A&W REVENUE ROYALTIES INCOME FUND ANNOUNCES SUBSTANTIAL ISSUER BID FOR ITS UNITS AND INTENTION TO INCREASE MONTHLY DISTRIBUTIONS

VANCOUVER, Nov. 10 /CNW/ -- 
Highlights


    --  Fund offers to buy 2,500,000 Units @ $20.00 per Unit
    --  Purchase funded by additional $50 million term loan
    --  Distributions to increase by 10% to 11.7 cents per Unit per
        month, effective January 2011



VANCOUVER, Nov. 10 /CNW/ - A&W Revenue Royalties Income Fund (the
 "Fund", TSX-AW.UN) today announced it intends to make a substantial
 issuer bid (the "Offer") to all its unitholders, including A&W Food
 Services of Canada Inc. ("Food Services"), who holds shares of the
 Fund's subsidiary, A&W Trade Marks Inc. ("Trade Marks") which are
 exchangeable for Units of the Fund ("Exchangeable Securities"). 


Under the Offer, the Fund will offer to purchase for cancellation
 2,500,000 of its Units, at a price of $20.00 per Unit.  In setting the
 purchase price to be paid for the Units under the Offer, the Trustees
 considered, among other things, the weighted average trading prices of
 the Units on the TSX for the twenty and thirty trading days ended
 November 9, 2010, of $20.27 and $19.91 respectively.


The Fund will finance the aggregate amount to be paid for the Units
 pursuant to the Offer by increasing the existing loan from HSBC Bank
 Canada to Trade Marks from $10 million to $60 million (the "New Loan").


As a result of the purchase of the Units under the Offer and the New
 Loan, distributable cash available for distributions to unitholders is
 expected to increase by approximately 10.2 cents (8%) per Unit per
 annum.  Therefore, subject to completion of the purchase of Units under
 the Offer and the New Loan, the Trustees of the Fund have approved an
 increase in monthly distributions to unitholders to 11.7 cents per Unit
 per month, from the current rate of 10.6 cents per Unit per month.  The
 new monthly distribution rate will be effective January 1, 2011 and
 will be payable as and from February 28, 2011. Trade Marks will pay
 dividends to Food Services on its Exchangeable Securities of Trade
 Marks at the same rate.


Food Services has agreed to deposit to the Offer Exchangeable Securities
 exchangeable for a total of 2,500,000 Units.  If more than 2,500,000
 Units are tendered to the Offer, the Fund will purchase the Units on a
 pro rata basis according to the number of Units deposited by
 unitholders, with fractions rounded down to the nearest whole Unit. The
 Offer is not conditional on any minimum number of Units being
 deposited. The number of Units to be purchased by the Fund from Food
 Services will depend on the number of Units deposited to the Offer by
 other unitholders.  In the event that all unitholders tender all their
 Units, the Fund will purchase 576,568 Units from Food Services and
 1,923,432 Units from other unitholders (in which event Food Services'
 interest in the Fund will increase from approximately 43% of the
 outstanding Units on a fully diluted basis to approximately 47%).  In
 the event that no unitholders other than Food Services deposit Units to
 the Offer, the Fund will purchase 2,500,000 Units from Food Services
 (in which event Food Services' interest in the Fund will decrease from
 approximately 43% of the outstanding Units on a fully diluted basis to
 approximately 31%).


"Since the Fund was created in 2002, the growth of the A&W business has
 generated strong distribution growth for unitholders" said John
 McLernon, Chairman of the Board of Trustees of the Fund.  "We are
 pleased that through the purchase of Units under this Offer, we are
 able to further increase cash distributions per Unit to unitholders."


The New Loan will mature five years after the payment by the Fund of the
 Units taken up pursuant to the Offer and bear interest at 5.03% per
 annum under an interest rate swap maturing on the same date.  Interest
 only will be payable monthly.


At the annual general and special meeting of unitholders held on May 4,
 2010, the unitholders approved a reorganization (the "Reorganization")
 of the Fund.  As a result of the Reorganization, the effective rate of
 tax to be paid effective January 2011 by Trade Marks on its net income
 is 18%, leaving 82% of its net income available for distribution to the
 Fund and Food Services as dividends on the shares of Trade Marks, and
 by the Fund to unitholders.  Details of the Reorganization were
 contained in the information circular of the Fund dated March 25, 2010,
 a copy of which is available on SEDAR at www.sedar.com.


