Pizza Pizza Royalty Income Fund Announces May Distribution and 2008 Return of Capital Estimate

About this update from Pizza Pizza Royalty Corp.

[{"type":"text","content":"\n\n\n\nTORONTO, May 21 /CNW/ - Pizza Pizza Royalty Income Fund (the "Fund")\n(TSX: PZA.UN) today announced a cash distribution of $0.076 per unit for the\nmonth of May, 2008. The distribution will be payable to unitholders of record\nat the close of business on May 31, 2008, and will be paid on June 13, 2008.\n\n\nFor those unitholders holding units outside a tax deferred plan, the Fund\nestimates that the 2008 distributions will be treated as 95% taxable income\nand 5% as a return of capital. The proportion of these figures may change when\nthe actual results for the fiscal year are calculated. Discretionary\ndeductions available to the Fund that are not fully utilized this year will\nremain available to the Fund in subsequent taxation years as part of its\noverall tax planning strategy.\n\n\nAbout the Fund\n\n\nThe Fund is a limited purpose, open-ended trust established under the\nlaws of Ontario. The Fund, indirectly through the Pizza Pizza Royalty Limited\nPartnership (the "Partnership"), has acquired the trademarks and trade names\nused by Pizza Pizza Limited ("the Company") in its Pizza Pizza and Pizza 73\nrestaurants. The Pizza Pizza trademarks were licensed to the Company in 2005\nfor 99 years, for which the Company pays the Fund a royalty equal to 6% of the\nsystem sales of its Pizza Pizza restaurants in the Royalty Pool. There are\n559 Pizza Pizza restaurants in the Royalty Pool for 2008. On July 24, 2007,\nthe Partnership acquired the trademarks and other intellectual property of\nPizza 73 (the "Pizza 73 Rights") and licensed them to the Company for\n99 years, for which the Company pays the Fund a royalty equal to 9% of the\nsystem sales of the 50 Pizza 73 restaurants in the Royalty Pool for 2008. The\n2008 Royalty Pool has 609 total restaurants.\n\n\nA key attribute of the Fund is that revenues are based on top-line,\nsystem sales of the Royalty Pool restaurants and not on the profitability of\neither the Company or the restaurants in the Royalty Pool. Moreover, the Fund\nis not subject to the variability of earnings or expenses of the operating\ncompanies. The Fund's only expenses are administration expenses and the\ninterest on debt. Thus, the success of the Fund depends primarily on the\nability of Pizza Pizza to maintain and increase system sales of the Royalty\nPool resta...

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