Mr. Marc Guay reports

BOSTON PIZZA ROYALTIES INCOME FUND ANNOUNCES 2023 FOURTH QUARTER AND ANNUAL RESULTS AND 5.6% INCREASE TO MONTHLY CASH DISTRIBUTIONS TO UNITHOLDERS

Boston Pizza Royalties Income Fund and Boston Pizza International Inc. (BPI) have released financial results for the fourth quarter period from Oct. 1, 2023, to Dec. 31, 2023, and for the year from Jan. 1, 2023, to Dec. 31, 2023. A copy of this press release, the audited annual consolidated financial statements, related Management's Discussion and Analysis ("MD&A") of the fund and BPI and the Annual Information Form of the fund are available at www.sedarplus.ca and www.bpincomefund.com. The fund will host a conference call to discuss the results on February 14, 2024 at 8:30 am Pacific Time (11:30 am Eastern Time). The call can be accessed by dialling 1-800-319-4610 or 604-638-5340. A replay will be available until March 14, 2024 by dialling 1-800-319-6413 or 604-638-9010 and entering the access code: 0605 followed by the # sign. The replay will also be available at www.bpincomefund.com. Capitalized terms used in this press release that are not otherwise defined have the meanings ascribed to them in the fund's MD&A for the period and the year.

HIGHLIGHTS

• Franchise Sales1 of $227.7-million for the period and $925.7-million for the year, representing an increase of 0.2 per cent and 8.3 per cent, respectively, versus the same periods one year ago.
  • Same Restaurant Sales2 of 0.6 per cent for the period and 8.7 per cent for the year.
• Cash flows generated from operating activities of $9.3-million for the period and $37.9-million for the year, representing an increase of 4.1 per cent and 10.4 per cent, respectively, versus the same periods one year ago.
• Distributable Cash3 increased 1.8 per cent for the period and 19.8 per cent for the year, and Distributable Cash per unit4 increased 3.0 per cent for the period and 20.4 per cent for the year.
• Payout Ratio5 of 92.7 per cent for the period and 88.6 per cent for the year. Cash balance at the end of the period was $4.6-million.
• On April 5, 2023, the fund increased its monthly distribution rate to $0.107 per unit of the fund ("Unit") for the March 2023 distribution from the previous monthly rate of $0.102 per unit, being an increase of $0.005 per unit or 4.9 per cent.
• In December 2023, the first new Boston Pizza restaurant opened since 2020.
• On February 13, 2024, the trustees of the fund declared a distribution for the period of January 1, 2024 to January 31, 2024 of $0.113 per unit, which is payable on February 29, 2024 to unitholders of the fund ("Unitholders") of record on February 21, 2024. This is an increase of $0.006 per unit, or 5.6 per cent, from the previous monthly distribution rate of $0.107 per unit. On an annualized basis, the new monthly distribution rate equates to $1.356 per unit compared with $1.284 per unit for the previously monthly distribution rate.

"We are pleased to announce a 5.6 per cent increase to the monthly cash distribution rate to Unitholders to a new rate of $0.113 per unit the highest level since COVID-19." said Marc Guay, Chair of the Board of Trustees. "The strong financial performance of Boston Pizza International Inc. and the fund in 2023, along with the fund's growing cash balance, have enabled the trustees of the fund to increase the monthly distribution rate payable to Unitholders. While this demonstrates the resiliency of the Boston Pizza system, the trustees of the fund remain cautious and will continue to closely monitor the fund's available cash balances and distribution levels, based on our goal of stable and sustainable distribution flow to Unitholders."

In deciding to increase monthly cash distributions from $0.107 per unit to $0.113 per unit, the trustees of the fund considered, among other factors, the recent financial performance of the fund, Boston Pizza International Inc. and Boston Pizza restaurants in the fund's Royalty Pool, the fund's cash position and debt repayment obligations, internal financial projections for the fund and Boston Pizza restaurants in the fund's Royalty Pool for the remainder of 2024 and beyond.

COVID-19 impacted the business of the fund, BPI and Boston Pizza Canada Limited Partnership ("BP Canada LP"), and the operation of Boston Pizza restaurants significantly during 2020, 2021 and the first half of 2022. Since then, COVID-19 case counts improved, government restrictions related to COVID-19 were largely eliminated, and sales levels of Boston Pizza restaurants have returned to levels more consistent with times prior to COVID-19.

"We are pleased that the strong Franchise Sales in the first quarter of 2023 carried on throughout 2023 despite ongoing economic uncertainty, inflationary pressures and high interest rates," said Jordan Holm, President of BPI. "We ended 2023 with the first opening of a new Boston Pizza restaurant since 2020. This significant landmark is a testament to the strength and future growth of the Boston Pizza brand. We are dedicated to the continued success of the Boston Pizza brand and our restaurant network."

