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Boston Pizza (TSX:BPF.UN) removes six restaurants from royalty pool

Consumer, Market News
TSX:BPF.UN
03 January 2023 14:00 (EDT)

Source: Open Table

Boston Pizza Royalties Income Fund (BPF.UN) and Boston Pizza International announced the fund’s royalty pool removed six of its permanently closed restaurants.

With the adjustment for these closures, the royalty pool now includes 377 Boston Pizza restaurants.

The fund receives 5.50 per cent of revenues from Boston Pizza restaurants in the royalty pool.

The franchise sales received from the six Boston Pizza restaurants that were permanently closed in 2022 during the first year following their addition to the royalty pool was $6.8 million.

Considering there were no new restaurants opened in 2022, the net royalty and distribution income on the adjustment date was negative $400,000.

Since there was a deficiency in the 2021 and 2022 adjustment dates, there is currently a cumulative deficiency of $1.6 million.

As a result, Boston Pizza International did not receive any additional entitlements on January 1st, 2023. However, it did not lose any of the additional entitlements it received in previous years.

Instead, Boston Pizza International will be required to make up the $1.6 million deficiency in future years by first adding net royalty and distribution income equal to the cumulative deficiency before receiving any more entitlements. It holds a 13.20 per cent interest in the aforementioned fund.

Boston Pizza Royalties Income Fund (BPF.UN) is up 0.40 per cent, trading at $15.14 per share as of 1:41 p.m. EST.


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