Mr. David Aisenstat reports

THE KEG ROYALTIES INCOME FUND ANNOUNCES FIRST QUARTER 2015 FINANCIAL RESULTS

The Keg Royalties Income Fund has released its financial results for the three months ended March 31, 2015.

The gross sales reported by the 102 Keg restaurants in the royalty pool were $146,383,000 for the quarter, an increase of $11,623,000 or 8.6 per cent from the comparable quarter of the prior year. The increase in royalty pool sales during the quarter reflect the sales of the new Keg restaurants opened during the period from Oct. 3, 2013, to Oct. 2, 2014, which were added to the royalty pool on Jan. 1, 2015, and same-store sales increases of 8.2 per cent for the quarter.

The Keg's same-store sales (sales of restaurants that operated during the entire 13-week period of both the current and prior years) increased by 6.9 per cent in Canada and by 7.9 per cent in the United States. After translating the sales of the U.S. restaurants into their Canadian-dollar equivalent, consolidated same-store sales for the comparable 13-week periods increased 8.3 per cent. The average exchange rate moved from 1.099 in KRL's 13-week period ended March 30, 2014, to 1.238 in KRL's 13-week period ended March 29, 2015, significantly increasing the Canadian-dollar equivalent of the U.S. restaurant sales.

Royalty income increased by $468,000 or 8.7 per cent from $5,391,000 in the three months ended March 31, 2014, to $5,859,000 in the three months ended March 31, 2015.

Distributable cash before SIFT tax increased by $292,000 from $4,099,000 (36.1 cents per fund unit) to $4,391,000 (38.7 cents per fund unit) for the quarter. Distributable cash available to pay distributions to public unitholders increased by $169,000 from $3,094,000 (27.3 cents per fund unit) to $3,263,000 (28.7 cents per fund unit) during the comparable quarter. Distributions of $2,747,000 (24.2 cents per fund unit) were paid to fund unitholders in the first quarter of 2015, as compared with $2,725,000 (24 cents per fund unit) in the first quarter of 2014. Monthly distributions were increased by 2.5 per cent from eight cents per unit to 8.2 cents per unit commencing in March, 2015.

The fund remains financially well positioned, with surplus cash on hand of $1,924,000 and a positive working capital balance of $3,215,000 as of March 31, 2015.

"Our sales performance continues to exceed expectations," said David Aisenstat, president and chief executive officer of Keg Restaurants Ltd. "Same-store sales growth is the largest driver of increases to royalty income and, ultimately, to increases in cash available for distribution to the fund's unitholders. In addition to that, the sales performance is a very good indicator of the continued popularity and enjoyment of the Keg brand."

                           FINANCIAL HIGHLIGHTS
            (in thousands of dollars, except per-unit amounts)

                                                     Jan. 1           Jan. 1
                                                to March 31,     to March 31,
                                                       2015             2014

Restaurants in the royalty pool                         102              103
Gross sales reported by restaurants in the
royalty pool                                  $     146,383    $     134,760
Royalty income(1)                             $       5,859    $       5,391
Interest income(2)                                    1,056            1,055
Total income                                  $       6,915    $       6,446
Administrative expenses(3)                              (96)             (92)
Interest and financing expenses(4)                     (149)            (153)
Operating income                              $       6,670    $       6,201
Distributions to KRL(5)                              (2,361)          (2,216)
Profit (loss) before fair-value adjustment
and taxes                                     $       4,309    $       3,985
Fair-value adjustment(6)                             (8,511)             266
Taxes(7)                                             (1,213)          (1,053)
Profit (loss) and comprehensive income
(loss)                                        $      (5,415)   $       3,198
Distributable cash before SIFT tax(8)         $       4,391    $       4,099
Distributable cash(9)                         $       3,263    $       3,094
Distributions paid to fund unitholders        $       2,747    $       2,725
Payout ratio(10)                                       84.2%            88.1%
Per-fund-unit information (11)
Profit (loss) before fair-value adjustment
and taxes                                     $       0.380    $       0.351
Profit (loss) and comprehensive income
(loss)                                        $      (0.477)   $       0.282
Distributable cash before SIFT tax(8)         $       0.387    $       0.361
Distributable cash(9)                         $       0.287    $       0.273
Distributions paid to fund unitholders        $       0.242    $       0.240

