RAVE Restaurant Group (RAVE) Sophon Profile

A $50M market cap pizza chain franchisor led by a former Domino’s executive, trading at 11x LTM EBITDA

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View: Pass

Sophon Score: 55/100 (see evaluation rubric at end of note)

We’re passing for now given negative unit growth and softening same-store sales. If the “Reimage” program proves to be a catalyst for comp and unit growth, we’d revisit the name. We’re constructive on CEO Brandon Solano, whose prior track record as an exec at Domino’s gives us confidence in execution should the strategy gain traction.

Market Cap $50.52M
Total Debt $0.67M
Cash & Inv. $8.72M
Enterprise Value $42.47M
LTM P/E 19.0x
LTM EV/Sales 3.5x
LTM EV/EBITDA 11.3x

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Company Overview
RAVE Restaurant Group is a micro-cap pizza franchising and licensing play, running two distinct concepts: Pizza Inn and Pie Five. The company’s story is less about flashy innovation and more about operational discipline, brand differentiation, and steady growth through franchising.

Concepts

• Pizza Inn is the legacy brand, known for buffets, house-made dough, fresh mozzarella, signature sauce, and a “small-town, family-friendly” vibe. Units range from traditional buffets to delivery/carry-out (Delco), express formats, and now ghost kitchens.

• Pie Five is RAVE’s fast-casual concept, launched in 2011, with personalized craft pizzas, sophisticated ingredients, and speed. They also operate ghost kitchens here.

• Smaller formats like Delco, Express, or PIE kiosks are essentially ancillary — they don’t move the needle individually but support growth opportunistically.

As a pure-play franchisor, RAVE benefits from a business model that emphasizes recurring revenue streams (royalties and incentives) with relatively lower direct operating costs. This model is designed to deliver increased earnings per share due to a reorganized corporate structure and continued focus on cost controls, as noted by the CFO. The company has achieved 20 consecutive quarters as of Q3 FY2025, demonstrating the effectiveness of its cost control measures and financial strategies.

RAVE competes in a crowded pizza market but leans into two things: distinct concepts and operational execution. Ghost kitchens let RAVE exploit Pizza Inn’s latent brand equity in markets without physical locations, driving incremental unit economics without heavy CapEx.