/NOT FOR DISTRIBUTION IN THE UNITED STATES OR THROUGH U.S. NEWSWIRE
MONCTON, NB, Oct. 15 /CNW/ - PDM Royalties Income Fund (the "Fund") (TSX: PDM.UN) announced today amendments to its licence and royalty agreements with Pizza Delight Corporation Ltd. ("PDC") and Mikes Restaurants Inc. ("Mikes") that remove the requirement that a restaurant be open for at least 90 consecutive days (the "Operating Period") before it may be included in the royalty pool for the subsequent year on January 1st of each year when the royalty pool is adjusted. Prior to this change, restaurants opened after October 3rd in a given year would not be included in the royalty pool until January 1st of the second following year.
The elimination of the requirement that restaurants be open for the Operating Period to be eligible for inclusion in the royalty pool was recommended to the Fund by the directors of PDM Restaurants GP Inc. ("PDM GP"), the managing partner of PDM Royalties Limited Partnership, administrator of the Fund. Three of the five directors of PDM GP are independent of PDC and Mikes. The change will affect the determination of the royalty pool as at January 1, 2008 and in subsequent years. The adjustment to the royalty pool to occur on January 1, 2008 will therefore include all new restaurants opened between October 4, 2006 and December 31, 2007. During the period of October 4, 2006 to date, 14 new restaurants have been opened, comprised of one Pizza Delight(R) restaurants, 1 Mikes(R) restaurants, 8 Scores(R) restaurants and 4 Baton Rouge(R) restaurants. It is anticipated that 4 additional restaurants will be opened by December 31, 2007. On January 1st in each year after January 1, 2008, restaurants opened between January 1st and December 31st of the prior year will be included in the royalty pool.
Consequential amendments were made to the amended and restated limited partnership agreement among PDC, Mikes, PDM GP and PDM Holdings Trust to give effect to this change.
About the Fund
The Fund is a limited purpose open-ended trust established under the laws of Ontario. The Fund makes monthly distributions of its available cash to holders of units. The Fund indirectly owns the trade marks and intellectual property for the Pizza Delight(R) and Mikes(R) brands and has licensed them to PDC and Mikes, respectively, in consideration for a royalty equal to 4% of system sales generated by Pizza Delight(R) and Mikes(R) restaurants. The Fund also indirectly owns the trade marks and intellectual property for the Scores(R) Rotisserie and Ribs and Baton Rouge(R) brands and has licensed each to Mikes in consideration for a royalty equal to 6% of system sales generated by Scores(R) Rotisserie and Ribs and Baton Rouge(R) restaurants.
PDC is a privately owned corporation, headquartered in Moncton, New Brunswick. It operates franchised and corporate restaurants under the brand names Pizza Delight(R), Mikes(R), Scores(R) Rotisserie and Ribs and Baton Rouge(R). Pizza Delight(R) restaurants operate primarily in Atlantic Canada, where PDC dominates the family/mid-scale segment. Mikes(R) restaurants operate primarily in Quebec in the casual dining segment and the take-out and delivery segments. Scores(R) Rotisserie and Ribs restaurants operate primarily in Quebec in the family dining segment and the take-out and delivery segments. Baton Rouge(R) restaurants operate in the casual dining segment in Ontario and Quebec.
For additional information on our four brands visit:
www.pizzadelight.com, www.mikes.ca, www.scores.ca or