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A&W Revenue Royalties Income Fund
 
Highlights
Structure of the Fund
Key Industry Indicators
Trustees
Corporate Governance

Structure of the Fund

The source of income for the A&W Revenue Royalties Income Fund (the Fund) is through its ownership in A&W Trade Marks Inc. (Trade Marks) which is the general partner with a 99.9% interest in A&W Trade Marks Limited Partnership (the Partnership). The Partnership owns the A&W trade-marks and licences these trade-marks to A&W Food Services of Canada Inc. (A&W Food Services) for use in operating and franchising A&W restaurants. In return, A&W Food Services pays the Partnership a top-line royalty of 3% of sales from A&W restaurants in the Royalty Pool.

A&W Food Services continues to build and develop the A&W trade-marks and open new restaurants. Each year, the Royalty Pool is adjusted to include the future royalty streams from new restaurants, net of the sales of any A&W restaurants that have permanently closed. The Partnership pays A&W Food Services for the additional royalty stream from the net new restaurants in the form of an increase in Food Services limited partnership in the Partnership.

In the event that a restaurant in the Royalty Pool closes, A&W Food Services pays the royalties that would have been paid to the Partnership if the restaurant had not closed, until the next adjustment to the Royalty Pool.

A&W Food Services currently owns 10% of Trade Marks and has the option to convert its ownership in Trade Marks into Units by exchanging the securities it holds for Units.

Click here to view a diagram of the structure of the Fund.

The Fund is a top-line fund. The Fund does not operate A&W restaurants. It simply owns an investment in Trade Marks which indirectly owns the A&W trade-marks and licences them to A&W Food Services.

© 2009 A&W Trade Marks Limited Partnership