Highlights

  • Retail Food Group (ASX:RFG) reported FY26 underlying Revenue of A$99.6 million, while cost reductions remained a key focus.
  • Underlying EBITDA declined to A$20.3 million, reflecting softer network sales and ongoing operational challenges.
  • The group continued expanding Firehouse Subs in Australia while targeting broader Brand growth.
  • FY27 priorities include delivering further cost savings, stabilising same-store sales and improving network performance.

Retail Food Group (ASX:RFG), the franchisor behind brands including Gloria Jean's, Donut King and Brumby's Bakery, enters FY27 focused on improving operational performance after several years of restructuring and cost reduction.

The FY26 result highlighted the ongoing challenge facing the group: revenue and network sales remained under pressure, while management continued to reduce costs and streamline operations. The progress of its newer growth initiatives, including Firehouse Subs, will be an important part of the company's next phase.

Latest Development

In its FY26 results released in late August 2026, Retail Food Group (ASX:RFG) reported underlying revenue of A$99.6 million, down 3.0 per cent from the prior year.

Underlying EBITDA declined 31.4 per cent to A$20.3 million, although the result remained within the revised guidance range of A$20.0 million to A$21.0 million provided earlier in 2026.

Underlying net profit after tax was A$7.8 million, down 41.8 per cent, while statutory net profit was A$1.1 million.

Domestic network sales reached A$489.5 million, representing a 3.1 per cent decline compared with the previous year.

Company Overview

Retail Food Group (ASX:RFG) is a multi-brand franchisor operating across cafe, bakery, quick-service and pizza categories.

Its portfolio includes Gloria Jean's, Donut King, Brumby's Bakery, Michel's Patisserie, Beefy's Pies, CIBO Espresso, Cafe 2U and Crust Gourmet Pizza.

Listed on the ASX since June 2006, the company operates through a Franchise model where brand performance depends on Franchisee profitability, customer Demand and network expansion.

The group also holds Australian rights to US sandwich brand Firehouse Subs, which opened its first Australian store at Westfield Mount Gravatt in Brisbane in June 2026.

Recent Developments

Performance across the core network remained mixed during FY26.

Same-store sales across core brands declined 0.7 per cent, with Crust increasing 0.3 per cent while cafe, coffee and bakery brands declined 1.3 per cent.

Outlet numbers reduced by 29 from December 2025, reflecting six openings against 35 closures.

Cost reduction remained a major focus. Rationalisation savings achieved during FY26 increased to between A$2.3 million and A$2.5 million, ahead of the earlier target range of A$1.2 million to A$1.8 million.

For FY27, management is targeting additional cost savings of A$5.0 million to A$7.0 million. The company also progressed office consolidation in South East Queensland and reduced management layers.

Financial and Operational Position

Retail Food Group (ASX:RFG) reported unrestricted cash of A$14.4 million at the balance date, compared with A$13.9 million a year earlier.

Total cash reserves stood at A$24.2 million compared with A$26.0 million previously.

Operating cash flow declined to A$9.3 million from A$18.4 million.

The company refinanced its A$41.2 million Debt Facility with Washington H Soul Pattinson Ltd, with the facility scheduled to mature in August 2027.

No Dividend information was disclosed with the FY26 result.

What Investors May Watch Next

The performance of the core franchise network remains one of the most important indicators for Retail Food Group (ASX:RFG).

Core brand network sales were running 2.6 per cent lower during the first eight weeks of FY27, making the pace of recovery or further decline a key metric to monitor.

The rollout of Firehouse Subs is another important growth area. Management has targeted four Australian stores by December 2026 and 15 stores by December 2027.

Investors may also monitor progress against the FY27 cost savings target and the company's approach to managing its debt facility maturity.

Risks

Franchise networks depend heavily on franchisee profitability and customer demand, and Retail Food Group (ASX:RFG) experienced more closures than openings during FY26.

Consumer spending pressure remains a challenge for cafe and bakery categories, while input costs, including coffee prices, can affect franchisee margins.

The Firehouse Subs rollout provides growth potential but also carries execution risk as a newer brand within the Australian market.

The debt facility Maturity in August 2027 creates an additional balance-sheet consideration, requiring careful management of cash flow, refinancing and Capital allocation.

Conclusion

Retail Food Group (ASX:RFG) enters FY27 with a smaller network, lower Earnings and a greater emphasis on cost efficiency.

The company's next phase will depend on whether same-store sales can stabilise, whether planned cost savings translate into improved profitability and whether Firehouse Subs develops into a meaningful growth contributor.

While FY26 reflected ongoing pressure across parts of the franchise portfolio, the combination of operational changes and new brand expansion provides clear areas for investors to monitor over the coming reporting periods.