Ms. Kelly Blankstein reports

A&W REVENUE ROYALTIES INCOME FUND ANNOUNCES STRONG SECOND QUARTER 2023 RESULTS

A&W Revenue Royalties Income Fund and A&W Food Services of Canada Inc. have released the fund's results for the second quarter ended June 18, 2023, which are expected to be filed on SEDAR on July 31, 2023. The fund will hold a conference call to discuss the results on Wednesday, July 26, 2023, at 1 p.m. PT (4 p.m. ET).

The call will be webcast live and may be accessed on-line. Participants who wish to ask questions or are unable to join via webcast may dial in by calling toll-free 1-888-886-7786 or 1-416-764-8658, and by using the conference ID 40406355 or quoting A&W Revenue Royalties when prompted by the operator. For those unable to participate in the live call, a replay will be made available for one year on-line.

"We are pleased with our results for the first half of 2023 and, in particular, with the early response from guests as we began the national advertising campaign for our A&W Brew Bar late in Q2. The A&W Brew Bar is a strategic initiative which features both hot and cold drinks, including lattes and cappuccinos as well as icy cold frozen A&W Root Beer and other refreshing drinks you can only get at an A&W. The A&W Brew Bar is now available in 560 plus locations across Canada."

Royalty income for the second quarter of 2023 increased by 4.8 per cent in Q2 2023 and 6.4 per cent year to date, as compared with comparable periods in 2022. The royalty income for Q2 2023 was $12,773,000 and is based on gross sales reported by restaurants in the royalty pool (i) of $425,768,000, compared with royalty income of $12,187,000 and gross sales reported by A&W restaurants in the royalty pool (i) of $406,215,000 for the second quarter of 2022. Year-to-date royalty income was $24,212,000 based on gross sales reported by restaurants in the royalty pool (i) of $807,066,000, compared with royalty income of $22,765,000 and gross sales reported by A&W restaurants in the royalty pool (i) of $758,829,000 for the comparable period in 2022.

The increase in royalty income for the quarter and year-to-date period was driven by royalty pool same-store sales growth (i), which was plus 2.5 per cent for the quarter and plus 4.1 per cent year to date, and the gross sales from the 22 net new restaurants added to the royalty pool on Jan. 5, 2023. The increase for the year-to-date period was partially offset by there being one less day in the year-to-date period of 2023 as compared with the year-to-date period of 2022. Royalty pool same-store sales growth is based on an equal number of days in the quarter and year.

The royalty pool same-store sales growth in both the quarter and year-to-date period was primarily driven by growth in average check size, which was mainly attributable modest increases in response to industry-wide inflation on goods, services and labour.

Three monthly distributions totalling 48.0 cents per unit were declared in the second quarter of 2023 compared with three monthly distributions totalling 46.5 cents per unit in the second quarter of 2022. Five monthly distributions totalling 80.0 cents per unit were declared in the 2023 year-to-date period compared with five monthly distributions totalling 77.5 cents per unit for the comparable period in 2022. Total distributions declared and accrued per equivalent unit year to date were 88.9 cents for 2023 compared with 86.6 cents for the comparable period in 2022.

The quarterly payout ratio reported by the fund is impacted by seasonality of sales of the A&W restaurants and the timing of current income taxes, which can vary by quarter, and the distribution rate in effect at the time. The payout ratio (iv) for the second quarter of 2023 was 88.9 per cent compared with 89.2 per cent for the second quarter of 2022. The payout ratio of 99.4 per cent for the year-to-date period in 2023 is higher than the trailing four-quarter payout ratio of 91.9 per cent, due to both the seasonality of sales and the timing impact of current income taxes.

About A&W Revenue Royalties Income Fund

The fund is a limited-purpose trust established to invest in Trade Marks, which, through its interest in the A&W Trade Marks LP, owns the A&W trademarks used in the A&W quick-service restaurant business in Canada. The A&W trademarks comprise some of the best-known brand names in the Canadian foodservice industry. In return for licensing A&W Food Services to use its trademarks, Trade Marks (through the partnership) is entitled to royalties equal to 3 per cent of the gross sales reported by A&W restaurants in the royalty pool.

The royalty pool is adjusted annually to reflect gross sales from new A&W restaurants, net of the gross sales of any A&W restaurants that have permanently closed. Additional LP units are issued to A&W Food Services to reflect the annual adjustment. A&W Food Services' additional LP units are exchanged for additional common shares of Trade Marks, which are exchangeable for trust units. The 21st annual adjustment to the royalty pool took place on Jan. 5, 2023, at which time the number of restaurants in the royalty pool increased from 1,015 to 1,037.

Trade Marks' dividends to A&W Food Services and the fund, and the fund's distributions to unitholders are based on top-line revenues of the A&W restaurants in the royalty pool, less interest, general and administrative expenses, and current income taxes of Trade Marks.

About A&W Food Services of Canada Inc.

A&W is the second-largest quick-service hamburger restaurant chain in Canada. Operating coast to coast, A&W restaurants feature famous trademarked menu items such as The Burger Family, Chubby Chicken and A&W Root Beer.

We seek Safe Harbor.