Press Release Details

For Immediate Release                                                                         The Toronto Stock Exchange: BPF.UN

BOSTON PIZZA ROYALTIES INCOME FUND AND BOSTON PIZZA INTERNATIONAL INC. ANNOUNCE THIRD QUARTER RESULTS AND OCTOBER DISTRIBUTION TO UNITHOLDERS

Record quarterly earnings before non-cash items per unit up 5.7% versus prior year and Trustees announce 100^th consecutive monthly cash distribution to unitholders

VANCOUVER, BC, (November 4, 2010) ‑ Boston Pizza Royalties Income Fund (the “Fund”) and Boston Pizza International Inc. (“BPI”) each reported today financial results for the period from July 1, 2010 to September 30, 2010 (the “Period”) and the period from January 1, 2010 to September 30, 2010 (the “Year-to-date”). A copy of management’s discussion and analysis and financial statements of the Fund and BPI for the Period and Year-to-date are available at www.sedar.com and www.bpincomefund.com. The Fund will host a conference call to discuss the results on November 4, 2010 at 8:30 a.m. Pacific Time (11:30 a.m. Eastern Time). The call can be accessed by dialling 1-800-319-4610 or 604-638-5340. A replay will be available until November 11, 2010 by dialling 1-800-319-6413 or 604-638-9010 and entering the pin code:  4452 followed by the # sign.

The Fund’s earnings before income taxes and dilution gains or losses (“Earnings before non-cash items”) per unit increased by 5.7% to a record $0.369 for the Period and by 4.6% to $1.066 for the Year-to-date compared to the same periods in 2009. Earnings before non-cash items on a per unit basis increased for the Period and Year-to-date compared to the same periods in 2009 as a result of the Fund’s acquisition and cancellation of units pursuant to normal course issuer bids. The Fund’s Earnings before non-cash items for the Period and Year-to-date were $5.4 million and $15.4 million, respectively, compared to the same periods in 2009 during which Earnings before non-cash items were $5.0 million and $14.8 million, respectively. Distributions declared for the Period and the Year-to-date were $5.0 million or $0.345 per unit and $13.4 million or $0.920 per unit, respectively, substantially unchanged from the same periods one year ago.  Distributions for the Period and Year-to-date were funded entirely by cash flow from operations. No debt was incurred at any point during the Period or Year-to-date to fund distributions.

Same store sales growth (“SSSG”) was positive 0.1% for the Period and negative 2.1% for the Year-to-date compared to negative 8.5% and negative 3.9% in the same periods one year ago. On a franchise sales basis, SSSG for the Period was positive 0.8% and negative 1.7% Year-to-date compared to negative 9.6% and negative 5.3% respectively in the same periods in 2009. The SSSG results for the Period and Year-to-date are similar to the figures reported overall for the Canadian retail industry during the same periods, respectively. Franchise sales of restaurants in the royalty pool were $171.2 million for the Period and $497.6 million for the Year-to-date, compared to $164.4 million and $487.8 million, respectively, in the same periods in 2009. SSSG results for the Period were negatively impacted by weaker sales in British Columbia as a result of the new Harmonized Sales Tax in that province which increased the amount of tax on restaurant meals from 5% to 12% effective July 1, 2010.

“In September, we successfully launched online ordering at over 330 Boston Pizza restaurants across Canada. This is an exciting new way for our guests to access more than 100 menu offerings and place orders to their local restaurant via the bostonpizza.com website. Our media campaign has included new TV, radio and online advertisements and the resulting increase in take out and delivery orders has helped drive positive same store sales growth for the third quarter” said George Melville, Co-Chairman and Owner of Boston Pizza International Inc.

The Trustees of the Fund announced a cash distribution to unitholders of 11.5 cents per unit for October 2010.  The distribution will be payable to unitholders of record at the close of business on November 21, 2010 and will be paid on November 30, 2010.  Including the distribution announced today, the Fund will have paid out 100 consecutive monthly cash distributions totalling $151.0 million or $10.32 per unit, including distributions paid by Boston Pizza Royalties Limited Partnership to BPI.  This is a significant milestone for the Fund as its total cash distributions to unitholders have now exceeded its original IPO unit price of $10.00 per unit.  At the time of the IPO, the monthly distributions were set at $0.0833 per unit and at the end of the Period, monthly distributions were $0.1150 per unit, an increase of 38%.  The Fund periodically reviews distribution levels based on its policy of stable and sustainable distribution flow to unitholders.

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 beginning in 2002 for which BPI pays the Fund 4% of franchise revenues of royalty pooled restaurants.