PERIOD AND YEAR RESULTS

SRS, a key driver of distribution growth for Unitholders, was 0.6 per cent for the period compared with 24.5 per cent reported in the fourth quarter of 2022. SRS for the period was principally due to an increase in average guest cheque due to menu pricing. SRS was 8.7 per cent for the year compared with 30.4 per cent reported in 2022. SRS for the year was principally due to increases in restaurant guest traffic compared with 2022 and average guest cheque due to a combination of menu pricing and larger per guest ordering levels. COVID-19 restrictions existed in most of the country during 2021, the first quarter of 2022 and part of the second quarter of 2022 that negatively impacted in-restaurant guest traffic. Those restrictions were largely eliminated during the second quarter of 2022. The COVID-19 restrictions that existed during 2021 were a significant factor in why SRS in 2022 is greater than SRS in 2023.

Franchise Sales of Boston Pizza restaurants in the Royalty Pool were $227.7-million for the period and $925.7-million for the year compared with $227.2-million and $855.0-million, respectively, for the same periods in 2022. The $0.5-million increase in Franchise Sales for the period and $70.7-million increase in Franchise Sales for the year were primarily due to positive SRS.

The fund's net and comprehensive income was $5.2-million for the period compared with $6.4-million for the fourth quarter of 2022. The $1.2-million decrease in the fund's net and comprehensive income for the period compared with the fourth quarter of 2022 was primarily due to a $1.2-million increase in fair value loss and $0.2-million increase in income tax expense for the period, partially offset by a $0.2-million decrease in interest expense on Class B Unit liability. The fund's net and comprehensive income was $29.6-million for the year compared with $30.6-million in 2022. The $1.0-million decrease in the fund's net and comprehensive income for the year compared with the same period in 2022 was primarily due to a $3.5-million increase in fair value loss and $1.3-million increase in income tax expense for the period, partially offset by a $3.7-million increase in Royalty6 and Distribution Income7.

The fund's cash flows generated from operating activities for the period was $9.3-million compared with $8.9-million in the fourth quarter of 2022. The increase of $0.4-million was primarily due to an increase in changes in working capital of $0.2-million and a decrease in income taxes paid of $0.2-million. The fund's cash flows generated from operating activities for the year was $37.9-million compared with $34.4-million in the same period in 2022. The increase of $3.5-million was primarily due to an increase of Royalty and Distribution Income of $3.7-million and an increase in changes in working capital of $0.8-million, partially offset by an increase in income taxes paid of $1.1-million.

The fund generated Distributable Cash of $7.4-million for the period compared with $7.2-million for the fourth quarter of 2022. The increase in Distributable Cash of $0.2-million or 1.8 per cent was primarily due to increased cash flows generated from operating activities of $0.4-million, partially offset by a SIFT Tax on Units3 adjustment of $0.2-million. The fund generated Distributable Cash of $30.7-million for the year compared with $25.6-million in 2022. The increase in Distributable Cash of $5.1-million or 19.8 per cent was primarily due to increased cash flows generated from operating activities of $3.5-million, lower repayments of debt of $1.5-million and lower interest paid on debt of $0.2-million, partially offset by increased BPI Class B Unit entitlement8 of $0.2-million.

The fund generated Distributable Cash per unit of $0.346 for the period compared with $0.336 per unit for the fourth quarter of 2022. The increase in Distributable Cash per unit of $0.010 or 3.0 per cent was primarily attributable to the increase in Distributable Cash outlined above and fewer Units outstanding compared with the same period in 2022 due to the normal course issuer bid through the Toronto Stock Exchange that commenced on June 20, 2023 under which the fund acquired and cancelled a total of 242,900 Units (the "NCIB"). The fund generated Distributable Cash per unit of $1.432 for the year compared with $1.189 per unit in 2022. The increase in Distributable Cash per unit of $0.243 or 20.4 per cent was primarily attributable to the increase in Distributable Cash outlined above and fewer Units outstanding compared with the same period in 2022 due to the NCIB.

The fund's Payout Ratio for the period was 92.7 per cent compared with 115.1 per cent in the fourth quarter of 2022. The decrease in the fund's Payout Ratio for the period was due to distributions paid decreasing by $1.5-million or 18.0 per cent as a result of the 2022 Special Distribution (defined below) and Distributable Cash increasing by $0.2-million or 1.8 per cent. During the year, the fund's Payout Ratio was 88.6 per cent compared with 99.4 per cent in 2022. The decrease in the fund's Payout Ratio for the year was due to Distributable Cash increasing by $5.1-million or 19.8 per cent, partially offset by distributions paid increasing by $1.8-million or 6.8 per cent. The fund's Payout Ratio is typically higher in the first and fourth quarters compared with the second and third quarters since Boston Pizza restaurants generally experience higher Franchise Sales levels during the summer months when restaurants open their patios and benefit from increased tourist traffic.

