Boston Pizza Royalties Income Fund & Boston Pizza International Inc. Announce 2006 First Quarter Results

BOSTON PIZZA ROYALTIES INCOME FUND & BOSTON PIZZA INTERNATIONAL INC.
ANNOUNCE 2006 FIRST QUARTER RESULTS

Boston Pizza has a Strong First Quarter Posting 12.7% Same Store Sales Growth
Overall Franchise Sales Growth 28.1%

VANCOUVER, BC, (May 8, 2006) - Boston Pizza Royalties Income Fund (the "Fund") and Boston Pizza International Inc. (“BPI”) each reported today first quarter financial results for the period of January 1, 2006 to March 31, 2006 (the “Period”). A copy of the combined 2006 first quarter report is available at www.sedar.com and www.bpincomefund.com. Same Store Sales Growth (“SSSG”), the key metric for revenue growth of the Fund, was 12.7% for the Period. Overall growth in Franchise Sales of royalty pooled restaurants, a combination of new restaurants added to the royalty pool and SSSG, was 28.1%. Royalty income for the Period was $4,549,532 and distributions of $0.21 per unit were declared. Distributions declared per unit rose during the Period by 10.5% compared with the first quarter of 2005 in which distributions declared were $0.19 per unit.

Boston Pizza continued to expand its presence across Canada opening six new Boston Pizza restaurants during the Period, with no restaurants being closed. Subsequent to the Period an additional seven restaurants were opened. For 2005 the company opened 31 new restaurants; more than any other year in Boston Pizza’s history. As of May 8, 2006, BPI has 239 restaurants open across Canada of which 226 restaurants are in the Royalty Pool.

“The first quarter of 2006 was one of the best quarters for Boston Pizza since the IPO in 2002. We continued to open new restaurants, deliver very strong same store sales growth, and we were very pleased to pass on these successes to our Unitholders in the form of increased distributions.” said Mike Cordoba, Chief Executive Officer of Boston Pizza.

The following table sets out selected historical information and other data from the financial statements of the Fund and the Boston Pizza Royalties Limited Partnership (the “Partnership”), which should be read in conjunction with the attached consolidated financial statements of the Fund.

	January 1, 2006 to March 31, 2006	January 1, 2005 to March 31, 2005
(in thousands of dollars – except restaurants and per unit items)
Number of restaurants in Royalty Pool	226	195
Franchise Sales reported by restaurants in Royalty Pool	$113,738	$88,780
Royalty Income – 4% of Franchise Sales of Royalty Pool Restaurants	$4,550	$3,551
Partnership administrative and interest expenses	$231	$196
Partnership earnings for the period before undernoted	$4,319	$3,355
BPI’s interest	$1,642	$1,332
Equity income related to BPI royalties earned by the Fund	$2,677	$2,023
Interest income	$450	$450
Net earnings	$3,127	$2,473
Earnings per Fund unit	$0.31	$0.27
Diluted earnings per Fund unit	$0.31	$0.27
Distributions declared per Fund unit	$0.21	$0.19
Same store sales growth	12.7%	4.8%
Number of restaurants opened during Period	6	3
Number of restaurants closed during Period	0	0

OUTLOOK
Going forward BPI management continues to focus on opening new stores and delivering industry-leading SSSG. BPI estimates that it will open approximately 40 restaurants in 2006. With strong growth in Ontario and Quebec, there is a possibility that Boston Pizza will exceed 275 restaurants this year. Through strong television and radio advertising, and national and local promotions, BPI management believes that the organization can deliver strong SSSG, the most important metric to Unitholders. As part of the ongoing SSSG initiative, Boston Pizza will continue its unique renovation program that requires each location to renovate every seven years. BPI anticipates that a total of up to 32 renovations will be completed in 2006, an increase from the previous estimate of 24 to 29 renovations. Historically SSSG for renovated locations has been, on average, 10-15% post-renovation.
BPI management remains confident that Boston Pizza will continue to enhance its position as Canada’s number one casual dining brand.

