A&W Revenue Royalties Income Fund

    Frequently Asked Questions

    What is the current distribution?

    The current monthly distribution is $0.133 per unit per month which equates to an annualized rate of $1.596 per unit. Distributions are paid on the last business day of each month. Click here to view recent distributions.

    Are fund distributions taxable?

    Distributions are taxed as non-eligible dividends.Click here for 2015 Tax Information [pdf 91KB / 1 page].

    Why is the distribution paid January 29, 2016 included in 2015 taxable income?

    The income reported on the 2015 T3's provided to unitholders of record on December 31, 2015 includes the distribution of 12.5 cents per unit for the period December 1 to 31, 2015. As distributions are paid monthly in arrears, this distribution of December's income was paid on January 29, 2016.

    When will distributions be further increased?

    The ability to increase distributions depends on the same store sales growth of the restaurants in the royalty pool and management of the Fund's general and administrative expenses, as well as the accretion from the royalties of the new restaurants added to the pool each January.

    What are A&W's anticipated sales for the coming year?

    We do not provide estimates of future sales. 2015 gross sales for the 814 A&W restaurants in the royalty pool during 2015 were $1,061 million. On January 5, 2016, the number of A&W restaurants for which royalties are paid was increased by 32 new restaurants less 8 restaurants which permanently closed during 2015, bringing the total number of restaurants in the royalty pool to 838.

    Does the Fund pay management fees?

    There are no management fees charged by Food Services; however the Fund and Trade Marks incur general and administrative costs, as well as interest on a $60 million term loan.

    When will new restaurants be added to the royalty pool?

    Once per year, the Fund (through Trade Marks and the Partnership) will purchase the royalty stream from new restaurants opened by A&W Food Services of Canada Inc. (Food Services) in the prior year, net of the royalty stream of any A&W restaurants that have closed. The Partnership will pay Food Services, in the form of securities that are exchangeable for units of the Fund, 92.5% of an amount that is based on the royalty stream from the net new restaurants and the yield on the units of the Fund. The formula is designed to be accretive to unitholders. In 2015 royalties were based on 814 restaurants in the royalty pool. On January 5, 2016, the number of A&W restaurants for which royalties are paid was increased by 32 new restaurants less 8 restaurants which permanently closed during 2015, bringing the total number of restaurants in the royalty pool to 838

    What is distributable cash and how is it calculated?

    Distributable cash is a common term used by income funds to describe the amount of cash that is available to meet distribution obligations of the Fund. Distributable cash is calculated as the operating cash flows of the Fund, adjusted for changes in non-cash working capital.

    What is A&W Food Services of Canada Inc.'s ownership in the Fund?

    Effective January 5, 2016, Food Services owns the equivalent of 21.0% of the units of the Fund on a fully diluted basis.

    Why do the number of restaurant openings and closures vary between A&W Food Services of Canada Inc. and the Fund?

    The number of restaurant openings and closings will vary between Food Services and the Fund, as the period for which they are calculated varies slightly.

    Why is there a difference in the number of restaurants and sales in the royalty pool and the total number of restaurants and total sales reported by A&W Food Services of Canada Inc.?

    The royalty pool is adjusted in January of each year to include the revenue stream from restaurants which opened in the 12-month period ending September of the prior year. For example, on January 5, 2016, the number of restaurants for which royalties were paid to the Fund was increased by 32 new restaurants which opened prior to September 2015, less 8 restaurants which permanently closed during 2015. Restaurants that opened after September 2015 will not be included in the royalty pool until January 2017. Therefore at any given time there are A&W restaurants which are not in the royalty pool.

    How can I purchase units of A&W Revenue Royalties Income Fund?

    Units are traded on the Toronto Stock Exchange under the symbol AW.UN. There are currently 12,131,373 units outstanding. To purchase units, contact any Canadian brokerage firm.

    Does the Fund have a Dividend Reinvestment Program (DRIP) available to unitholders?

    No, but your brokerage firm may offer a feature simillar to a DRIP which allows investors to rollover monthly cash distributions for additional Fund units.

    Are share certificates issued for the units?

    Share certificates are not issued for the units.

    How can I contact the A&W Revenue Royalties Income Fund?

    For more information about the A&W Revenue Royalties Income Fund, please contact:

    Don Leslie
    A&W Revenue Royalties Income Fund
    #300 - 171 West Esplanade
    North Vancouver, BC V7M 3K9
    Phone: (604) 988-2141
    Fax: (604) 988-5531
    Email: investorrelations@aw.ca

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