RAVE RESTAURANT GROUP, INC.
For the period ended Jun 29, 2025. Filed Sep 25, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Sep 25, 2025
RAVE$2.12-0.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-06-30; filed 2024-09-26.
0001140361-24-041977
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-K
Period ended 2025-06-29; filed 2025-09-25.
0001140361-25-036080
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 77 previous paragraphs and 85 current paragraphs.
46 unchanged; 25 reworded; 14 added; 6 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 18 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
A comparison of our results of operations and cash flows for fiscal year 2024 compared to fiscal year 2023 can be found under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2024, filed with the SEC on September 26, 2024.
Current report
“EBITDA” represents earnings before interest, taxes, depreciation and amortization.
Current report
“Adjusted EBITDA” represents earnings before interest, taxes, depreciation and amortization, stock-based compensation expense, severance, gain/loss on sale of assets, costs related to impairment and other lease charges, franchisee default and closed store revenue/expense, and closed and non-operating store costs.
Current report
“Retail sales” represents the restaurant sales reported by our franchisees, which may be segmented by brand or domestic/international locations.
Current report
“Comparable store retail sales” includes the retail sales for restaurants that have been open for at least 18 months as of the end of the reporting period. The sales results for a restaurant that was closed for more than seven days for remodeling or relocation within the same trade area are not included in the calculation.
Current report
“Average units open” reflects the number of restaurants open during a reporting period weighted by the percentage of the days in a reporting period that each restaurant was open.
Current report
“Franchisee default and closed store revenue/expense” represents the net of accelerated revenues and costs attributable to defaulted area development agreements and closed franchised stores.
Current report
“Closed and non-operating store costs” represent gain or loss on asset disposal, store closure expenses, lease termination expenses and expenses related to abandoned store sites.
Current report
Provision (Recovery) for Credit Losses
Current report
Interest Income
Current report
Depreciation and Amortization Expense
Current report
Depreciation and amortization expense decreased by $37 thousand for fiscal 2025 to $182 thousand compared to $219 thousand in the prior year. The decrease was primarily the result of lower depreciation of equipment due to an overall decrease in capital expenditures.
Current report
Earnings per Share
Current report
EBITDA and Adjusted EBITDA
Removed paragraphs (6)
Previous report
Impairment of Long-lived Assets and Other Lease Charges
Previous report
Impairment of long-lived assets and other lease charges was zero for fiscal 2024 compared to $5 thousand for fiscal 2023. The decrease was primarily due to impaired beverage equipment in the prior period.
Previous report
Provision for Credit Losses
Previous report
Interest Expense and Income
Previous report
Amortization and Depreciation Expense
Previous report
Amortization and depreciation expense increased slightly for fiscal 2024, compared to fiscal 2023. The increase was primarily the result of higher amortization of intangible assets from an increase in expenditures for developing a new prototype.
Reworded paragraphs (25)
Previous wording
The Company franchises pizza buffet (“Buffet Units”), delivery/carry-out (“Delco Units”), express (“Express Units”) restaurants and ghost kitchens (“Pizza Inn Ghost Kitchen Units”) under the trademark “Pizza Inn” and franchises fast casual pizza restaurants (“Pie Five Units”) and ghost kitchens (“Pie Five Ghost Kitchen Units”) under the trademarks “Pie Five Pizza Company” or “Pie Five”. The Company also licenses Pizza Inn Express, or PIE, kiosks (“PIE Units”) under the trademark “Pizza Inn”. We facilitate food, equipment and supply distribution to our domestic and international system of restaurants through agreements with third party distributors. At June 30, 2024, franchised and licensed restaurants consisted of the following:
Current wording
The Company franchises pizza buffet (“Buffet Units”), delivery/carry-out (“Delco Units”), express restaurants (“Express Units”) and ghost kitchens (“Pizza Inn Ghost Kitchen Units”) under the trademark “Pizza Inn” and franchises fast casual pizza restaurants (“Pie Five Units”) and ghost kitchens (“Pie Five Ghost Kitchen Units”) under the trademarks “Pie Five Pizza Company” or “Pie Five”. The Company also licenses Pizza Inn Express, or PIE, kiosks (“PIE Units”) under the trademark “Pizza Inn”. We facilitate food, equipment and supply distribution to our domestic and international system of restaurants through agreements with third-party distributors. At June 29, 2025, franchised and licensed restaurants consisted of the following:
Previous wording
Fiscal years 2024 and 2023 included 53 weeks and 52 weeks, respectively. In order to reflect comparable 53 week periods, the first week of fiscal 2024 has been included in both periods in the presentation of retail sales, average units open and comparable store retail sales.
