future store growth from a solid financial footing. The company plans to continue menu innovation and partnership with franchisees on their financial health. No specific numeric guidance was provided in the release.