What changed in this filing

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Item 1. Business

2023-09-21 compared with 2022-09-23 · 142 added, 142 removed, 95 unchanged (75% of the section changed)

Rave Restaurant Group, Inc., through its subsidiaries (collectively, the “Company” or “we,” “us” or “our”) franchise pizza buffet (“Buffet Units”), delivery/carry-out (“Delco Units”) and express (“Express Units”) restaurants under the trademark “Pizza Inn” and franchises fast casual pizza restaurants (“Pie Five

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.

Rave Restaurant Group, Inc., through its subsidiaries (collectively, the “Company” or “we,” “us” or “our”) franchises pizza buffet (“Buffet Units”), delivery/carry-out

(“Delco Units”) and express (“Express Units”) restaurants under the trademark “Pizza Inn” and franchises fast casual pizza restaurants (“Pie Five 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.

As of June 25, 2023, we had 152 franchised Pizza Inn restaurants, 27 franchised Pie Five Units, and 5 licensed PIE Units.

domestic franchised Pizza Inn restaurants were comprised of 72 Buffet Units, 10 Delco Units and 37 Express Units.

The 118 domestic franchised Pizza Inn restaurants

were comprised of 77 Buffet Units, 7 Delco Units and 34 Express Units.

As of June 25, 2023, there were 34 international franchised Pizza Inn restaurants.

Domestic Pizza Inn restaurants and kiosks were

located predominantly in the southern half of the United States, with Texas, Arkansas, North Carolina and Mississippi accounting for approximately 23%, 22%, 13% and 9%, respectively, of the total number of domestic units.

Domestic Pizza Inn restaurants and kiosks were located predominantly in the southern half

of the United States, with Arkansas, Texas, North Carolina and Mississippi accounting for approximately 23%, 20%, 15% and 9%, respectively, of the total number of domestic units.

The Company has offered consumers affordable, high quality pizza since 1958, when the first Pizza Inn restaurant opened in Dallas, Texas.

We awarded our first franchise in 1963 and opened our first buffet restaurant in 1969.

We awarded our first franchise in

1963 and opened our first buffet restaurant in 1969.

We began franchising the Pizza Inn brand internationally in the late 1970s.

In 1993, our stock began trading on the NASDAQ Stock Market, and presently trades

on the NASDAQ Capital Market under the ticker symbol “RAVE.” In June 2011, we opened the first Pie Five restaurant in Ft.

In 1993, our stock began trading on the NASDAQ Stock Market and presently trades on the NASDAQ Capital Market under

the ticker symbol “RAVE.” In June 2011, we opened the first Pie Five restaurant in Ft.

Worth, Texas.

In November 2012, we signed our first franchise development agreement for Pie Five.

In 2019, we launched the

PIE kiosk and convenience store solution to meet the consumer demand for tasty and high-quality pizzas within a grab-and-go delivery model.

In 2019, we launched the PIE kiosk and convenience store

solution to meet the consumer demand for tasty and high-quality pizzas within a grab-and-go delivery model.

We operate and franchise restaurant concepts under two distinct brands:

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Additionally, we license PIE Units under the Pizza Inn brand.

Buffet Units and Delco Units

feature crusts that are hand-made from dough made fresh in the restaurant each day.

Buffet Units and Delco

Units feature crusts that are hand-made from dough made fresh in the restaurant each day.

Our pizzas are made with a proprietary all-in-one flour mixture, real mozzarella cheese, and a proprietary mix of classic pizza spices.

In international markets,

the menu mix of toppings and side items is occasionally adapted to local tastes.

In international

markets, the menu mix of toppings and side items is occasionally adapted to local tastes.

Buffet Units offer dine-in, carryout, and catering service and, in many cases, also offer delivery service.

Buffet Units offer a variety of pizza crusts with

standard toppings and special combinations of toppings in addition to pasta, salad, sandwiches, appetizers, desserts and beverages, including beer and wine in some locations, in an informal, family-oriented atmosphere.