Current wording
Fiscal years 2025 and 2024 included 52 and 53 weeks, respectively. In order to reflect comparable 53-week periods, week 53 of fiscal 2024 has been included in both periods in the presentation of retail sales, average units open and comparable store retail sales.
Previous wording
Pizza Inn total domestic retail sales increased by $3.9 million, or 3.8%, for fiscal 2024 when compared to the prior 53 weeks. Compared to the prior year, average Buffet Units open in the period increased from 73 to 76. Comparable store retail sales increased by $2.3 million to $100.9 million for fiscal 2024 as compared to the prior 53 weeks. For fiscal 2024, the increase in domestic retail sales were primarily the result of the increase in Buffet Units, supplemented by an increase in comparable domestic store retail sales.
Current wording
Pizza Inn total domestic retail sales increased by $2.0 million, or 1.9%, for fiscal 2025 when compared to the prior 53 weeks. Compared to the prior year, average Buffet Units open in the period increased from 76 to 77. Comparable store retail sales increased by $1.9 million to $104.7 million for fiscal 2025 as compared to the prior 53 weeks. For fiscal 2025, the increase in domestic retail sales were primarily the result of the increase in Buffet Units, supplemented by an increase in comparable domestic store retail sales.
Previous wording
There was a net decrease of 18 units in the total domestic Pizza Inn unit count during fiscal 2024. There were four transfers in the total domestic Pizza Inn unit count during fiscal 2024. For fiscal 2024, the number of international Pizza Inn units decreased by 10 units. Twelve units were terminated in Saudi Arabia for failure to pay royalties and subsequently a 50-unit development agreement was signed with a new franchise partner who opened five Pizza Inn units in Saudi Arabia in fiscal year 2024. There were zero transfers in the total international Pizza Inn unit count during fiscal 2024. The Company believes the number of both domestic and international Pizza Inn units will increase modestly in future periods.
Current wording
There was a net decrease of nine units in the total domestic Pizza Inn unit count during fiscal 2025. There were five transfers in the total domestic Pizza Inn unit count during fiscal 2025. For fiscal 2025, the number of international Pizza Inn units decreased by two units. Eight units in Oman were closed following the non-renewal of their franchise agreement. There were zero transfers in the total international Pizza Inn unit count during fiscal 2025. The Company believes the number of both domestic and international Pizza Inn units will increase modestly in future periods.
Previous wording
Pie Five total domestic retail sales decreased by $3.5 million, or 17.2%, for fiscal 2024 when compared to the prior year. Compared to the prior year, average units open in the period decreased from 30 to 25. Comparable store retail sales decreased by $0.6 million to $16.8 million for fiscal 2024 as compared to the prior year. For fiscal 2024, the decrease in domestic retail sales were primarily the result of the decrease in store count, supplemented by a decrease in comparable store retail sales.
Current wording
Pie Five total domestic retail sales decreased by $5.6 million, or 33.2%, for fiscal 2025 when compared to the prior year. Compared to the prior year, average units open in the period decreased from 25 to 20. Comparable store retail sales decreased by $1.0 million to $11.0 million for fiscal 2025 as compared to the prior year. For fiscal 2025, the decrease in domestic retail sales were primarily the result of the decrease in store count, supplemented by a decrease in comparable store retail sales. The highest-volume Pie Five unit closed during the last week of fiscal 2024. This location accounted for approximately 13.6% of Pie Five's total domestic retail sales for fiscal 2024.
