Monthly distributions are paid on the last business day of each month. Click here to view recent distributions. Growth in the Fund is achieved in two ways: First, and most importantly, by increasing the same store sales of the restaurants in the royalty pool, and secondly by adding new restaurants to the pool each year.
Distributions are taxed as non-eligible dividends. Click here for 2022 Tax Information.
The income reported on the 2022 T3s provided to unitholders of record on December 31, 2022 includes the distribution of 16.0 cents per unit for the period December 1 to 31, 2022. As distributions are paid monthly in arrears, this distribution of December's income was paid on January 31, 2023.
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 net new restaurants added to the pool each January.
We do not provide estimates of future sales. 2022 Gross Sales reported by A&W restaurants in the Royalty Pool(1) were $1,739 million. For 2023, on January 5, 2023, the number of A&W restaurants for which royalties are paid was increased by 29 new restaurants less 7 restaurants which permanently closed, bringing the total number of restaurants in the royalty pool to 1,037.
Trade Marks’ general and administrative expenses include the expenses of the Fund as the Fund has entered into an administration agreement with Trade Marks whereby Trade Marks, at its expense, provides or arranges for the provision of services required in the administration of the Fund. On April 8, 2022, Trade Marks and Food Services entered into an agreement for Food Services to provide administrative services to Trade Marks (the “Services Agreement”). Under the terms of the Services Agreement, Food Services is entitled to be paid an annual fee, on a quarterly basis, for the services provided in each fiscal year in an amount approved by the board of directors of Trade Marks that is based on a prescribed time and effort computation.
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 2022 royalties were based on 1,015 restaurants in the royalty pool. On January 5, 2023, the number of A&W restaurants for which royalties are paid was increased by 29 new restaurants less 7 restaurants which permanently closed, bringing the total number of restaurants in the royalty pool to 1,037.
Distributable cash generated is a non-IFRS financial measure and is calculated as royalty income less cash expenses. Distributable cash generated can be reconciled to net cash flows generated from operating activities by adjusting for interest, current income taxes, financing fees paid and net changes in items of working capital. See the “Non-IFRS Measures” section of the Fund's MD&A for the fourth quarter ended December 31, 2022, for further details on how Distributable cash generated is calculated and used to assess the Fund's performance.
Effective January 5, 2023, Food Services owns the equivalent of 28.1% of the units of the Fund on a fully diluted basis.
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.
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, 2023, the number of restaurants for which royalties were paid to the Fund was increased by 29 new restaurants which opened prior to September 2022, less 7 restaurants which permanently closed. Restaurants that opened after September 2022 will not be included in the royalty pool until January 2024. Therefore at any given time there are A&W restaurants which are not in the royalty pool.
Units are traded on the Toronto Stock Exchange under the symbol AW.UN. There are currently 14,585,673 units outstanding. To purchase units, contact any Canadian brokerage firm.
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.
Share certificates are not issued for the units.
For more information about the A&W Revenue Royalties Income Fund, please contact:
Kelly Blankstein, CFO (CPA)
A&W Revenue Royalties Income Fund
#300 - 171 West Esplanade
North Vancouver, BC V7M 3K9
Phone: (604) 988-2141
(1) "Gross Sales reported by A&W restaurants in the Royalty Pool” is a non-IFRS supplementary financial measure. See the “Non-IFRS Measures” section of the Fund's MD&A for the fourth quarter ended December 31, 2022, for further details on how this measure is calculated and used to assess the Fund's performance.
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