Boston Pizza Royalties Income Fund and Boston Pizza International Inc. (BPI) announced that effective January 1, 2023, the Fund's royalty pool has been adjusted to remove six Boston Pizza restaurants that were permanently closed between January 1, 2022, and December 31, 2022. No new Boston Pizza restaurants were opened during the Period. With the adjustment for these closures during 2022, the Royalty Pool now includes 377 Boston Pizza restaurants.

The Fund effectively receives 5.5% of franchise revenues of Boston Pizza restaurants in the Royalty Pool less the pro rata portion payable to BPI in respect of its retained interest in the Fund. 2 On January 1 of each year, an adjustment is made to add to the Royalty Pool new Boston Pizza restaurants that opened and to remove any Boston Pizza restaurants that permanently closed since the last Adjustment Date. In return for adding new Royalty and Distribution Income from the New Restaurants after subtracting the Royalty and Distribution Income that is lost from the Closed Restaurants 3, BPI receives the right to indirectly acquire additional units of the Fund.

The calculation of Additional Entitlements is designed to be accretive to unitholders of the Fund as the expected increase in Franchise Sales from the New Restaurants added to the Royalty Pool less the decrease in Franchise Sales from the Closed Restaurants is valued at a 7.5% discount. The Additional Entitlements are calculated at 92.5% of the estimated Royalty and Distribution Income expected to be generated by the New Restaurants less the actual Royalty and Distribution Income lost from the Closed Restaurants, multiplied by one minus the effective tax rate estimated to be paid by the Fund, divided by the yield of the Fund, divided by the weighted average unit price over a specified period. BPI indirectly receives 80% of the Additional Entitlements initially, with the balance received when the actual full year performance of the New Restaurants and the actual effective tax rate paid by the Fund are known with certainty.

BPI receives 100% of the distributions on the Additional Entitlements throughout the year. After the New Restaurants have been part of the Royalty Pool for a full year, an audit of the Franchise Sales of these restaurants is performed, and the actual effective tax rate paid by the Fund is determined. At such time, an adjustment is made to reconcile distributions paid to BPI and the Additional Entitlements received by BPI.