Thank you and welcome to the call. We will be discussing the 2018 first quarter results for both Boston Pizza Royalties Income Fund or the Fund and for Boston Pizza International or BPI.

For complete details on our financial results, please see our 2018 first quarter materials filed earlier today on SEDAR or visit the Fund's website at bpincomefund.com. Should you require additional information after the call, you can reach us via the Investor Relations phone number listed in our press release.

The Fund is a limited purpose open-ended trust established under the laws of British Columbia to acquire indirectly certain trademarks and trade names used by BPI and its Boston Pizza restaurants in Canada whereby BPI pays an amount to the Fund based on franchise revenues of royalty pool restaurants. For a complete description of the Fund, please see the annual information form dated February 7, 2018, which was filed on SEDAR.

Before I turn the call over to Jordan Holm, President of BPI and the Fund, I have to remind everyone about the risks inherent in forward-looking information. Certain information in the following discussion may constitute forward-looking information that involves known and unknown risks, uncertainties, future expectations and other factors which may cause the actual results, performance or achievements of the Fund, Boston Pizza Holdings Trust, Boston Pizza Royalties Limited Partnership, Boston Pizza Holdings Limited Partnership, Boston Pizza Holdings GP Inc., Boston pizza GP Inc., BPI, Boston Pizza Canada Limited Partnership, Boston Pizza Canada Holdings Inc., Boston Pizza Canada Holdings Partnership, Boston Pizza Restaurants or industry results to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information.

For a more complete definition of forward-looking information and associated risks, please refer to the Fund's management discussion and analysis issued earlier today. Forward-looking information is provided as of the date of this call and except as required by law, we assume no obligation to update or revise forward-looking information to reflect new events or circumstances.

With that, I will turn the call over to Jordan.

Thank you Wes and welcome everyone to Boston Pizza's first quarter investor conference call. Today I will discuss our results for the three-month period ended March 31, 2018 and Wes will review the key financial items.

Later, I will discuss Boston Pizza's plans for the second quarter of this year and will leave time for your questions at the end. As you can see from the press release and financial statements filed this morning, Boston Pizza posted system-wide gross sales of $265.5 million for the period representing an increase of 1.7% versus the same period in 2017.

In addition, the Fund posted franchise sales from restaurants in the royalty pool of $204 million for the period representing an increase of 0.8% versus the same period one year ago. The key drivers of our sales results for the period were the additional sales from the eight net new Boston Pizza restaurants opened during 2017 and added to the Fund's royalty pool on January 1, 2018.

Same store sales growth or SSG for the period was positive 0.2%. The SSG for the period was attributable to menu repricing offset by weak general economic conditions in regions directly connected to the Canadian oil and gas industry and the adverse of the Saskatchewan 6% provincial sales tax on restaurant purchased food.

BPI completed 10 restaurant renovations during the first period of 2018 compared to four in the first quarter one year ago. Restaurants typically closed for two to three weeks to complete the renovation and experienced and incremental sales increase in the year following the reopening.

At the start of the first quarter of 2018, we featured our BP Bundles promotion, where guests could order combined menu items for a great value. The successful Bundles promotion accounted for over 10% of online sales during that period, of which more than 40% were new users to our online platforms suggesting the value offering did attract new guests.

the promotion was supported by television and digital and social media campaigns. Our annual Valentine's Day campaign ended on February 14, 2018.

Boston Pizza locations sold paper hearts for a $2 donation to Boston Pizza Foundation Future Prospects. New to the campaign this year was the triple chocolate mousse cake with $1 from the sale of each cake, $1 from each heart shaped pizza sold and all the proceeds form the paper hearts sales were donated to Boston Pizza Foundation Future Prospects and the charities that it supports.

This popular and successful annual promotion raised over $400,000 this year. Turning to restaurant development.

We did not open any new Boston Pizza locations during the first quarter of 2018, which is quite normal for that time of the year given the winter conditions that are not suitable for constructions. But we do have five locations under construction which we are excited about and I will talk more about that later on.

We do have some wonderful initiatives planned to drive sales for the second quarter of 2018 and throughout the rest of the remainder of the year, which I will talk more about in a moment. But for now, I would like to turn the call over to Wes for a review of the Fund's financial performance.

Thanks Jordan. The Fund posted a royalty income of $8.2 million for the period compared to $8.1 million for the same period one year ago, representing an increase of 0.8% for the period.

The Fund posted distribution income of $2.7 million for the period compared to $2.6 million for the same period one year ago. Royalty and distribution income in respect of the period was based on the royalty pool of 391 Boston Pizza restaurants reporting franchise sales of $204 million for the period.