We occasionally offer

other items on a limited promotional basis.

Buffet Units offer a variety of pizza crusts with standard

toppings and special combinations of toppings in addition to pasta, salad, sandwiches, appetizers, desserts and beverages, including beer and wine in some locations, in an informal, family-oriented atmosphere.

We occasionally offer other items

on a limited promotional basis.

Buffet Units are generally located in free standing buildings or strip center locations in retail developments near offices, shopping centers and residential areas.

The current standard Buffet Units

are between 2,100 and 4,500 square feet in size and seat 120 to 185 customers.

The current standard Buffet Units are between

2,100 and 4,500 square feet in size and seat 120 to 185 customers.

The interior decor is designed to promote a casual, lively, contemporary, family-style atmosphere.

Some Buffet Units feature game rooms that offer a range of

electronic game entertainment for the entire family.

Some Buffet Units feature game rooms that offer a range of electronic game

entertainment for the entire family.

Delco Units offer delivery and carryout service only and are typically located in shopping centers or other in-line retail developments.

Delco Units typically offer a variety of crusts and some combination of side items.

Delco Units typically offer a

variety of crusts and some combination of side items.

Delco Units occupy approximately 1,200 square feet, are primarily production facilities and, in most instances, do not offer seating.

The decor of the Delco Unit

is designed to be bright and highly visible and feature neon lighted displays and awnings.

The decor of the Delco Unit is designed to be bright and

highly visible and feature neon lighted displays and awnings.

We have attempted to locate Delco Units strategically to facilitate timely delivery service and to provide easy access for carryout service.

Express Units serve our customers through a variety of non-traditional points of sale.

Express Units are typically located in a

convenience store, food court, college campus, airport terminal, travel plaza, athletic facility or other commercial facility.

They have limited or no seating and solely offer quick carryout service of a limited menu of pizza and other foods and

An Express Unit typically occupies approximately 200 to 400 square feet and is commonly operated by the operator or food service licensee of the commercial host facility.

We have developed a high-quality pre-prepared crust that is

topped and cooked on-site, allowing this concept to offer a lower initial investment and reduced labor and operating cost s while maintaining product quality and consistency.

Like Delco Units, Express Units are primarily

production-oriented facilities and, therefore, do not require all of the equipment, labor or square footage of the Buffet Unit.

Express Units are typically located in a convenience store, food court, college

campus, airport terminal, travel plaza, athletic facility, or other commercial facility.

They have limited or no seating and solely offer quick carryout service of a limited menu of pizza and other foods and beverages.

An Express Unit typically

occupies approximately 200 to 400 square feet and is commonly operated by the operator or food service licensee of the commercial host facility.

We have developed a high-quality, pre-prepared crust that is topped and cooked on-site, allowing

this concept to offer a lower initial investment and reduced labor and operating costs while maintaining product quality and consistency.

Like Delco Units, Express Units are primarily production-oriented facilities and, therefore, do not require

all of the equipment, labor or square footage of the Buffet Unit.

PIE Units serve customers through a non-traditional, licensed, pizza-only model called Pizza Inn Express.

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Pie Five is a fast-casual pizza concept that creates individualized pizzas which are baked in our specially designed oven.

Pizzas are created at the direction of our customers who

choose from a variety of freshly prepared and displayed proprietary and non-proprietary toppings, cheeses, sauces and doughs.

Customers can also get freshly prepared side salads, also made to order from our recipes or at the customer’s direction.

They can also choose from several baked daily desserts like brownies, cookie pies, and cakes.

Pizzas are created at the direction of our

customers who choose from a variety of freshly prepared and displayed proprietary and non-proprietary toppings, cheeses, sauces and doughs.

Customers can also get freshly prepared side salads, also made to order from our recipes or at the

customer’s direction.

A variety of soft beverages are available, as well as beer and wine in some locations.