To understand the impact of the Reorganization, the Offer and the New
 Loan, the following table shows the distributable cash of the Fund for
 the 4 quarters beginning with the fourth quarter of 2009 and ending
 with the third quarter of 2010. The first column shows the impact on
 distributable cash after giving effect to the Reorganization only, and
 the second column after giving effect to the Reorganization, the Offer
 and the New Loan, in each case effective at the beginning of the fourth
 quarter of 2009:






                                Q4 2009 to Q3 2010, inclusive

                              After Giving
                              Effect to the     After Giving
                             Reorganization,    Effect to the
(Dollars in                  but before the    Reorganization,
thousands except              Offer and New   the Offer and New
per Unit amounts)                 Loan              Loan

Fund and Trade Marks cash
flows from operating
activities                           $22,831            $22,831

Changes in non-cash working            (163)              (163)
capital

Interest on existing loan              (582)                  -

Interest on the New Loan                   -            (3,018)

Partnership distributions               (16)               (16)

Distributable cash before             22,070             19,634
income taxes

Income taxes (estimate)              (3,396)            (2,945)

Distributable cash after             $18,674            $16,689
income taxes

Weighted average outstanding
Units (fully diluted)             14,575,874         12,075,874

                                                                Change

Distributable cash per Unit           $1.281             $1.382 $0.101
(after-tax)

                                                                 (8%)





The distributable cash measure is provided as it identifies the amount
 of actual cash available to pay distributions to unitholders and
 dividends to Food Services. Distributable cash is not an earnings
 measure recognized by Canadian Generally Accepted Accounting Practices
 and therefore may not be comparable to similar measures presented by
 other issuers.


Distributable cash is calculated as the combined operating cash flows of
 the Fund and Trade Marks (which includes A&W Trade Marks Limited
 Partnership (the "Partnership")), the Partnership's 0.1% distributions
 to Food Services, and changes in non-cash working capital. Changes in
 non-cash working capital are excluded as Trade Marks and the Fund's
 working capital requirements are not permanent and are primarily due to
 the timing of payments between related parties. No deduction is made
 for capital expenditures as neither the Fund nor Trade Marks have
 capital expenditures. There are no restrictions on distributions
 arising from compliance with financial covenants. With respect to the
 guidance issued by Canadian Institute of Chartered Accountants on the
 measurement and disclosure of distributable cash in income trusts and
 other flow-through entities, the Fund believes that this method of
 calculating distributable cash is appropriate and provides appropriate
 disclosure to Unitholders.


As of November 10, 2010, there were 14,622,716 Units outstanding on a
 fully diluted basis including the Units issuable upon the exchange of
 the Exchangeable Securities held by Food Services and, accordingly, the
 Offer is for approximately 17.1% of the outstanding Units on a fully
 diluted basis. The Offer is subject to various conditions typical of
 transactions of this nature. It is anticipated that the offer to
 purchase and issuer bid circular and other related documents (the
 "Offer Documents"), containing the terms of the Offer and the
 instructions for tendering Units will be mailed to unitholders and
 filed with applicable securities regulators on or about November 12,
 2010. The Offer will remain open for acceptance until December 17, 2010
 unless withdrawn or extended by the Fund.


Neither the Fund nor its Trustees makes any recommendation to
 unitholders as to whether to tender or refrain from tendering their
 Units to the Offer. Unitholders are strongly encouraged to review the
 Offer Documents carefully and to consult with their financial and tax
 advisors prior to making any decision with respect to the Offer.


About A&W Revenue Royalties Income Fund


The Fund is a limited purpose trust established to invest in Trade
 Marks, which through its interest in 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 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. Food Services 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. The limited partnership interest of Food Services
 is increased each year to reflect the annual adjustment. Food Services'
 limited partnership interest may be exchanged for additional shares of
 Trade Marks which shares are exchangeable for Units.


Food Services currently owns securities of Trade Marks exchangeable for
 approximately 43% of Units of the Fund on a fully diluted basis.


Trade Marks' distributions to the Fund and to Food Services, 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.


Certain statements in this report may be forward-looking in nature.
 Actual results may differ materially from those expressed or implied in
 these forward-looking statements. The forward-looking statements are
 based on assumptions that management considered reasonable at the time
 they were prepared. These forward-looking statements are subject to a
 number of risk factors, including general economic and business
 conditions, unemployment, harmonization of sales taxes, financial and
 political instability, changes in income tax laws or their application
 to the Fund and other factors disclosed previously and from time to
 time in the Fund's public filings.  Forward-looking information is
 provided as of the date hereof and, except as required by law, we
 assume no obligation to update or revise forward-looking information to
 reflect new events or circumstances.


Additional information relating to the Fund is on SEDAR at www.sedar.com and on the Fund's website at www.awincomefund.ca.




pDon Leslie, Chief Financial Officer: [phone] or a href="mailto:[e-mail]" cr="true"[e-mail]/a/p

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