Previous wording
The was a net decrease of seven units in the total domestic Pie Five unit count during fiscal 2024. There was a net increase of one Pie Five Ghost Kitchen Units during fiscal 2024. Two Pie Five units converted to become Pizza Inn Buffet units. Of the seven Pie Five closures, two were due to lease expirations, one was closed by mutual decision of the franchise owner and Rave management, and four were unilaterally closed by franchise owner decision. We believe that Pie Five units will decrease modestly in future periods.
Current wording
The was a net decrease of three units in the total domestic Pie Five unit count during fiscal 2025. There was a net decrease of one Pie Five Ghost Kitchen Unit during fiscal 2025. One Pie Five unit converted to become a Pizza Inn Buffet unit. We believe that Pie Five units will decrease modestly in future periods.
Previous wording
The Company defines its operating segments as Pizza Inn Franchising and Pie Five Franchising. The following is additional business segment information for the Fiscal Years ended June 30, 2024 and June 25, 2023 (in thousands):
Current wording
In addition to Corporate overhead support, the Company defines its operating segments as Pizza Inn Franchising and Pie Five Franchising. The following is additional business segment information for the Fiscal Years ended June 29, 2025 and June 30, 2024 (in thousands):
Previous wording
Revenues are derived from franchise royalties, supplier and distributer incentives, franchise license fees, area development exclusivity fees and foreign master license fees, advertising funds, supplier convention funds, sublease rental income, and other income. The volume of supplier incentive revenues is dependent on the level of chain-wide retail sales, which are impacted by changes in comparable store sales and restaurant count, as well as the products sold to franchisees through third-party food distributors.
Current wording
Revenues are derived from franchise royalties, supplier and distributor incentives, franchise license fees, area development exclusivity fees and foreign master license fees, advertising fund contributions, supplier convention funds, rental income, and other income. The volume of supplier and distributor incentive revenues is dependent on the level of total retail sales, which are impacted by changes in comparable store sales and restaurant count, as well as the products sold to franchisees through third-party food distributors.
Previous wording
Total revenues for fiscal 2024 and fiscal 2023 were $12.2 million and $11.9 million, respectively.
Current wording
Total revenues for fiscal 2025 and fiscal 2024 were $12.0 million and $12.2 million, respectively.
Previous wording
Pizza Inn franchise revenues increased by $0.5 million to $10.3 million for fiscal 2024 as compared to $9.8 million for fiscal 2023. The 4.9% increase was driven by increases in supplier and distributor incentives.
Current wording
Pizza Inn franchise revenues increased by $0.5 million to $10.8 million for fiscal 2025 as compared to $10.3 million for fiscal 2024. The 4.8% increase was driven by increased advertising fund revenues due to an increase in the average contribution rate from new stores and expiring rate abatements from existing stores and increased supplier and distributor incentives under the terms of new contracted pricing.
Previous wording
Pie Five franchise revenues decreased by $0.2 million to $1.7 million for fiscal 2024 as compared to $1.9 million for fiscal 2023. The 8.7% decrease was driven by decreases in domestic royalties and advertising fund revenues, offset by increases in default and closed store revenues.
Current wording
Pie Five franchise revenues decreased by $0.5 million to $1.2 million for fiscal 2025 as compared to $1.7 million for fiscal 2024. The 30.7% decrease was driven by decreases in domestic royalties related to a decrease in system-wide sales.
Previous wording
Total general and administrative expenses decreased by $0.2 million to $5.3 million for fiscal 2024 as compared to $5.5 million for fiscal 2023. The 4.1% decrease was driven by decreased salary and stock-based compensation expense.
Current wording
Total general and administrative expenses decreased by $0.1 million to $5.2 million for fiscal 2025 as compared to $5.3 million for fiscal 2024. The 1.0% decrease was driven by decreases in recruiting fees, offset by increases in salaries.
