Pizza Pizza

Pizza Pizza Royalty Corp. (“PPRC”), formerly Pizza Pizza Royalty Income Fund, is a corporation established under the laws of Ontario and owns 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 PPRC a royalty equal to 6% of the system sales of its Pizza Pizza restaurants and 9% of the system sales of its Pizza 73 restaurants in Canada in the “Royalty Pool”.

A key attribute of PPRC is that its revenue 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 PPRC 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 PPRC 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.

PPRC issues monthly dividends to shareholders of record at the close of business of that month-end and are paid the 15th day of the following month.