Business
Pizza Pizza Royalty Income Fund Announces Change to the Seasoning Period for New Restaurants Added to the Royalty Pool
Pizza Pizza Royalty Income Fund Announces Change to the Seasoning Period for New Restaurants Added to the Royalty Pool.
About this update from Pizza Pizza Royalty Corp.
[{"type":"text","content":"\n\n\n\n\nTORONTO, Aug. 25 /CNW/ - Pizza Pizza Royalty Income Fund (the \"Fund\")\n(TSX:PZA.UN) today announced that its Board of Trustees unanimously approved\namendments to its License and Royalty Agreement with Pizza Pizza Limited\n(\"Pizza Pizza\") and related provisions of the Partnership Agreement of Pizza\nPizza Royalty Limited Partnership (the \"Partnership\") that will result in a\nremoval of the requirement that a restaurant be open for at least 120\nconsecutive days before it may be included in the Royalty Pool for the\nsubsequent year. The removal of the 120-day seasoning period involves only a\nchange in the timing of the inclusion of restaurants in the Royalty pool and\nnot the substance of the relationship between Pizza Pizza and the Fund.\nPreviously, restaurants opened after September 1st of a given year would not\nbe included in the Royalty Pool until January 1 of the second following year.\nPizza Pizza requested elimination of the 120-day seasoning period in\norder that the restaurant opening period would coincide with the fiscal year\nof the Fund. This change will benefit management's reporting of restaurant\nopenings and closures in relation to the number of restaurants in the Royalty\nPool. Existing safeguards, including the holdback arrangement described below\nin greater detail, will continue to ensure that additional entitlements\nawarded to Pizza Pizza upon adding new restaurants to the Royalty Pool are\nreconciled based on actual system sales one year after being added to the\nRoyal Pool.\nThis change will affect the determination of the Royalty Pool as at\nJanuary 1, 2007 and subsequent years and the corresponding entitlements of\nPizza Pizza to indirectly acquire additional Fund units. For January 1, 2007,\nnew restaurants opened between September 1, 2005 and December 31, 2006 will be\nadded to the Royalty Pool. For each January 1 thereafter, restaurants opened\nbetween January 1 and December 31 of the prior year will be included in the\ncalculation. As is currently the case, Pizza Pizza will receive the right to\nindirectly acquire Fund units in return for adding this additional royalty\nrevenue. The calculation for the number of additional unit entitlements\nreceived by Pizza Pizza is designed to be accretive to existing Fund\nUnitholders as the additional royalty revenues from the new restaurants ...