The Fund posted net and comprehensive income of $2.4 million for the period compared to $6.6 million for same period one year ago. The $4.2 million decrease in the Fund's net and comprehensive income for the period compared to the first quarter of 2017 was primarily attributable to $5.5 million change in fair value adjustments and lower interest income of $0.5 million, partially offset by lower income taxes of $1.1 million and lower interest and financing expenses of $0.5 million.

While net and comprehensive income is the measurement of the Fund earnings under International Financial Reporting Standards or IFRS, the Fund is of the view that net income does not provide the most meaningful measurement of the Fund's ability to pay distributions as the calculation of net income contains non-cash items that do not affect the Fund's cash flow. Non-cash items include the fair value adjustments on the investment in Boston Pizza Canada Limited Partnership, the Class B Unit liability, interest rate swaps and deferred income taxes.

Consequently, the Fund reports the non-IFRS metrics of distributable cash and payout ratio to provide, in the Fund's opinion, investors with more meaningful information regarding The Fund's ability to pay distributions to unitholders. The Fund's distributable cash was $6.7 million for the period compared to $6.3 million in the same period in 2017.

The increase in distributable cash of $0.3 million or 5.5% was primarily due to a decrease in BPI's Class B Unit entitlement of $0.4 million and higher royalty and distribution income of $0.2 million, partially offset by higher SIFT tax of $0.2 million. The Class C Exchange was cash neutral to the Fund as lower interest expense on Class C GP Units to BPI was offset by lower interest received on the BP Loan.

The Fund's distributable cash per unit of $0.305 for the period compared to $0.312 for the same period in 2017. The decrease in distributable cash per unit of $0.007 or 2.2% was primarily attributable to the BC government increasing the general corporate income tax rate by 1% effective January 1, 2018, which increased the Fund's SIFT tax rate by 1% to 27% for the period.

The Fund's payout ratio for the period was 113.1% compared to 110.6% in the same period in 2017. The increase in the Fund's payout ratio compared to the same period in 2017 was due to the combined effects of distributions paid increasing by $0.6 million or 7.9% and distributable cash increasing by $0.4 million or 5.5%.

The Fund strives to provide unitholders with consistent monthly distributions and as result, the Fund will generally experience seasonal fluctuations in its payout ratio. The Fund's payout ratio is likely to be higher in the first and fourth quarters each year compared to the second and third quarters each year since Boston Pizza Restaurants generally experience higher franchise sales during the summer months when restaurants open their patios and benefit from increased tourist traffic.

Higher franchise sales generally result in increases in distributable cash Given the top-line structure of the Fund and no clear mandate to retain capital for other purposes, it is important to note that a payout ratio close to 100% is to be expected over time. On a trailing 12-month basis, the Fund's payout ratio was 100.7% as at March 31, 2018.

For additional context, the Fund's annual payout ratio for the prior three years ended December 31, were 100% in 2017, 98.9% in 2016 and 94% in 2015. The Fund also ended the quarter with $2.4 million in cash.

On May 14, 2018, the trustees declared a monthly cash distribution to unitholders of $0.115 cents per unit for April 2018. This distribution will be payable on May 31 to unitholders of record on May 21.

This represents the 190th consecutive monthly distribution since the Fund's initial public offering and with this distribution, the Fund will have paid out total cash distributions of $287 million or $19.72 per unit since the IPO in July 2002. With that, I will turn the call back to Jordan for the outlook.

Thank you Wes. We have some great promotions and new menu items in store for our guests throughout the remainder of 2018.

We started the second quarter with all new Thin Crust Creations promotion which introduced five new recipes including the Skinny Carnivore, Fiesta Chicken, Potato Bianco, Cherry Bomb Margherita and Pizza Bella. The Thin Crust Creations pizza campaign is currently running in restaurants and is supported with television advertising and digital and social media campaigns.

With hockey and basketball playoffs in full swing, we are promoting Boston Pizza as Canada's favorite sports bar HeadQuarters and the place to experience big games. To that end, we have ongoing campaigns focused on NHL Hockey and NBA Basketball.

For the NHL Hockey promotion, guests have the opportunities to play our NHL fantasy draft when they order a Molson product and they can win daily prizes. Our sports promotions are supported with television and digital and social media campaigns.

We will also continue to promote our Team HeadQuarters program which supports local sports teams in our community as it allows them to collect 10% of every receipt spent at Boston Pizza across the country and use it towards their team events at Boston Pizza restaurants. We have had continued success with the program so far with almost 5,000 teams signed up and over 100,000 receipts submitted through the Team HeadQuarters digital platform.