The Fund is a limited purpose, open-ended trust established under the laws of British Columbia to acquire indirectly certain trademarks and trade names used by BPI in its Boston Pizza restaurants in Canada. The trademarks are licensed to BPI for 99 years for which BPI pays the Fund 4% of franchise revenues of royalty pooled restaurants. As of January 1, 2006 there are 226 restaurants in the royalty pool.
Certain statements in this quarterly report may constitute “forward looking” statements that involve known and unknown risks, uncertainties, future expectations and other factors which may cause the actual results, performance or achievements of the Fund, the Boston Pizza Holdings Trust, the Partnership, BPI, Boston Pizza restaurants, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. When used in this quarterly report, such statements use such words as “may”, “will”, “expect”, “believe”, “plan” and other similar terminology. These statements reflect current expectations regarding future events and operating performance and speak only as of the date of this quarterly report. These forward looking statements involve a number of risks, uncertainties and future expectations including, but not limited to the risks and uncertainties set out above in “Risks & Uncertainties” and in the Fund’s Annual Information Form under “Risks Related to the Structure of the Fund”. This quarterly report discusses some of the factors that could cause actual results to differ materially from those expressed in or underlying such forward looking statements. Forward looking statements are made as of the date hereof and we assume no obligation to update or revise them to reflect new events or circumstances.

The Trustees of the Fund have approved the contents of this press release.

	March 31, 2006 (unaudited)	December 31, 2005
Assets Current assets: Cash Interest receivable on note receivable from Boston Pizza International Inc. Distributions receivable from Boston Pizza Royalties Limited Partnership	$ 1,430 150,000 -	$1,415 150,000 828,173
	151,430	979,588
Note receivable from Boston Pizza International Inc.	24,000,000	24,000,000
Investment in Boston Pizza Royalties Limited Partnership (note 3)	99,588,876	77,100,557
	$123,740,306	$ 102,080,145
Liabilities and Unitholders' Equity Current liabilities Accounts payable and accrued liabilities Distributions payable to Fund unitholders	$50 -	$50 978,169
	50	978,219
Unitholders' equity: Fund units Retained earnings	$122,606,237 1,134,019	100,829,377 272,549
	123,740,256	101,101,926
	$123,740,306	$102,080,145
Contingency (note 4) See accompanying notes to consolidated financial statements.

BOSTON PIZZA ROYALTIES INCOME FUND
Consolidated Statements of Earnings
(Unaudited)

	2006	2005
Revenue (note 2(a)): Equity income related to BPI royalties Interest income	$2,676,780 450,010	$2,023,086 450,010
Net Earnings	$3,126,790	$2,473,096
Weighted average units outstanding Basic and diluted earnings per Fund unit	10,238,735 $0.31	$9,111,141 $0.27

Consolidated Statements of Retained Earnings (Unaudited) Three months ended March 31, 2006 and 2005
	2006	2005
Retained earnings, beginning of period Net earnings Distributions declared to Fund unitholders	$ 272,549 3,126,790 (2,265,320)	$208,127 2,473,096 (1,780,587)
Balance, end of period	$1,134,049	$900,636
See accompanying notes to consolidated financial statements.

BOSTON PIZZA ROYALTIES INCOME FUND
Consolidated Statements of Cash Flows
(Unaudited)

	2006	2005
Cash provided by (used in): Operations: Net earnings Equity earnings, an item not affecting cash Distributions received from Boston Pizza Royalties Limited Partnership	$ 3,126,790 (2,676,780) 2,793,494	$2,473,096 (2,023,086) 2,174,655
	3,243,504	2,624,665
Financing: Distributions paid to Fund unitholders	(3,243,489)	(2,624,650)
Increase in cash Cash, beginning of period Cash, end of period	15 1,415 $ 1,430	15 1,356 $ 1,371
Supplementary information: Non-cash financing and investing activities: Issuance of Fund units to acquire additional interest in Boston Pizza Royalties Limited Partnership	$ 21,776,860	$ 14,237,327
See accompanying notes to consolidated financial statements

1. Basis of presentation:
These interim consolidated financial statements have been prepared using Canadian generally accepted accounting principles.
The disclosures in these statements do not include all the disclosure requirements of Canadian generally accepted accounting principles for annual financial statements. These statements should be read in conjunction with the significant accounting policies and other information in the Fund’s most recent annual financial statements. These statements follow the same accounting policies and methods of their application as the most recent annual financial statements.

2. Operations:
(a) Franchise sales reported by Boston Pizza Restaurants in the Royalty Pool during the period ended March 31, 2006 is $113,738,297 (2005 - $88,780,475).
Equity and interest income earned by the Fund has been derived as follows:

	January 1, 2006 to March 31, 2006	January 1, 2005 to March 31, 2005
(in thousands of dollars, except number of restaurants in the Royalty Pool and earnings per Fund unit)
Restaurants in the Royalty Pool	226	195
Franchise sales reported by restaurants in the Royalty Pool	$ 113,738	$ 88,780
Royalty income – 4% of Franchise sales Administrative and interest expenses	$4,550 (231)	$3,555 (196)
Partnership earnings for the period before undernoted BPI’s interest	4,319 (1,642)	3,355 (1,332)
Equity income related to BPI royalties earned by Fund Interest Income	2,677 450	2,023 450
Net earnings	$ 3,127	$ 2,473
Basic and diluted earnings per Fund unit	$ 0.31	$ 0.27

2. Operations (continued):

(b) On January 1, 2006, adjustments to royalty payments and Additional Entitlement were made based on the actual performance of eighteen restaurants added to the Royalty Pool on January 1, 2005. Based on these adjustments, BPI received its pro rata portion of the remaining Additional Entitlement, being 115,977 Fund units.