Previous wording
Franchise expenses include general and administrative expenses directly related to the sale and continuing service of domestic and international franchises. Total franchise expenses decreased by $0.3 million to $3.7 million in fiscal 2024 as compared to $4.0 million for fiscal 2023. Pizza Inn franchise expenses decreased $0.1 million to $3.0 million for fiscal 2024 compared to $3.1 million for fiscal 2023. The 2.4% decrease was driven by decreases in advertising fees. Pie Five franchise expenses decreased $0.2 million to $0.7 million for fiscal 2024 compared to $0.9 million for fiscal 2023. The 25.2% decrease was driven by decreases in advertising fees and salaries.
Current wording
Franchise expenses include general and administrative expenses directly related to the sale and continuing service of domestic and international franchises. Total franchise expenses decreased by $0.3 million to $3.4 million in fiscal 2025 as compared to $3.7 million for fiscal 2024. Pizza Inn franchise expenses remained relatively stable at $3.0 million for fiscal 2025 as compared to fiscal 2024. The 0.4% increase was driven by increases in advertising fees, offset by decreases in salaries directly related to franchise operations. Pie Five franchise expenses decreased $0.3 million to $0.4 million for fiscal 2025 compared to $0.7 million for fiscal 2024. The 40.4% decrease was driven by decreases in salaries directly related to franchise operations and advertising fees.
Previous wording
The Company monitors franchisee receivable balances and adjusts credit terms when necessary to minimize the Company’s exposure to high risk accounts receivable. Provision for credit losses decreased by $4 thousand to $69 thousand for fiscal 2024 as compared to $73 thousand for fiscal 2023. The 4.7% decrease was driven by the write-off of bad debt, partially offset by the increase in accounts over 90 days.
Current wording
The Company monitors franchisee receivable balances and adjusts credit terms when necessary to minimize the Company’s exposure to high-risk accounts receivable. For fiscal 2025, recoveries for credit losses were $21 thousand compared to provision for credit losses of $69 thousand for fiscal 2024. During fiscal 2025, the Company recorded a gain in provision for credit losses due to the recoveries of receivables that had been previously reserved, partially offset by losses due to write offs of receivables.
Previous wording
Interest expense decreased $1 thousand for fiscal 2024 to zero compared to $1 thousand in the prior year. Interest income increased $153 thousand for fiscal 2024 to $153 thousand compared to zero in the prior year. The increase was primarily driven by interest received on U.S. Treasury bills.
Current wording
Interest income increased by $201 thousand for fiscal 2025 to $354 thousand compared to $153 thousand in the prior year. The increase was primarily driven by interest received on short-term investments, all of which were U.S. Treasury bills.
Previous wording
For the year ended June 30, 2024, the Company recorded an income tax expense of $619 thousand. The federal and state tax expense was $530 thousand and $89 thousand, respectively. The change in both federal and state tax expense was primarily driven by the increase in net income, utilization of jurisdictional operating losses and a current year tax deduction for stock-based compensation. The Company utilized net operating losses to offset federal taxes. At the end of tax year ended June 30, 2024, the Company had federal net operating loss carryforwards totaling $18.9 million that are available to reduce future taxable income and will begin to expire in 2035. Under the Tax Cuts and Jobs Act, approximately $1.3 million of the loss carryforwards are limited to 80% and do not expire. Tax years that remain subject to examination by the IRS are the years ended June 28, 2021 through June 25, 2023. Tax years that remain subject to examination by state authorities are the years ended June 30, 2020 through June 25, 2023.
Current wording
For the year ended June 29, 2025, the Company recorded an income tax expense of $918 thousand. The federal and state tax expense was $793 thousand and $125 thousand, respectively. The increase was primarily driven by increases in federal taxes, primarily due to higher taxable income and fewer discrete tax items related to restricted stock units vesting in the prior year. The Company utilized net operating losses to offset federal taxes payable. At the end of tax year ended June 29, 2025, the Company had federal net operating loss carryforwards totaling $16 million that are available to reduce future taxable income and will begin to expire in 2035. Under the Tax Cuts and Jobs Act, approximately $1.3 million of the loss carryforwards are limited to 80% and do not expire. Tax years that remain subject to examination by the IRS are the years ended June 28, 2022 through June 30, 2024. Tax years that remain subject to examination by state authorities are the years ended June 30, 2021 through June 30, 2024.
