Ms. Kelly Blankstein reports

A&W REVENUE ROYALTIES INCOME FUND ANNOUNCES FOURTH 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 fourth quarter ended Dec. 31, 2023, which are expected to be filed today on SEDAR+. The fund will hold a conference call to discuss the results today, Wednesday, Feb. 28, 2024, at 1 p.m. Pacific Time (4 p.m. Eastern Time).

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 1-888-259-6580 or 1-416-764-8624 and using the conference ID 74686768, 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 the continued royalty pool same-store sales growth in the quarter, resulting in 2.7-per-cent royalty pool same-store sales growth for the year, particularly in comparison to very strong quarterly performance in 2022," said Susan Senecal, president and chief executive officer of A&W Food Services. "Food Services believes that its mission -- Together, to excite Canada's most avid burger lovers, wherever they are, with the best tasting burgers they crave, earning even more of their visits and making A&W restaurants even more successful -- will help it to continue to grow and better position it to withstand the risks associated with the current economic conditions."

Royalty income for the fourth quarter of 2023 increased by 5.1 per cent in Q4 2023 and 5.3 per cent year to date, as compared with the comparable periods in 2022. The royalty income for Q4 2023 was $17,045,000 and is based on gross sales reported by A&W restaurants in the royalty pool of $568,161,000, compared with royalty income of $16,218,000 and gross sales reported by A&W restaurants in the royalty pool of $540,598,000 for the fourth quarter of 2022. Annual royalty income was $54,962,000 based on gross sales reported by A&W restaurants in the royalty pool of $1,832,069,000, compared with royalty income of $52,181,000 and gross sales reported by A&W restaurants in the royalty pool of $1,739,377,000 for 2022.

The increase in royalty income for the quarter and year-to-date period was driven by royalty pool same-store sales growth, which was plus 2.1 per cent for the quarter and plus 2.7 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 in the quarter was also impacted by there being one additional day in the fourth quarter of 2023 as compared with the fourth quarter 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 due to industry-wide inflation on goods, services and labour, a rebound in sales at shopping centre and urban locations, and innovative new menu items such as the A&W Brew Bar.

Four monthly distributions totalling 64 cents per unit were declared in the fourth quarter of 2023 compared with four monthly distributions totalling 63.5 cents per unit in the fourth quarter of 2022. Twelve monthly distributions totalling $1.92 per unit were declared in 2023 compared with 12 monthly distributions totalling $1.875 per unit 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 for the fourth quarter of 2023 was 89.9 per cent compared with 90.3 per cent for the fourth quarter of 2022. The payout ratio for 2023 was 91.8 per cent compared with 96.6 per cent for the comparable period in 2022.

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 food service 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, 2024, at which time the number of restaurants in the royalty pool increased from 1,037 to 1,047.

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.