(c) On January 1, 2006, 31 new Boston Pizza restaurants opened during the period from November 2, 2004 to December 31, 2005, were added to the Royalty Pool. The Franchise sales of these 31 new restaurants has been estimated at $61.1 million. The total number of restaurants in the Royalty Pool has increased to 226. The yield of the Fund units was determined to be 7.61% calculated using a weighted average unit price of $15.59. Weighted average unit price is calculated based on the market price of the unit traded on the TSX Stock Exchange during the period of twenty consecutive days ending on the fifth trading day before January 1, 2006. As a result of the contribution of the additional net sales to the Royalty Pool, and assuming 100% of the Additional Entitlement, BPI’s Additional Entitlement is equivalent to 1,904,808 (2005 - 1,292,182) Fund units. BPI will also receive a proportionate increase in monthly distributions from the Partnership. Of the Additional Entitlement, 20% (2006 - 380,962 units; 2005 - 258,436 units), remain unissued and are not eligible for conversion to Fund units until January 1, 2007 (2005 units - January 1, 2006) based on the actual performance of the new stores.

(d) On February 17, 2006, BPI exchanged Class B Partnership units for 1,311,859 Fund units. BPI then sold these Fund units to the public. As of March 31, 2006, there were 10,996,700 Fund units issued and BPI had a 20% indirect interest in the Fund.

BPI has committed to maintain a minimum of 20% indirect interest in the Fund until there are 275 restaurants in the Royalty Pool.

Balance as at December 31, 2004 Acquisition of additional Partnership units by issuing Fund units Equity income Distributions from the Partnership	$ 62,798,866 14,237,327 9,665,871 (9,601,507)
Balance as at December 31, 2005 Acquisition of additional Partnership units by issuing Fund units Equity income Distributions from the Partnership	77,100,557 21,776,860 2,676,780 (1,965,321)
Balance as at March 31, 2006	$ 99,588,876

3. Investment in Boston Pizza Royalties Limited Partnership (continued):
Summarized financial information of the Partnership is as follows:

	March 31, 2006	December 31, 2005
Current assets Long-term assets, consisting of the BP Rights	$ 3,413,474 160,040,537	$ 6,741,761 138,145,095
Total assets	$ 163,454,011	$ 144,886,856
Current liabilities Long term liabilities Partners’ surplus	$ 1,142,033 5,000,000 157,311,978	$ 5,880,053 5,000,000 134,006,803
Total liabilities and surplus	$ 163,454,011	$ 144,886,856

4. Contingency:

Boston Pizza International Inc. (“BPI”) and the Fund are involved in trademark litigation with entities affiliated with McDonald’s Restaurant of Canada (the “McDonalds’ Group”), opposing the registration by the McDonald’s Group in Canada of the Boston Market trademark. Management of BPI believes that there is a likelihood that the trademark will not be registered. Additionally, BPI and the Fund have commenced an action against the McDonald’s Group to prevent them from infringing BPI’s and the Fund’s respective interests in the Boston Pizza trademarks by operating Boston Market in Canada. The McDonald’s Group has filed a counterclaim and a separate action challenging the validity of the registered trademark “Boston Pizza” and related trademarks under the Trade-Marks Act (Canada). Management does not believe that this action will succeed. However, in the event that the challenge to the Boston Pizza trademarks is successful, the Fund would lose the benefits of registration of its trademarks under the Trade-Marks Act (Canada), which may mean losing the ability to prevent others from using the registered trademarks for the goods and services for which they are registered and to prevent others from using similar or confusing trademarks or names. However, the loss of the registration under the Trade-Marks Act (Canada), would not prevent the Fund from continuing to license and use the “Boston Pizza” and related trademarks in the existing operations and geographic territories where they are presently used and from taking other measures to protect their rights in respect of, and their ability to use, the “Boston Pizza” and related trademarks, in new areas where BPI and its sub-licensees do not presently operate Boston Pizza restaurants.

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Boston Pizza Royalties Income Fund & Boston Pizza International Inc. Announce 2006 First Quarter Results

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