Previous wording
Basic net income per common share increased $0.06 to net income of $0.17 per share for fiscal 2024 compared to a net income of $0.11 per share in the prior fiscal year. Diluted net income per common share increased $0.07 to net income of $0.17 per share for fiscal 2024 compared to a net income of $0.10 per share in the prior fiscal year. Net income increased $0.9 million to net income of $2.5 million for fiscal 2024 compared to a net income of $1.6 million for the prior fiscal year on revenues of $12.2 million for fiscal 2024 as compared to $11.9 million in fiscal 2023.
Current wording
Basic net income per common share increased $0.02 per share to $0.19 per share for fiscal 2025 compared to $0.17 per share in the prior fiscal year. Diluted net income per common share increased $0.02 per share to $0.19 per share for fiscal 2025 compared to $0.17 per share in the prior fiscal year. Net income increased $0.2 million to net income of $2.7 million for fiscal 2025 compared to a net income of $2.5 million for the prior fiscal year on revenues of $12.0 million for fiscal 2025 as compared to $12.2 million in fiscal 2024.
Previous wording
Adjusted EBITDA for the fiscal year ended June 30, 2024, increased to $3.2 million compared to $2.7 million for the prior fiscal year. The following table sets forth a reconciliation of net income to EBITDA and Adjusted EBITDA for the periods shown (in thousands):
Current wording
Adjusted EBITDA for the fiscal year ended June 29, 2025, increased to $3.6 million compared to $3.2 million for the prior fiscal year. The following table sets forth a reconciliation of net income to EBITDA and Adjusted EBITDA for the periods shown (in thousands):
Previous wording
Results of operations for the fiscal years 2024 and 2023 included 53 weeks and 52 weeks, respectively.
Current wording
Results of operations for the fiscal years 2025 and 2024 included 52 and 53 weeks, respectively.
Previous wording
Cash flows from operating activities generally reflect net income adjusted for certain non-cash items including depreciation and amortization, changes in deferred taxes, stock-based compensation, and changes in working capital. Cash provided by operating activities was $2.7 million in fiscal 2024 compared to cash provided by operating activities of $2.6 million in fiscal 2023. The primary driver of increased operating cash flow during fiscal 2024 was increased net income due to lower employee related expenses.
Current wording
Cash flows from operating activities generally reflect net income adjusted for certain non-cash items including depreciation and amortization, changes in deferred taxes, stock-based compensation, short-term investment discount amortization, and changes in working capital. Cash provided by operating activities was $3.4 million in fiscal 2025 compared to cash provided by operating activities of $2.8 million in fiscal 2024. The primary driver of increased operating cash flow during fiscal 2025 was increased collections of accounts receivable related to the payment of franchise receivables.
Previous wording
Cash flows from investing activities reflect purchases and maturities of short term investments as well as net proceeds from the sale of assets and capital expenditures for the purchase of Company assets. Cash used in investing activities during fiscal 2024 was $4.9 million compared to cash used in investing activities of $15 thousand in fiscal 2023.
Current wording
Cash flows from investing activities reflect purchases and maturities of short-term investments as well as net proceeds from the sale of assets and capital expenditures for the purchase of Company assets. Cash used in investing activities during fiscal 2025 was $2.0 million compared to cash used in investing activities of $4.9 million in fiscal 2024. Net cash used in investing activities in fiscal 2025 was primarily attributable to increased activity related to the purchase and redemption of short-term investments.
Previous wording
Cash flows used in financing activities generally reflect changes in the Company’s stock and debt activity during the period. Net cash used in financing activities was $0.3 million for fiscal 2024 compared to net cash used in financing activities of $5.0 million for fiscal 2023. Netcash used by financing activities in fiscal 2024 was primarily attributable to taxes paid on vested Restricted Stock Units (“RSUs”). Net cash used by financing activities in fiscal 2023 was primarily attributable to repurchases of the Company’s stock.