Traditional Pie Five restaurants typically occupy leased, in-line or end-cap space of between 1,800 and 2,400 square feet in retail strip or multi-unit retail space.

for 65 to 85 customers in most units, and patio seating where available, Pie Five restaurants primarily serve lunch and dinner to families, adults and kids of all ages.

Pie Five restaurants typically are in high traffic, high visibility urban or

suburban sites in mid to large-size metropolitan areas.

seating for 65 to 85 customers in most units, and patio seating where available, Pie Five restaurants primarily serve lunch and dinner to families, adults and kids of all ages.

Pie Five restaurants typically are in high traffic, high visibility

urban or suburban sites in mid to large-size metropolitan areas.

Sales are predominantly on-premise though carry out and delivery are offered as well.

Due to the relatively compact footprint of the restaurants, and other operating advantages, we believe

Pie Five is also well suited for non-traditional locations such as airports.

Due to the relatively compact footprint of the restaurants, and other operating advantages, we

believe Pie Five is also well suited for non-traditional locations such as airports.

Site Selection

We consider the restaurant site selection process critical to a restaurant’s long-term success and devote significant resources to the investigation and evaluation of potential

The site selection process includes a review of trade area demographics using a third-party customer and site selection tool, as well as a proprietary evaluation process.

We may also rely on a franchisee’s knowledge of the trade area and

market characteristics when selecting a location for a franchised restaurant.

We consider the restaurant site selection process critical to a restaurant’s long-term success and devote significant resources to the investigation and evaluation of

potential sites.

The site selection process includes a review of trade area demographics and an evaluation process.

We may also rely on a franchisee’s knowledge of the trade area and market characteristics when selecting a location for a

franchised restaurant.

A member of our development team visits each potential domestic restaurant location.

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New Unit Development

We intend to expand the Pizza Inn system domestically and internationally in markets with significant long-term growth potential and where we believe we can use our competitive

strengths to establish brand recognition and gain local market share.

We intend to expand the Pizza Inn system domestically and internationally in markets with significant long-term growth potential and where we believe we can use our

competitive strengths to establish brand recognition and gain local market share.

We plan to expand our Pizza Inn branded domestic restaurant base primarily through opening new franchised restaurants with new and existing franchisees.

We expect to evaluate

the continued development of new Pizza Inn Buffet and Delco Units in international markets in fiscal 2023, particularly in the Middle East.

to evaluate the continued development of new Pizza Inn Buffet and Delco Units in international markets in fiscal 2024, particularly in the Middle East.

The Company previously granted area developer rights for Pizza Inn restaurants in existing domestic markets.

However, the Company is no longer pursuing such agreements.

area developer typically paid a negotiated fee to purchase the right to operate or develop restaurants within a defined territory and agreed to a multi-restaurant development schedule.

The area developer assisted us in local franchise service and

quality control in exchange for half of the franchise fees and royalties from all restaurants within the territory during the term of the agreement.

We intend to continue developing franchised Pie Five Units domestically and internationally.

The rate at which we will be able to continue to expand the Pie Five concept through

franchise development is determined in part by our success at selecting qualified franchisees, by our ability to identify satisfactory sites in appropriate markets and by our ability to continue training and monitoring our franchisees.

Pizza Inn area developer typically paid a negotiated fee to purchase the right to operate or develop restaurants within a defined territory and agreed to a multi-restaurant development schedule.

The area developer assisted us in local franchise

service and quality control in exchange for half of the franchise fees and royalties from all restaurants within the territory during the term of the agreement.

We intend to continue developing franchised Pie Five Units domestically.

The rate at which we will be able to continue to expand the Pie Five concept through franchise

development is determined in part by our success at selecting qualified franchisees, by our ability to identify satisfactory sites in appropriate markets, and by our ability to continue training and monitoring our franchisees.

continue to focus on franchise development opportunities with experienced, well-capitalized restaurant operators.