Notes:
(1)  The fund, indirectly through the partnership, earns royalty income equal 
     to 4 per cent of gross sales of Keg restaurants in the royalty pool.
(2)  The fund directly earns interest income on the $57-million Keg loan,
     with interest income accruing at 7.5 per cent per year, payable monthly.
(3)  The fund, indirectly through the partnership, incurs administrative 
     expenses and interest on the operating line of credit, to the extent 
     used.
(4)  The fund, indirectly through the trust, incurs interest expense on the
     $14-million term loan and amortization of deferred financing charges.
(5)  Represents the distributions of the partnership attributable to KRL
     during the respective periods on the exchangeable and Class C units held 
     by KRL. The Class A, entitled Class B and Class D partnership units are
     exchangeable into fund units on a one-for-one basis. These distributions 
     are presented as interest expense in the financial statements.
(6)  Fair-value adjustment is the non-cash increase or decrease in the market 
     value of the exchangeable units held by KRL during the respective period. 
     Exchangeable units are classified as a financial liability under IFRS
     (international financial reporting standards). The fund is required to 
     determine the fair value of that liability at the end of each reporting 
     period and adjust for any increase or decrease, taking into consideration 
     the sale of any exchangeable units and additional entitlements during the 
     same period.
(7)  Taxes for the three months ended March 31, 2015, include SIFT tax expense 
     of $1,128,000 (three months ended March 31, 2014 -- $1,005,000) and non-
     cash deferred taxes of $85,000 (three months ended March 31, 2014 -- 
     $48,000).
(8)  Distributable cash before SIFT tax is defined as the periodic cash flows 
     from operating activities as reported in the IFRS consolidated financial 
     statements, including the effects of changes in non-cash working capital, 
     plus SIFT tax paid (including current-year instalments), less interest 
     and financing fees paid on the term loan, less the partnership
     distributions attributable to KRL through its ownership of exchangeable
     units. Distributable cash before SIFT tax is a non-IFRS financial measure
     that does not have a standardized meaning prescribed by IFRS, and 
     therefore may not be comparable with similar measures presented by other 
     issuers.
(9)  Distributable cash is the amount of cash available for distribution to 
     the fund's public unitholders and is calculated as distributable cash 
     before SIFT tax, less current-year SIFT tax expense. Distributable cash 
     is a non-IFRS financial measure that does not have a standardized meaning 
     prescribed by IFRS, and therefore may not be comparable with similar 
     measures presented by other issuers. However, the fund believes that 
     distributable cash, both before and after SIFT tax, provides useful 
     information regarding the amount of cash available for distribution to the 
     fund's public unitholders.
(10) Payout ratio is computed as the ratio of total cash distributions paid 
     during the period (numerator) to the total distributable cash of the period 
     (denominator).
(11) All per-unit amounts are calculated based on the weighted average number of 
     fund units outstanding, meaning those units held by public unitholders 
     during the respective period. The weighted average number of fund units 
     outstanding for the three months ended March 31, 2015, was  11,353,500 
     (three months ended March 31, 2014 -- 11,353,500).
(12) Same-store sales growth (SSSG) is the overall increase or decrease in
     gross sales from Keg restaurants (that operated during the entire period of
     both the current and the prior year) as compared with gross sales for the 
     same period of the prior year. SSSG is not an IFRS financial measure and 
     does not have a standardized meaning prescribed by IFRS, and therefore may 
     not be comparable with similar measures presented by other issuers. However, 
     the fund believes that SSSG provides useful information regarding the 
     increase or decrease in gross sales for comparable restaurants.
(13) The number of restaurants added to the royalty pool each year may differ 
     from the number of restaurant openings and closings reported by KRL on an 
     annual basis, as the periods for which they are reported differ slightly.
(14) The interim financial results for all periods presented herein have not 
     been audited.

We seek Safe Harbor.