Boston Pizza Royalties Income Fund & Boston Pizza International Announce New Store Roll-in
VANCOUVER, BC, JANUARY 3, 2003 – Boston Pizza Royalties Income Fund (TSX: BPF.UN) (the "Fund") and Boston Pizza International Inc. ("BPI") are pleased to announce that, as of January 1, 2003, eight Boston Pizza restaurants, opened during the period May 1 – November 1, 2002, have been added to the pool of Boston Pizza restaurants (the "Royalty Pool") on which Boston Pizza Royalties Limited Partnership (the "LP"), an affiliate of the Fund, earns royalty revenue equal to 4% of the franchise revenue of these restaurants. The eight additional restaurants bring the total number of Boston Pizza restaurants in the Royalty Pool to 162.
In return for adding these eight restaurants to the Royalty Pool, BPI has received the right to acquire an additional 448,273 Fund Units (the "Additional Fund Units"), being 4.46% of the Fund Units on a fully diluted basis, on exchange of securities of the LP which are convertible into Fund Units. BPI will also receive a proportionate increase in monthly distributions from the LP. The number of Additional Fund Units was determined using the estimated royalty revenue that will be added to the Royalty Pool in 2003 as a consequence of this transaction. Once the actual performance of the eight restaurants during 2003 is known, the number of Fund Units that BPI has the right to acquire will be adjusted so that total number of Fund Units that BPI has the right to receive in return for the addition of the eight restaurants to the Royalty Pool is based on 92.5% of the actual royalty revenue added to the Royalty Pool. The Additional Fund Units represent 80% of the total number of Fund Units that BPI will have the right to receive in the event that the actual royalty revenue from these additional restaurants is equal to the estimated royalty revenue.
Including the Additional Fund Units described above, BPI has the right to exchange its securities of the LP for 2,372,206 Fund Units, representing 23.575% of the Fund Units on a fully diluted basis. BPI does not own, either directly or indirectly or through any joint actors any additional Fund Units or securities convertible into Fund Units. BPI has agreed to maintain at least a 20% ownership interest, direct or indirect, in the Fund until such time as there are 275 restaurants in the Royalty Pool.
The Fund is a limited purpose, open-ended trust established under the laws of British Columbia to acquire indirectly certain trade marks and trade names used by BPI in its Boston Pizza restaurants in Canada. The trade marks are licensed to BPI for 99 years for which BPI pays the Fund 4% of franchise revenues of its 162 Boston Pizza restaurants in Canada as at January 1, 2003. The Royalty Pool of the Fund will be adjusted annually to include the new Boston Pizza restaurants opened prior to November 1 of each year.
"Of the eight new stores added, 3 were in the Eastern Canadian market in Brampton, ON, St. Catherines, ON and Niagara Falls, ON", says Mike Cordoba, President and COO of BPI. This brings the number of restaurants opened in Eastern Canada to 23, with 21 in Ontario and 2 in the Maritimes. "We also continue to grow within existing Western Canadian markets," adds Cordoba, referring to the 5 new openings in Langford, BC, St. Paul, AB, Lacombe, AB, St. Albert, AB and Lethbridge, AB.
BPI continues to operate the Boston Pizza franchise system, develop new Boston Pizza restaurants throughout Canada, and remains Canada’s number one casual dining brand in terms of customer visits per year. The success of the Boston Pizza franchise system for over 39 years has been underpinned by BPI’s strategic focus on the development of successful franchise operations.
BPI is located at 5500 Parkwood Way, Richmond, B.C. V6V 2M4.
FOR FURTHER INFORMATION, PLEASE CONTACT:
Director, Investor Relations
® Boston Pizza Royalties Limited Partnership. All Boston Pizza registered Canadian trade-marks and unregistered Canadian trade-marks containing the words "Boston", "BP", and/or "Pizza" are trade-marks owned by the Boston Pizza Royalties Limited Partnership and licensed by the Boston Pizza Royalties Limited Partnership to Boston Pizza International Inc.
© Boston Pizza International Inc. 2003