In addition, we intend to take the brand into international markets.

Domestic Franchise Operations

Franchise and development agreements.

Our current standard forms of domestic franchise agreements provide for the following basic terms:

Pie Five Unit

Franchise fee per unit

Initial franchise term

Renewal period

Royalty rate % of sales

National ad fund % of sales

Required total ad spending % of sales

Since the Pizza Inn concept was first franchised in 1963, industry franchising concepts and development strategies have evolved, and our present franchise relationships are

evidenced by a variety of contractual forms.

Since the Pizza Inn concept was first franchised in 1963, industry franchising concepts and

development strategies have evolved, and our present franchise relationships are evidenced by a variety of contractual forms.

Common to those forms are provisions that:

(i) require the franchisee to follow the Pizza Inn system of restaurant operation and management, (ii) require the franchisee to pay a franchise fee,

contribute a specified percentage of sales to a marketing fund managed by the Company, and pay continuing royalties, and (iii) except for Express Units, prohibit the development of one restaurant within a specified distance from another.

(i) require the franchisee to follow the Pizza Inn system of restaurant

operation and management, (ii) require the franchisee to pay a franchise fee, contribute a specified percentage of sales to a marketing fund managed by the Company, and pay continuing royalties, and (iii) except for Express Units, prohibit the

development of one restaurant within a specified distance from another.

We launched the franchise program for Pie Five in fiscal 2013.

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Initial and certain supplemental training programs are offered free of charge to franchisees, who pay their own travel and lodging expenses.

New franchisees also receive on-site training

from Company employees to assist with their first two restaurant openings under their development agreements.

Restaurant managers train their staff through on-the-job training, utilizing video and printed materials produced by us.

New franchisees also receive on-site

training from Company employees to assist with their first two restaurant openings under their development agreements.

Restaurant managers train their staff through on-the-job training using video and printed materials produced by us.

We require franchisee adherence to a variety of standards designed to ensure proper operations and to protect and enhance the

Pizza Inn and Pie Five brands.

All franchisees are required to operate their restaurants in compliance with these written policies, standards and specifications, which include matters such as menu items, ingredients, materials, supplies, services,

furnishings, decor and signs.

Our efforts to maintain consistent operations may result, from time to time, in the closing of certain restaurants that have not achieved and maintained a consistent standard of quality or operations.

All franchisees are required to operate their restaurants in compliance with these written policies, standards, and specifications, which include matters such as menu items, ingredients, materials, supplies,

services, furnishings, decor, and signs.

Our efforts to maintain consistent operations may result, from time to time, in the closing of certain restaurants that have not maintained a consistent standard of quality or operations.

We also maintain

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single day of training at the licensed location.

PIE Unit managers train their staff through on-the-job training, utilizing video and printed materials produced by us.

PIE Unit managers train their staff through on-the-job training, using video and printed materials produced by us.

We require licensee adherence to a variety of standards designed to ensure proper operations and to protect and enhance the

Pizza Inn brand.

All licensees are required to operate their kiosks in compliance with these written policies, standards and specifications, which include matters such as menu items, ingredients, materials, supplies, services, furnishings, decor

Our efforts to maintain consistent operations may result, from time to time, in the closing of certain kiosks that have not achieved and maintained a consistent standard of quality or operations.

We also maintain adherence to our

standards through ongoing support and education of our licensees by our franchise business consultants, who are deployed locally in markets where our licensees are located.

All licensees are required to operate their kiosks in compliance with these written policies, standards, and specifications, which include matters such as menu items, ingredients, materials, supplies, services, furnishings,

decor, and signs.

Our efforts to maintain consistent operations may result, from time to time, in the closing of certain kiosks that have not maintained a consistent standard of quality or operations.

We also maintain adherence to our standards

through ongoing support and education of our licensees by our franchise business consultants, who are deployed locally in markets where our licensees are located.

Company-Owned Restaurant Operations

As of June 26, 2022, we did not operate any Company-owned restaurants.

