Pizza Pizza Royalty Income Fund (the”Fund”) is a limited purpose, open-ended trust established under the laws of Ontario to indirectly acquire certain trademarks and trade names used by Pizza Pizza Limited (“Pizza Pizza”) in its restaurants. The trademarks are licensed to Pizza Pizza for 99 years, for which Pizza Pizza pays the Fund a royalty equal to 6% of the system sales of its Pizza Pizza restaurants and 9% of the system sales of its Pizza 73 in Canada in the “Royalty Pool”.

On January 1, 2010, Pizza Pizza added 34 net new restaurants to the Royalty Pool, thereby increasing the number of restaurants in the pool to 671. Of the 671 restaurants 590 are Pizza Pizza and 81 are Pizza 73 restaurants.

A key attribute of the Fund is that it is based on top-line, system sales of the Royalty Pool restaurants and not on the profitability of either Pizza Pizza or the restaurants in the Royalty Pool. The success of the Fund depends primarily on the ability of Pizza Pizza to maintain and increase system sales of the Royalty Pool and to meet its royalty obligations.

Increases in system sales are derived from both the development of new Pizza Pizza and Pizza 73 restaurants and same store sales growth (“SSSG”). The key metric for yield growth of the Fund is SSSG. SSSG from existing restaurants is dependent on maintaining operational excellence within each Pizza Pizza and Pizza 73 restaurant, general market conditions, pricing and marketing programs undertaken by Pizza Pizza. One of Pizza Pizza’s competitive strengths in increasing SSSG is that 90% of the restaurant locations in the chain are new or have been renovated within the past five years. Increased seating is available in these renovated locations, offering restaurants the ability to increase their business during the lunch day-part, thereby potentially increasing same store sales.

Fund distributions are made monthly of unitholders of record at the close of business of that month-end, and are paid the 15th day of the following month.