We have 390 locations open today and five more locations currently under construction. So we are optimistic about the continued expansion opportunities with Boston Pizza.

We are please with this result as this continued expansion further solidifies our position as Canada's number one casual dining brand by serving more than 50 million guests annually in more locations than any other full service restaurant brand in Canada. In addition to the 10 restaurant renovations that I mentioned completed during the first quarter of 2018, we have completed a subsequent four renovations since the end of the first quarter, bringing our year-to-date total to 14 renovations so far in 2018 with many more scheduled for completion during the rest of the year.

These renovations help keep Boston Pizza restaurants looking fresh and modern and bring new technology and equipment up to latest standards. In addition, our experience shows that the franchisee's investment in a store renovation is rewarded with an incremental sales increase when those locations reopens and guest are attracted to the great new look.

Although we continue to see weak economic conditions in regions directly connected to the oil and gas industry, we have many exciting initiatives underway that we believe will drive results going forward. With this continued momentum, we remain Canada's number one casual dining brand.

With that, I would like to begin the question-and-answer period. Operator?

Good morning.

Hi Lisa.

Good morning Elizabeth.

So I will start with same-store sales growth, in particular with respect to growth you have seen or not seen in Saskatchewan. As a result of the increase in taxes on restaurants, was perhaps one of the main factors that was a drag on growth.

Now that we have anniversaried, so to speak, the implementation of that tax, any early comments you can provide with respect to traffic levels in April and May?

I won't speak specifically to April and May because that's a period in progress right now. The positive thing about the second quarter of 2018 is that we will roll on two material events in the province of Saskatchewan that did affect guest traffic and sales.

And those were, of course, the implementation of the PST that happened during the second quarter of 2017 and also the implementation of the strictest provincial drinking and diving legislation, I believe, in all of Canada, which is the 0.04% level of the drinking and driving legislation. So both of those things happened during the second quarter of last year that did have an impact on sales and guest traffic and now that we are a year over and we will be rolling on those numbers, we should expect to see some recovery in comparative sales year-over-year but they definitely posed a headwind for sales in the province of Saskatchewan.

Okay. Great.

And just turning over to Alberta, generally what we have been hearing is that it's been slow improvements in terms of sales growth in that province. And I wondered if you can comment specifically on your restaurants, whether you are as well slow but some improvement at least?

And if there is any kind of disparity between different regions within Alberta that you are seeing this change?

Yes. So I very much concur with the description that you have provided that I think generally people are feeling that it has been a very slow but a response to momentum in recovery in that province.

And that's what we have seen in our numbers and we hope that that continues now that oil is above $70 and that should bring not just recovery in employment, but also that consumer confidence that things are going to remain positive going forward and that allows people to spend a bit more and feel a bit more confident in doing so. So definitely slow and steady recovery in Alberta.

In terms of regional differences, I have spend a bunch of time in Alberta about a month ago and I think it's a similar story in all places. I think probably we are seeing a little bit more strength in the Northern Alberta, so around the Edmonton area, we have about 60 locations in that region.

I think it's starting to pick up there and I think Calgary and Southern Alberta is following but so not far off. And again, the overall picture is very consistent with increase in oil price, a return of activity there, unemployment that follows that and then that critical consumer confidence about the future that allows people to feel more confident in opening their wallets and coming into our restaurants.

And then in terms of organic growth across Canada, is there any particular region that you would call as being particularly strong? So indexing higher than your average?

Or one that's, in terms of weakness, would you still say that Alberta is the weakest province, comping most weak?

As I called out Saskatchewan as being the weakest region for us right now and that, as I mentioned, is for economic reasons, but there is also some legislation, government items there that have posed a challenge The strongest regions for us continue to be BC and Ontario. Québec and Atlantic would be good as well.

So really it has been for the last about three-and-a-half years, sort of a tale of two economies in Canada. You have the oil and gas regions, for us that's Alberta, Saskatchewan, some Northern BC and then Newfoundland.

They are all impacted by changes in oil and gas. And then you have the other regions that have benefited from a weaker dollar, exporter economies, tourism and we definitely see that throughout the rest of Canada.

So that continues to be the case but definitely for this period, we saw strength in both Ontario and British Columbia.

Okay. Great.

And just since you mentioned British Columbia, turning over to that region. There is increasing minimum wage coming this year, very soon actually.

Are there anything that you can speak through with respect to learnings from the increased wages that just happened in Ontario and even prior once in Alberta that you think helped position you to help manage these increased labor cost in BC?

Yes, definitely. I mean we learned a lot from the process in Alberta about what the actual impacts are of minimum wage increases.