As of June 25, 2023 and June 26, 2022, we did not operate any Company-owned restaurants.

We presently intend to open and operate Company-owned restaurants in the future.

International Franchise Operations

We also offer master license rights to develop Pizza Inn and Pie Five restaurants in certain foreign countries, with negotiated fees, development schedules and ongoing royalties.

master licensee for a foreign country pays a negotiated fee to purchase the right to develop and operate restaurants within a defined territory, typically for a term of 20 years, plus a ten-year renewal option.

The master licensee agrees to a

multi-restaurant development schedule and we train the master licensee to monitor and assist franchisees in their territory with local service and quality control, with support from us.

In return, the master licensee typically retains half the

franchise fees and half the royalties on all restaurants within the territory during the term of the agreement.

Master licensees may open restaurants that they own and operate, or they may open sub-franchised restaurants owned and operated by

third parties through agreements with the master licensee, but subject to our approval.

We also offer master license rights to develop Pizza Inn and Pie Five restaurants in certain foreign countries, with negotiated fees, development schedules, and ongoing

A master licensee for a foreign country pays a negotiated fee to purchase the right to develop and operate restaurants within a defined territory, typically for a term of 20 years, plus a ten-year renewal option.

The master licensee

agrees to a multi-restaurant development schedule, and we train the master licensee to monitor and assist franchisees in their territory with local service and quality control with support from us.

In return, the master licensee typically

retains half the franchise fees and half the royalties on all restaurants within the territory during the term of the agreement.

Master licensees may open restaurants that they own and operate, or they may open sub-franchised restaurants owned

and operated by third parties through agreements with the master licensee subject to our approval.

Our first franchised Pizza Inn restaurant outside of the United States opened in the late 1970s.

As of June 26, 2022, there were 31 Pizza

Inn restaurants operating internationally.

Except for three restaurants in Honduras, all of the Pizza Inn restaurants operated or sub-licensed by our international master licensees are in the United Arab Emirates, Saudi Arabia and adjoining

Our ability to continue to develop select international markets is affected by a number of factors, including our ability to locate experienced, well-capitalized developers who can commit to an aggressive multi-restaurant development

schedule and achieve maximum initial market penetration with minimal supervision by us.

As of June 25, 2023, there were 34 Pizza Inn restaurants operating

internationally.

Except for three restaurants in Honduras and one restaurant in New Zealand, all of the Pizza Inn restaurants operated or sub-licensed by our international master licensees are in the United Arab Emirates, Saudi Arabia and

adjoining countries.

development schedule and achieve maximum initial market penetration with minimal supervision by us.

Food and Supply Distribution

Our franchisees and licensees purchase food and supplies directly from authorized, reputable, and experienced supply and distribution companies.

The Company provides sourcing,

quality assurance, and research and development for both the Pizza Inn and Pie Five systems.

The authorized distributors make deliveries to all domestic units from several distribution centers, with delivery territories and responsibilities for

each determined according to geographical region.

As a franchisor, the Company is able to leverage the advantages of direct vendor negotiations and volume purchasing of food, equipment and supplies for the franchisees’ and licensees’ benefit in

the form of a concentrated, one-truck delivery system, competitive pricing and product consistency.

The Company provides

sourcing, quality assurance, and research and development for both the Pizza Inn and Pie Five systems.

The authorized distributors make deliveries to all domestic units from several distribution centers, with delivery territories and

responsibilities for each determined according to geographical region.

As a franchisor, the Company is able to leverage the advantages of direct vendor negotiations and volume purchasing of food, equipment, and supplies for the franchisees’ and

licensees’ benefit in the form of a concentrated, one-truck delivery system, competitive pricing, and product consistency.

Franchisees and licensees are able to source all products and ingredients from authorized distributors.