Current wording
Cash flows used in financing activities generally reflect changes in the Company's stock and debt activity during the period. Net cash used in financing activities was $1.4 million for fiscal 2025 compared to net cash used in financing activities of $0.3 million for fiscal 2024. Netcash used by financing activities in fiscal 2025 was primarily attributable to repurchases of the Company's stock. On February 24, 2025, the Company repurchased 500,000 shares at $2.40 per share in a negotiated transaction. Net cash used by financing activities in fiscal 2024 was primarily attributable to taxes paid on vested Restricted Stock Units (“RSUs”).
Previous wording
The Company reviews long-lived assets for impairment when events or circumstances indicate that the carrying value of such assets may not be fully recoverable. Impairment is evaluated based on the sum of undiscounted estimated future cash flows expected to result from use and eventual disposition of the assets compared to their carrying value. If impairment is indicated, the carrying value of an impaired asset is reduced to its fair value, based on discounted estimated future cash flows. The Company recognized pre-tax, non-cash impairment charges of zero and $5 thousand during fiscal 2024 and 2023, respectively. The Company had $0.1 million and $0.2 million in sublease income during fiscal 2024 and 2023, respectively.
Current wording
The Company reviews long-lived assets for impairment when events or circumstances indicate that the carrying value of such assets may not be fully recoverable. Impairment is evaluated based on the sum of undiscounted estimated future cash flows expected to result from use and eventual disposition of the assets compared to their carrying value. If impairment is indicated, the carrying value of an impaired asset is reduced to its fair value, based on discounted estimated future cash flows.
Previous wording
Franchise revenue consists of income from license fees, royalties, area development and foreign master license agreements, advertising fund revenues, supplier incentive and convention contribution revenues. Franchise fees, area development and foreign master license agreement fees are amortized into revenue on a straight-line basis over the term of the related contract agreement. In the event of a closed franchise or defaulted development agreement, the remaining balance of unamortized license fees will be recognized in entirety as of the date of the closure or default. Royalties and advertising fund revenues, which are based on a percentage of franchise retail sales, are recognized as income as retail sales occur. Supplier incentive revenues are recognized as earned, typically as the underlying commodities are shipped.
Current wording
Franchise revenue consists of income from license fees, royalties, area development and foreign master license agreements, advertising fund revenues, supplier incentive and convention contribution revenues. Franchise fees, area development and foreign master license agreement fees are amortized into revenue on a straight-line basis over the term of the related contract agreement. In event of a closed franchise or defaulted development agreement, the remaining balance of unamortized license fees will be recognized in entirety as of the date of the closure or default. Royalties and advertising fund revenues, which are based on a percentage of franchise retail sales, are recognized as income as retail sales occur. Supplier incentive revenues are recognized as earned, typically as the underlying commodities are shipped.
Previous wording
The Company continually reviews the realizability of its deferred tax assets, including an analysis of factors such as future taxable income, reversal of existing taxable temporary differences, and tax planning strategies. The Company assess whether a valuation allowance should be established against its deferred tax assets based on consideration of all available evidence, using a “more likely than not” standard. In assessing the need for the valuation allowance, the Company considers both positive and negative evidence related to the likelihood of realization of deferred tax assets. In making such assessment, more weight is given to evidence that can be objectively verified, including recent operating performance. Future sources of taxable income are also considered in determining the amount of the recorded valuation allowance.
Current wording
The Company continually reviews the realizability of its deferred tax assets, including an analysis of factors such as future taxable income, reversal of existing taxable temporary differences, and tax planning strategies. The Company assesses whether a valuation allowance should be established against its deferred tax assets based on consideration of all available evidence, using a “more likely than not” standard. In assessing the need for a valuation allowance, the Company considers both positive and negative evidence related to the likelihood of realization of deferred tax assets. In making such assessment, more weight is given to evidence that can be objectively verified, including recent operating performance. Future sources of taxable income are also considered in determining the amount of the recorded valuation allowance.