DISTRIBUTIONS

During the period, the fund declared distributions on the Units in the aggregate amount of $9.1-million or $0.428 per unit. During the fourth quarter of 2022, the fund declared distributions on the Units in the aggregate amount of $10.5-million or $0.489 per unit. During the period, the fund paid distributions on the Units in the aggregate amount of $6.8-million or $0.321 per unit. During the fourth quarter of 2022, the fund paid distributions on the Units in the aggregate amount of $8.3-million or $0.387 per unit. The amount of distributions declared during the period decreased by $1.4-million or $0.061 per unit due to the special one-time cash distribution to Unitholders of $0.085 per unit, which was declared on December 8, 2022 and was paid on December 30, 2022 (the "2022 Special Distribution"), partially offset by the monthly distribution rate increasing from $0.100 per unit to $0.102 per unit commencing with the November 2022 distribution (the "November 2022 Distribution Increase"), and increasing again from $0.102 per unit to $0.107 per unit commencing with the March 2023 distribution (the "March 2023 Distribution Increase"). Distributions paid during the period decreased by $1.5-million or $0.066 per unit due to the 2022 Special Distribution, partially offset by the November 2022 Distribution Increase and the March 2023 Distribution Increase.

During the year, the fund declared distributions on the Units in the aggregate amount of $27.3-million or $1.274 per unit. During the same period in 2022, the fund declared distributions on the Units in the aggregate amount of $25.8-million or $1.199 per unit. During the year, the fund paid distributions on the Units in the aggregate amount of $27.2-million or $1.269. During the same period in 2022, the fund paid distributions on the Units in the aggregate amount of $25.4-million or $1.182 per unit. The amount of distributions declared for the year increased by $1.5-million or $0.075 per unit due to the monthly distribution rate increasing from $0.085 per unit to $0.100 per unit commencing with the July 2022 distribution, the November 2022 Distribution Increase and the March 2023 Distribution Increase (collectively, the "2022-2023 Distribution Increases"), partially offset by the 2022 Special Distribution. Distributions paid for the year increased by $1.8-million or $0.087 per unit due to the 2022-2023 Distribution Increases, partially offset by the 2022 Special Distribution.

The fund pays distributions on the Units in respect of any calendar month not later than the last business day of the immediately subsequent month. Consequently, monthly distributions payable by the fund on the Units in respect of the period were the October 2023 distribution (which was paid on November 30, 2023), the November, 2023, distribution (which was paid on December 29, 2023) and the December 2023 distribution (which was paid on January 31, 2024). Similarly, the distributions payable by the fund on the Units in respect of any other period are paid in the immediately subsequent month of such period.

On February 13, 2024, the trustees of the fund declared a distribution for the period of January 1, 2024 to January 31, 2024 of $0.113 per unit, which will be payable on February 29, 2024 to Unitholders of record on February 21, 2024. This is an increase of $0.006 per unit, or 5.6 per cent, from the previous monthly distribution rate of $0.107 per unit. On an annualized basis, the new monthly distribution rate equates to $1.356 per unit compared with $1.284 per unit for the previously monthly distribution rate. Including the January 2024 distribution, which will be paid on February 29, 2024, the fund will have paid out total distributions of $425.2-million or $26.13 per unit, which includes 253 monthly distributions and two special distributions.

FINANCIAL SUMMARY

The tables below set out selected information from the fund's audited annual consolidated financial statements together with other data and should be read in conjunction with the audited annual consolidated financial statements and MD&A of the fund for the years ended December 31, 2023 and 2022.

SHORT-TERM OUTLOOK

The two principal factors that affect SRS are changes in guest traffic and changes in average guest cheque. BPI's and BP Canada LP's strategies to drive higher guest traffic include attracting a wide variety of guests into the restaurant, sports bar and take-out and delivery parts of each location, offering a compelling value proposition to guests and leveraging a larger marketing budget versus the previous year along with a revised calendar of national and local store promotions. Increased average cheque levels are expected to be achieved through a combination of culinary innovation and menu re-pricing.

The success of BPI, BP Canada LP and Boston Pizza restaurants, and the amount of Franchise Sales, Royalty, Distribution Income and Distributable Cash available for distribution to Unitholders, are dependent upon many economic factors, including impacts of inflation, increases in interest rates, unemployment rates, consumer confidence, recession, supply chain disruption, labour availability and other globally disruptive events. Despite the current state of economic uncertainty, Boston Pizza restaurants have been able to generate solid Franchise Sales and offer affordable dining options, both on and off-premise, for guests in economically uncertain times. As demonstrated during COVID-19, BPI, BP Canada LP and Boston Pizza restaurants have the ability to adapt to changes in operating environments and economic conditions. However, with supply chain challenges, rising interest rates, increasing input costs and labour shortages impacting most of the restaurant industry, together with widespread focus on sustainability and climate-related issues, BPI's management remains cautious. The focus of BPI's management is to adapt the business to mitigate these challenges and maintain the positive sales momentum achieved in 2023.

The trustees of the fund will continue to closely monitor the fund's available cash balances given the uncertain economic outlook and industry challenges.

We seek Safe Harbor.