TRADING SYMBOL: The Toronto Stock Exchange – AW.UN

A&W ANNOUNCES 2.3% DISTRIBUTION INCREASE FOLLOWING SOLID SALES GROWTH

VANCOUVER, July 26, 2016 A&W Revenue Royalties Income Fund (the Fund) today announced that it is increasing monthly cash distributions by 2.3%, from 13.0¢ per unit to 13.3¢ per unit beginning with the July 2016 distribution.  On an annualized basis this represents a distribution rate of $1.596 per unit.  The July distribution of 13.3¢ per unit will be payable to unitholders of record on August 15, 2016 and will be paid on August 31, 2016.

This distribution increase is primarily attributable to continued strong same store sales growth at A&W restaurants across Canada.  On July 26, 2016, the Fund reported same store sales growth of 2.7% for Q2 and 5.4% year to date, and a surplus of distributable cash of $2,540,000 for the most recent quarter ended June 19, 2016.  The Fund reviews distribution levels on a regular basis with the objective of maintaining the continuity of uniform monthly distributions.  

"We are very pleased with A&W's continued strong sales and financial performance", said Paul Hollands, Chairman and Chief Executive Officer of A&W Food Services of Canada Inc. (A&W Food Services).  "I am delighted that our strong results have allowed the Fund to increase distributions for the second time this year." 

About the Fund
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 are exchanged for additional shares of Trade Marks which are exchangeable for units of the Fund.  A&W Food Services owns 21.0% of the common shares of Trade Marks, and therefore owns the equivalent of 21.0% 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.

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Certain statements in this press release may contain forward-looking information within the meaning of applicable securities laws in Canada (forward-looking information). The words "anticipates", "believes", "budgets", "could", "estimates", "expects", "forecasts", "intends", "may", "might", "plans", "projects", "schedule", "should", "will", "would" and similar expressions are often intended to identify forward-looking information, although not all forward-looking information contains these identifying words.  The forward-looking information is based on assumptions that management considered reasonable at the time it was prepared.  The forward-looking information is subject to risks, uncertainties and other factors that could cause actual results to differ materially from the results anticipated by the forward-looking information.  The factors which could cause results to differ from current expectations are described in the Fund's most recent Management Discussion and Analysis under the heading "Risks and Uncertainties" and the Fund's Annual Information Form under the heading "Risk Factors", available on SEDAR at www.sedar.com. 

SOURCE A&W Food Services of Canada Inc.