Retail Food Group: Buy Rating on Strengthened Franchising Core, Growth Optionality and Attractive Valuation

, an analyst from PAC Partners, has initiated a new Buy rating on Retail Food Group (RFGPF).

PAC Partners has given his Buy rating due to a combination of factors that highlight both stability and upside in Retail Food Group’s outlook. The firm views RFG’s core franchising operations—anchored by well-known brands like Donut King, Gloria Jean’s and Crust Pizza, plus related coffee supply—as a dependable generator of gross profit and EBITDA. They note that the franchise network has been materially improved after a period of consolidation, with new outlets in the coffee, cafe and bakery segment performing markedly better than those that have exited. In PAC Partners’ assessment, RFG’s accumulated know‑how in multi-brand franchising, including site selection, lease negotiation and franchisee support, is a differentiated asset that could appeal to international food retailers entering the Australian market.
Furthermore, PAC Partners highlights meaningful growth optionality from the planned expansion of Beefy’s Pies and Firehouse Subs over the medium to long term. The decision to wind back the capital-intensive corporate store strategy is seen as a positive pivot, freeing management to focus on the core franchise portfolio and higher-return growth initiatives, while removing a significant cashflow drag. They also see scope for additional cost efficiencies that could provide upside to their current earnings forecasts. The presence of a major shareholder associated with United Petroleum is viewed as a potential catalyst for future corporate activity. Valuation is a key element of the Buy call: at current levels, RFG trades on modest earnings and EV/EBITDA multiples and carries substantial franking credits and tax losses, which together underpin PAC Partners’ $2.50 target price and justify the positive recommendation.