In order to assure product quality and

consistency, our franchisees and licensees are required to purchase from authorized distributors certain food products that are proprietary to the Pizza Inn and Pie Five systems, including cheese, pizza sauce, flour mixture, certain meats and spice

assure product quality and consistency, our franchisees and licensees are required to purchase from authorized distributors certain food products that are proprietary to the Pizza Inn and Pie Five systems, including cheese, pizza sauce, flour

mixture, certain meats, and spice blend.

Franchisees and licensees may purchase other non-proprietary food products and supplies either from authorized distributors or from other suppliers who meet our requirements for quality and reliability.

Non-proprietary food and ingredients, equipment and other supplies are generally available from several qualified sources.

With the exception of several proprietary food products,

such as cheese and dough flour, we are not dependent upon any one supplier or a limited group of suppliers.

With the exception of several proprietary food

products, such as cheese and dough flour, we are not dependent upon any one supplier or a limited group of suppliers.

We contract with established food processors for the production of our proprietary products according to our specifications.

We have not experienced any significant shortages of supplies or any delays in receiving our food or beverage inventories, restaurant supplies or products, but disruption of supply

chains as a result of COVID-19 or other factors could cause difficulty in obtaining inventories or supplies in the future.

Prices charged by our suppliers are subject to fluctuation, and franchisees and licensees bear increased costs or benefit

from savings through changes in product pricing.

We have not experienced any significant shortages of supplies or any delays in receiving our food or beverage inventories, restaurant supplies, or products, but disruption of

supply chains or other factors could cause difficulty in obtaining inventories or supplies in the future.

Prices charged by our suppliers are subject to fluctuation, and franchisees and licensees bear increased costs or benefit from savings

through changes in product pricing.

We do not engage in commodity hedging but enter into pricing arrangements for up to a year in advance for certain high-volume products.

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We offer or facilitate several ways for the brand image and message to be promoted at the local and regional levels.

Pizza Inn and Pie Five franchisees contribute a specified percentage of their sales to the Company to fund the creation and production of various marketing and advertising programs

and materials, which may include print and digital advertisements, direct mail materials, customer satisfaction systems, social media and e-mail marketing, television and radio commercials, in-store promotional materials, marketing and public

relations services, and consumer research.

Pizza Inn and Pie Five franchisees contribute a specified percentage of their sales to the Company to fund the creation and production of various marketing and advertising

programs and materials, which may include print and digital advertisements, direct mail materials, customer satisfaction systems, social media and e-mail marketing, television and radio commercials, in-store promotional materials, marketing and

public relations services, and consumer research.

We anticipate continuing to optimize Pizza Inn and Pie Five marketing activities commensurate with the contributions of the marketing funds.

Pizza Inn and Pie Five franchisees are required to conduct independent marketing efforts in addition to their participation in the national marketing programs for each brand.

provide franchised restaurants with access to an assortment of local store marketing materials, including pre-approved print, radio, and digital media marketing materials.

We also provide local store marketing materials and programs specifically

to support new restaurant openings.

Pizza Inn and Pie Five franchisees are required to conduct independent marketing efforts in addition to their participation in the national marketing programs for each

We provide franchised restaurants with access to an assortment of local store marketing materials, including pre-approved print, radio, and digital media marketing materials.

We also provide local store marketing materials and programs

specifically to support new restaurant openings.

Trademarks and Quality Control

We own various trademarks, including the names “Pizza Inn” and “Pie Five,” that are used in connection with the restaurants and have been registered with the United States Patent

and Trademark Office.

We own various trademarks, including the names “Pizza Inn” and “Pie Five,” that are used in connection with the restaurants and have been registered with the United States

Patent and Trademark Office.

The duration of our trademarks is unlimited, subject to periodic renewal and continued use.

In addition, we have obtained trademark registrations for our marks in several foreign countries and have periodically re-filed and

applied for registration in others.

In addition, we have obtained trademark registrations for our marks in several foreign countries and have periodically

re-filed and applied for registration in others.

