TRADING SYMBOL: The Toronto Stock Exchange - AW.UN

VANCOUVER, May 4 /CNW/ -

Highlights

-   Same store sales growth(1) 6.1%
    -   Royalty income increased to $5.2 million, up 17.5%
    -   Distributable cash(2) increased to $4.6 million, up 17.2%
    -   Trustees declare Special Distribution of $0.10 per unit, payable
        May 31st

A&W Revenue Royalties Income Fund (the Fund) reported today strong results for the first quarter ended March 28, 2010. The Fund will hold a conference call to discuss first quarter results on Tuesday, May 4, 2010 at 1:00 p.m. Pacific Time (4:00 p.m. Eastern Time). The call can be accessed by dialling toll-free 1-800-814-4859 or (416) 644-3414. A replay will be available until May 18, 2010, by dialling toll-free 1-877-289-8525 or (416) 640-1917 Passcode: 4292125 followed by the number sign.

The first quarter same store sales growth of 6.1% marks A&W's 28th consecutive quarter of same store sales growth. Growth in same store sales is the most important driver of growth in the Fund.

Total sales reported by restaurants in the Royalty Pool increased 17.5% to $171.7 million compared to $146.1 million in the same quarter of 2009. The sales increase was due to the same store sales growth and the increase in the number of restaurants in the Royalty Pool from 685 to 700. In addition, the number of days of sales reported in the quarter was higher than the first quarter of 2009. While same store sales growth is reported based on an equal number of days in each quarter, the fiscal first quarter of 2010 had 87 days of sales compared to 81 days in the first quarter of 2009. This longer time period also contributed to the reported growth in sales and royalty income.

"During the first quarter our advertising and promotions programs were particularly successful in building customer traffic and increasing sales. We are very pleased with the same store sales growth of 6.1% despite what continues to be a challenging food service market environment" said Paul Hollands, President and Chief Executive Officer of A&W Food Services of Canada Inc. (A&W Food Services). "In addition, we're pleased that the Fund is able to share this success with its unitholders in the form of a Special Distribution."

The Trustees of the Fund today declared the payment of a Special Distribution of 10 cents per trust unit, payable on May 31, 2010 to unitholders of record at the close of business on May 15, 2010. The Fund also today declared the regular monthly distribution of 10.6 cents per unit for the period April 1 to April 30, 2010. This distribution will also be paid on May 31, 2010 to unitholders of record as at May 15, 2010. For tax purposes, the Special Distribution will be non-eligible dividends, and 8.958cents per unit of the regular distribution will be other taxable income and 1.642cents will be non-eligible dividends.

A&W Food Services will also receive the regular monthly dividend of 10.6cents per share and a special dividend of 10 cents per share from A&W Trade Marks Inc. (Trade Marks) on its investment in Trade Marks.

FINANCIAL HIGHLIGHTS

-------------------------------------------------------------------------
    (dollars in thousands except per unit         Period from    Period from
    amounts)                                     January 1 to   January 1 to
                                                     March 28,      March 22,
                                                         2010           2009
    -------------------------------------------------------------------------
    Same store sales growth(1)                           6.1%           6.6%
    Number of restaurants in the Royalty Pool             700            685
    Sales reported by the restaurants in the
     Royalty Pool(1)                                 $171,658       $146,065
    Royalty income                                     $5,150         $4,382
    General and administrative expenses                  $361           $338
    Net third party interest expense                     $139           $123
    Recovery of current income taxes                        -           ($43)
    Partnership distributions to A&W Food Services         $5              -
    Total distributable cash generated for
     distributions and dividends(2)                    $4,645         $3,964
    Distributable cash (2) per equivalent unit
     (2010 - 14,705,897 units; 2009 - 14,289,993
     units)(3)                                         $0.316         $0.277
    Distributions and dividends declared per
     equivalent unit                                   $0.212         $0.212
    Trade Marks' net earnings                            $501           $134
    The Fund's net earnings                            $3,023         $2,370
    The Fund's basic and diluted earnings per
     unit (8,340,000 units)                            $0.362         $0.284
    -------------------------------------------------------------------------
    (1) Same store sales growth is not an earnings measure recognized by
        generally accepted accounting principles (GAAP) and therefore may not
        be comparable to similar measures presented by other issuers. This
        information is provided as it is a key driver of growth in the Fund.
    (2) Distributable cash is not an earnings measure recognized by generally
        accepted accounting principles ("GAAP") and therefore may not be
        comparable to similar measures presented by other issuers. This
        information is provided as it identifies the amount of actual cash
        available to pay distributions to unitholders and dividends to A&W
        Food Services. See "Distributable Cash".
    (3) For purposes of calculating distributable cash per equivalent unit,
        the number of equivalent units for 2010 includes 83,181 equivalent
        units representing the remaining 20% of the consideration for the
        January 5, 2010 adjustment to the Royalty Pool which is held back
        until December 2010 when the actual annual sales are reported by the
        new restaurants.

