Rave Restaurant Group (Nasdaq: RAVE), the Dallas franchisor behind Pizza Inn and Pie Five, closed at $2.18 on October 16, 2026, down about 21% from its $2.75 close on September 23. Value investor Colin King argues the selloff came from a CEO pay dispute, not the business, and calls Rave Restaurant Group a turnaround becoming a growth story. The test is whether Pizza Inn opens the new buffets it plans for fiscal 2027 while the board and CEO Brandon Solano fight.
This is journalism and commentary, not investment advice. We hold no position unless stated.
Key facts
- Ticker and exchange: Rave Restaurant Group, RAVE, Nasdaq.
- Situation type: tiny, debt-free franchisor; governance dispute after record profit.
- The call: Colin King says fiscal 2026 results were good and the CEO pay fight likely drove the drop; he has not stated a position on X.
- Price: $2.18 on October 16, 2026, about $31 million of market value on 14,211,566 shares.
- Cash: $13.6 million of cash and short-term investments at June 28, 2026, and no borrowings on the balance sheet.
- Profit: fiscal 2026 net income of $2.9 million ($0.20 per share) and adjusted EBITDA of $3.9 million.
- Catalyst: Pizza Inn expects the first five of 10 new buffets under one development deal to open in fiscal 2027 (ends June 2027).
- Main risk: the CEO's discrimination complaint against the board, still under investigation.
Is RAVE a good bet right now?
On the numbers, Rave Restaurant Group looks cheap. Subtracting $13.6 million of cash and investments from about $31 million of market value leaves roughly $17 million, about 4.5 times fiscal 2026 adjusted EBITDA on our math.
The catch is people risk. Rave Restaurant Group is a small franchisor with $12.9 million of annual revenue, and its CEO is now in a formal dispute with his own board. If growth stalls or Solano leaves, a low multiple can stay low.
Why are investors bullish on Rave Restaurant Group?
- Record profit. The CFO said in the fiscal 2026 release that $3.9 million of pre-tax profit was the highest in 23 years.
- Pizza Inn keeps growing. Pizza Inn domestic comparable sales rose 2.4% for the year, and buffet count grew for a fifth straight year.
- A development pipeline. Solano said Pizza Inn "is aiming for more significant growth this fiscal year," including a 10-buffet agreement with a new multi-brand operator.
- Cash-rich balance sheet. Cash and investments rose $3.7 million in the year to $13.6 million.
Who's making this call and why?
Colin King (@valuedontlie) writes a special-situations newsletter and runs a small holding company. On September 24, 2026, as RAVE fell more than 20%, he posted that "FY26 results looked good (sales + earnings growth at core franchise business)" and that the CEO compensation dispute was likely driving the selloff. On October 15 he listed his September write-up as "$RAVE transitioning from turnaround to growth story."
Track record. In our tracking, Colin King is 11-8 (a .579 win rate) on 19 calls scored at 180 days against the S&P 500, with an average edge of +35.14 percentage points, rank 4 on the career table. That average leans heavily on one big winner; our notes show it near -1.1 points without it. See the scoreboard.
Other voices:
- Maj Soueidan (@majgeoinvesting), a microcap investor for 30+ years per his bio, wrote that "I would like to know how much of that $2.3M Solano is requesting is cash/base vs bonus." He added that he thinks Solano asked because he expects stronger Pizza Inn growth.
- Edwin Dorsey (@StockJabber), the exited founder of The Bear Cave newsletter per his bio, asked about Rave Restaurant Group, saying "It seems crazy they aren't keeping Solano happy."
We found no other detailed bull case on X.
Who disagrees?
We did not find a detailed bear case from a credible investor on X. The counterpoints come from filings and trade press.
- The dispute is real. Nation's Restaurant News reports Solano asked for pay rising to about $2.3 million by fiscal 2029 plus a board seat, and Chairman Mark Schwarz called it a "non-starter." Solano then filed a discrimination complaint, which the company is having Hagan Law Group investigate.
- Trade press noticed. Restaurant Business editor Jonathan Maze wrote that the CEO "and its board of directors are not simpatico right now."
- Pie Five keeps shrinking. Restaurant Business reports Pie Five is down to 13 units from 88 in 2016, and the company expects more closures.
- Recent sales slowed. Pizza Inn domestic comparable sales fell 2.8% in the fourth quarter, and Pie Five fell 17.3%.
- Costs rose. General and administrative expense rose to $5.9 million from $5.2 million.
What are the key facts to verify?
- The fiscal 2026 results and the 10-K legal-proceedings section.
- Solano's October 15 Form 4, which shows him still CEO and holding 636,495 shares.
- Pizza Inn opening counts in the next quarterly report.
- The outcome of the Hagan Law Group investigation and the Texas Workforce Commission complaint.
What would prove it right or wrong?
Right: Pizza Inn opens new buffets on schedule, comparable sales turn positive again, cash keeps building, and the pay dispute ends without losing the CEO.
Wrong: the dispute ends in a messy exit, buffet openings slip, Pizza Inn comparable sales keep falling, or cash is spent on costs instead of growth.
This is journalism and commentary, not investment advice. We hold no position unless stated.