We believe that we hold the necessary rights for protection of the trademarks essential to our business.

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We and our franchisees are subject to various federal, state and local laws affecting the operation of our restaurants.

Each restaurant is subject to licensing and regulation by

several governmental authorities, which include health, safety, sanitation, wage and hour, alcoholic beverage, building and fire agencies in the state and municipality in which the restaurant is located.

Difficulties in obtaining, or the failure

to obtain, required licenses or approvals could delay or prevent the opening of a new restaurant or require the temporary or permanent closing of an existing restaurant in a particular area.

Each restaurant is subject to licensing and

regulation by several governmental authorities, which include health, safety, sanitation, wage and hour, alcoholic beverage, building and fire agencies in the state and municipality in which the restaurant is located.

Difficulties in obtaining,

or the failure to obtain, required licenses or approvals could delay or prevent the opening of a new restaurant or require the temporary or permanent closing of an existing restaurant in a particular area.

We are subject to Federal Trade Commission (“FTC”) regulations and to various state laws regulating the offer and sale of franchises.

The FTC requires us to furnish to prospective

franchisees a franchise disclosure document containing prescribed information.

Substantive state laws that regulate the franchisor-franchisee relationship presently exist in a number of states, and bills have been introduced in Congress from time

to time that would provide for further federal regulation of the franchisor-franchisee relationship in certain respects.

Some foreign countries also have disclosure requirements and other laws regulating franchising and the franchisor-franchisee

relationship.

As of June 26, 2022, we had 24 employees.

The FTC requires us to furnish to

prospective franchisees a franchise disclosure document containing prescribed information.

Substantive state laws that regulate the franchisor-franchisee relationship presently exist in a number of states, and bills have been introduced in

Congress from time to time that would provide for further federal regulation of the franchisor-franchisee relationship in certain respects.

Some foreign countries also have disclosure requirements and other laws regulating franchising and the

franchisor-franchisee relationship.

As of June 25, 2023, we had 25 full-time employees.

None of our employees are currently covered by collective bargaining agreements.

Industry and Competition

The restaurant industry is intensely competitive with respect to price, service, location and food quality, and there are many well-established competitors with substantially

greater brand recognition and financial and other resources than the Company.

The restaurant industry is intensely competitive with respect to price, service, location, and food quality, and there are many well-established competitors with

substantially greater brand recognition and financial and other resources than the Company.

Competitors include a number of international, national, and regional restaurant and pizza chains, as well as local restaurants and pizza operators.

competitors may be better established in the markets where our restaurants are or may be located.

Within the pizza segment of the restaurant industry, we believe that our primary competitors are national pizza chains and several regional chains.

Some of our competitors may be better established in the markets where our restaurants are or may be located.

Within the pizza segment of the restaurant industry, we believe that our primary competitors are national pizza chains and several

regional chains.

We also compete against the frozen pizza products available at grocery stores and large superstore retailers.

In recent years, several competitors have developed fast-casual pizza concepts that compete with Pie Five in certain metropolitan areas.

In recent years, several competitors have developed fast-casual pizza concepts that compete with Pie Five in certain

metropolitan areas.

A change in the pricing or other market strategies of one or more of our competitors could have an adverse impact on our sales and earnings.

With respect to the sale of franchises and licenses, we compete with many franchisors of restaurants and other business concepts.

We believe that the principal competitive factors

affecting the sale of franchises are product quality, price, value, consumer acceptance, franchisor experience and support, and the quality of the relationship maintained between the franchisor and its franchisees.

In general, there is also active

competition for management personnel and attractive commercial real estate sites suitable for our restaurants.

We believe that the principal competitive

factors affecting the sale of franchises are product quality, price, value, consumer acceptance, franchisor experience and support, and the quality of the relationship maintained between the franchisor and its franchisees.

In general, there is

active competition for management personnel and attractive commercial real estate sites suitable for our restaurants.

RISK FACTORS.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business