Financial Results

Royalty income for the quarter increased by $768,000 or 17.5% to $5,150,000 compared to the same quarter in 2009. This increase in royalty income was driven by the strong same store sales growth, the increase in the number of restaurants in the Royalty Pool to 700 in 2010 from 685 in 2009, and more days of sales in the quarter compared to 2009.

Cash expenses, interest and taxes increased by $87,000 partly due to costs associated with the proposed reorganization of the capital structure of Trade Marks announced earlier this year.

Distributable cash generated to pay distributions to unitholders and dividends to A&W Food Services increased by 17.2% to $4,645,000 compared to $3,964,000 for the first quarter of 2009. Distributable cash per fully diluted unit and equivalents increased to 31.6 cents from 27.7 cents.

Distributions of 21.2 cents per unit were declared in the quarter. The current monthly distribution rate of 10.6 cents per unit translates into an annualized distribution of $1.272 per unit. In addition, a Special Distribution of 10 cents per unit has been announced and will be paid on May 31, 2010 to unitholders of record as at May 15, 2010.

A copy of the Fund's management discussion and analysis and the financial statements of the Fund, Trade Marks and A&W Food Services for the first quarter will be available on www.sedar.com and www.awincomefund.ca on or before May 7, 2010.

Overview

The Fund is a limited purpose trust established to invest in Trade Marks, which through its interest in A&W Trade Marks Limited Partnership (the Partnership), owns the A&W trade-marks used in the A&W quick service restaurant business in Canada. The A&W trade-marks comprise some of the best-known brand names in the Canadian foodservice industry. In return for licensing A&W Food Services to use its trade-marks, Trade Marks (through the Partnership) receives royalties equal to 3% of the sales of A&W restaurants in the Royalty Pool. A&W is the second largest quick-service hamburger restaurant chain in Canada. Operating coast-to-coast, A&W restaurants feature famous trade-marked menu items such as The Burger Family, Chubby Chicken and A&W Root Beer.

The Royalty Pool is adjusted annually to reflect sales from new A&W restaurants, net of the sales of any A&W restaurants that have permanently closed. Additional limited partnership units (LP units) are issued to A&W Food Services to reflect the annual adjustment. A&W Food Services' additional LP units will be exchanged for additional shares of Trade Marks which are exchangeable for units of the Fund.

A&W Food Services currently owns 43% of the common shares of Trade Marks, and therefore currently owns the equivalent of 43% of the units of the Fund on a fully-diluted basis.

Trade Marks' dividends to A&W Food Services and the Fund, and the Fund's distributions to unitholders are based on top-line revenues of the A&W restaurants in the Royalty Pool, less interest, general and administrative expenses and current income taxes of Trade Marks, and are thereby isolated from many of the factors that impact an operating business.

On May 4, 2010, A&W Food Services declared a dividend on its common shares of $5,000,000 payable to its shareholder on May 6, 2010.

Certain statements in this report may be forward-looking in nature. These include references to liquidity, subordinated dividends, earnings and anticipated earnings from growth in same store sales and new restaurant openings, A&W Food Services' strategy to "make A&W the number one national burger choice for baby boomers and the fastest growing and most successful burger businesses in Canada:, A&W Food Services' plans to respond tactically to market conditions; A&W Food Services' plans to build the A&W brand through advertising and marketing campaigns, menu innovation, facilities design and expanding to serve customers in new markets; and A&W Food Services' plans to modernize and enhance the appeal of its restaurants. Actual results may differ materially from those expressed or implied in these forward-looking statements. The forward-looking statements are based on assumptions that management considered reasonable at the time they were prepared. These forward-looking statements are subject to a number of risk factors, including the ability of A&W Food Services to implement its marketing strategies and opening new A&W restaurants, general economic and business conditions, unemployment, harmonization of sales taxes, financial and political instability, and other factors disclosed previously and from time to time in the Fund's public filings.

Additional information relating to the Fund is on SEDAR at www.sedar.com and on the Fund's website at www.awincomefund.ca.