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

OUTLOOK

BPI’s management believes that the prevailing weak economic conditions will persist for the remainder of 2010 resulting in continued pressure on SSSG and franchise sales at Boston Pizza restaurants in Canada. However, Boston Pizza is well positioned to attract a wide variety of guests into the restaurant, sports bar and take-out/delivery parts of each location and offer a compelling value proposition to Canadians in these challenging economic times. BPI’s strategies to drive guest traffic and higher average cheque levels include a larger marketing budget versus the previous year, national and local store promotions, the launch of online ordering at over 330 Boston Pizza restaurants and menu re-pricing as part of the new menu launched each year in June. In addition, BPI’s management anticipates that 15 to 25 restaurants will complete renovations in 2010. Renovated restaurants typically experience an incremental sales increase in the year following the re-opening.

BPI’s management anticipates that five to eight new locations will open across Canada in 2010. Boston Pizza remains well positioned for future expansion and will continue to strengthen its position as the number one casual dining brand in Canada by pursuing further restaurant development opportunities across the country.

Under the Specified Investment Flow Through tax legislation, which was substantively enacted into law on June 12, 2007, the Fund will be subject to a tax at the prevailing corporate rate beginning on January 1, 2011. The applicable tax rate is 26.5% for 2011 and 25% for 2012 and later taxation years.  This tax will reduce net earnings of the Fund and will affect cash distributions to unitholders by approximately the same amount. Monthly cash distributions to unitholders will be reclassified for tax purposes as eligible dividends and Canadian residents who hold their units in a non-tax deferred account may claim the dividend tax credit for eligible dividends, thereby reducing the after-tax impact of this legislative change.

AMENDMENT TO ROLL-IN MECHANISM / SPECIAL MEETING OF UNITHOLDERS CALLED

The Trustees announced that they have approved an amendment to the mechanism under which new Boston Pizza restaurants are added the royalty pool of the Boston Pizza Royalties Limited Partnership (the “Partnership”) on January 1 of each year (the “Amendment”).  The Amendment is subject to unitholder approval and would become effective with respect to the roll-in of new Boston Pizza restaurants that occurs on January 1, 2012.

The Trustees also announced that a special meeting of unitholders of the Fund has been called and will be held on December 7, 2010 to consider and vote upon: (i) the Amendment; (ii) amendments to the Fund’s trust indenture that are required to assure the continued classification of units of the Fund as equity on the balance sheet of the Fund under International Financial Reporting Standards (“IFRS”), which take effect on January 1, 2011 (for a complete description of the impact of IFRS on the Fund, please see the Fund’s management’s discussion and analysis recently filed on SEDAR for the three month and nine month periods ended September 30, 2010); and (iii) an amendment to the Fund’s trust indenture to reduce quorum from two or more individuals present in person either holding personally or representing by proxy not less, in aggregate, than 25% of the votes attached to all outstanding units and special voting units to one or more individual present in person either holding personally or representing by proxy not less, in aggregate, than 15% of the votes attached to all outstanding units and special voting units.

Background to Amendment

In 2007, the Federal Government of Canada amended the Income Tax Act (Canada) to impose an entity level tax (the “SIFT Tax”) on Canadian publically listed income trusts.  The SIFT Tax becomes effective on the Fund on January 1, 2011.  As a result of the SIFT Tax, the Fund will pay tax approximately equal to the rate applicable to income earned by a Canadian public corporation.  The SIFT Tax will reduce the amount of cash available for distribution to the unitholders by the Fund.

On August 12, 2010, the Trustees of the Fund determined, having considered a number of alternatives to maximize unitholder value in the face of the imposition of the SIFT Tax on the Fund, that the Fund should retain its current structure following January 1, 2011.  Having made that determination, the Trustees of the Fund and BPI then commenced an analysis of the structure of the Fund, its subsidiary entities and material agreements, to determine whether any adjustments need to be made (including amendments to material agreements) as a result of the imposition of the SIFT Tax.

The Trustees of the Fund and BPI have determined that the SIFT Tax will have an impact on the economics associated with the roll-in mechanism by which newly opened Boston Pizza restaurants are added to the royalty pool pursuant to the terms of the Amended and Restated License and Royalty Agreement dated September 18, 2008 (the “Royalty Agreement”) between the Partnership and BPI.

Details of Amendment

To effect the change described herein, the limited partnership agreement governing the Partnership would be amended (the “Amending Agreement”).  Under the Amending Agreement, the basis for determining the additional entitlements to distributions from the Partnership and rights to acquire additional Units (the “Additional Entitlements”) that BPI receives for adding new Boston Pizza restaurants to the royalty pool of the Partnership would be amended to take into account the reduced benefit that additional royalty revenues to the Partnership will have on the Fund and unitholders as a result of the SIFT Tax.  The percentage reduction will be an estimate of the effective entity level tax rate (determined using the total income taxes paid by the Fund during the fiscal year divided by the total cash received by the Fund during that fiscal year) of the Fund for the upcoming year (i.e. for the roll-in of January 1, 2012, there will be an estimate of the effective entity level tax rate of the Fund for the year ended December 31, 2012).

The reduction in Additional Entitlements to BPI will re-adjust the economics of the roll-in mechanism, following the imposition of the SIFT Tax, to that currently in place between the parties.  The roll-in mechanism was designed to compensate BPI for the new royalties added to the Partnership by the new Boston Pizza restaurants, but still result in accretion to Unitholders and the Fund.  The Trustees of the Fund believe that the Amending Agreement will re-adjust the roll-in mechanism such that the addition of new Boston Pizza restaurants to the Royalty Pool in the future will continue to be accretive to the Fund and its unitholders.  The Amending Agreement is expected to become effective on January 2, 2011 and would govern the roll-in of new Boston Pizza restaurants to the Royalty Pool on January 1, 2012 and each January 1 thereafter.  BPI is under no contractual or other legal obligation to enter the Amending Agreement.  However, management of BPI has advised the Fund that it believes that an adjustment to the roll-in mechanism is in the best interests of all parties as a way of preserving investor confidence and interest in the Fund and the market price of the Units.

Particulars of these proposed changes will be set forth in the notice of meeting and information circular for that special meeting, which is expected to be mailed on or about November 8, 2010, and will also be available on www.sedar.com and www.bpincomefund.com.

FORWARD-LOOKING INFORMATION

Certain information in this press release may constitute “forward-looking information” that involves 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, Boston Pizza Holdings Limited Partnership, Boston Pizza Holdings GP Inc., Boston Pizza GP Inc., 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 information. When used in this press release, forward looking information may include words such as “anticipate”, “estimate”, “may”, “will”, “expect”, “believe”, “plan” and other similar terminology. This information reflects current expectations regarding future events and operating performance and speaks only as of the date of this press release.

Forward-looking information in this press release includes, but is not limited to, such things as:

·    the Fund retaining its current income trust structure beyond January 1, 2011;

·    the rate of SIFT Tax applicable in 2011, 2012 and beyond;

·    the characterization of the Fund’s distributions as eligible dividends commencing January 1, 2011, and the ability of qualifying unitholders to claim dividend tax credits in respect of such distributions;

·    the future expansion of Boston Pizza restaurants;

·    Boston Pizza will continue to strengthen its position as the number one casual dining brand in Canada;

·    estimates of the number of restaurant openings and estimates related to renovations (number of renovations, timeline of renovations and increased revenues following renovations); and

·    The holding of a special meeting of unitholders in on December 7, 2010.

The forward-looking information disclosed herein is based on a number of assumptions including, among other things:

·    the absence of changes in law;

·    the protection of the Boston Pizza trademarks and tradenames;

·    pace of commercial real estate development;

·    franchisees’ access to financing;

·    franchisees’ duly paying franchise fees and other amounts;

·    there will be no closures of Boston Pizza restaurants that materially affect the amount of royalty paid by BPI to the Fund;

·    speed of permitting;

·    future results being similar to historical results; and

·    expectations related to future general economic conditions.

This forward-looking information involves a number of risks, uncertainties and future expectations including, but not limited to:

·    competition;

·    changes in demographic trends;

·    changes in consumer preferences and discretionary spending patterns;

·    changes in national and local business and economic conditions;

·    legislation and government regulation;

·    cash distributions are not guaranteed;

·    accounting policies and practices;

·    the impact of new or increased or harmonization of sales taxes upon gross sales; and

·    the results of operations and financial conditions of BPI and the Fund.

The foregoing list of factors is not exhaustive and should be considered in conjunction with the risks and uncertainties set out in “Risks & Uncertainties” section of the Fund’s management’s discussion and analysis for the three month and nine month periods ended September 30, 2010. This press release discusses some of the factors that could cause actual results to differ materially from those expressed in or underlying such forward-looking information.

Forward-looking information is provided as of the date hereof and, except as required by law, we assume no obligation to update or revise forward-looking information to reflect new events or circumstances.

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

FOR FURTHER INFORMATION PLEASE CONTACT:

Boston Pizza Royalties Income Fund
Jordan Holm - Vice President of Investor Relations
Tel: 604-303-6083
investorrelations(at)bostonpizza.com
www.bpincomefund.com