And so we use that in Ontario when that change happened on January 1 of this year. It was much more sudden in Ontario than the gradual process that either Alberta or BC will go through.

But we can see how that affects all labor cost and also other input cost of suppliers looking at their rising cost as a result of labor rate changes. We work on our reaction to that in a variety of ways.

I know people talk about menu pricing adjustments and certainly that's one of the factors. We do annually reprice our menu in June.

And we look at factors like rising labor and the rising input costs to make regional pricing adjustments in about 18 different menu groups across the country and looking what's going on in their marketplaces competitively as well as input costs. But it's not just menu price increases.

We do look for efficiencies. We look a lot at retention at hiring strategies and holding on to people longer because we know in the restaurant industry, there is significant turnover and when you invest in an employee in bringing them up to speed, either it's heart of house cook or someone in front of house server or bartender or host.

Holding on to those people longer is a great way to save on labor as well and you get more productive employees holding up. So there are a number of strategies that we use to prepare our restaurants for rising labor costs.

There is no way to get around it. It is the largest cost in service businesses in general is labor and we do see provincial labor rates rising have dealt with Alberta, are dealing with Ontario right now and are prepared for BC when it happens later this year.

And in terms of Ontario, how has traffic generally been in that province? And thinking, in particular, given the rising labor cost, increase cost not just to restaurants but elsewhere and the impact of higher menu prices, which we know went through in Ontario as well as other regions for you, but just wondering if there is any noticeable pullback in traffic or spending that you might be able to attribute to some of these increased menu prices in Ontario?

Yes. I mean I won't speak specifically to our results but I think generally there is a proven economic reaction of price elasticity.

When prices rise, people adjust their spending accordingly and we would have seen across the board in restaurants and retail some pricing adjustments as a result of minimum wage increases. And I think that consumer so react to that and I point to the experience that we saw in Saskatchewan.

When they tacked on a 6% Provincial Sales Tax on restaurant meals, we saw guest traffic react similarly, negatively. Same thing in BC when the HST was implemented here, which brought in a restaurant tax.

We do see that in Ontario. When people pass along menu price increases, there isn't a change necessarily in the public's disposable income.

And so they are dealing with the same amount of dollars and therefore they have to adjust either what they spend when do come out or the frequency that they visit restaurants like Boston Pizza. So yes, we have seen a slight slowdown in guest traffic in Ontario perhaps as a result rising menu prices.

But that was to be expected when prices rise when they had to.

Like do you have any other multiple push and pulls, would you say it's potentially unclear for the balance of the year or the second half of 2018? Do you think that this traffic patterns could change?

Or what is your expectation, if any?

Yes. I do think people resume their normal consumption patterns.

It is difficult to highlight just simply that the traffic would be down in Ontario simply because of menu pricing. Like I said, there is a reaction to that, but there are number of other items.

April, for example, was a tough month for weather. It seemed like we had an extended winter in various parts of Canada, but particularly Ontario with cold weather.

And so our patios weren't open until May. So that may account for a little bit of the slower traffic as people come out of their winter cocoons, but we will see going forward.

The guest traffic is something we watch very carefully and that's why we put menu price through changes very delicately and very carefully because we know that it does have an impact on people's ability to come in and order from BP.

Thank you. And just changing topics a bit on to off-premise sales, so your delivering, your takeout.

You mentioned in your prepared remarks, I believe, about 10% of the off-premise was coming from a new channel. Maybe you could talk a little bit more about your of-premise sales?

And any strategies you have to grow that, particularly in Eastern Canada?

Yes. We have always talked about the fact that our rate of sales or penetration on takeout and delivery is much stronger in Western Canada, Manitoba, Saskatchewan, Alberta, BC because of the history of the brand in those provinces.

People are aware that not only do we have takeout and delivery, but we takeout and deliver our full menu. And so there is lots of knowledge and awareness and we are on people's radar for that.

Being a newer brand to Ontario and Atlantic and Québec as well, we are still continuing to promote that part of our business to engage with people to get on their radar, both from a telephone perspective for phone orders, but more so these days from online ordering through bostonpizza.com and from the MyBP app. And both of those areas continue to be rapidly growing areas of our takeout and delivery platform.

We continue to promote that in very targeted ways through digital advertising at times when people are making decisions about takeout and delivery around game times, for example or other special events, very targeted calls to action to bringing takeout and delivery orders. We also have partnerships with third-party delivery services.

And we continue to grow that as a way of bringing in new delivery orders in particular from third-party platforms and we have good success with that and want to continue to grow that as an incremental sales opportunity though a no-owned channel, but still a good way to grow. Takeout and delivery overall is a part of the business that we have done very well for a number of years and it continues to be about 15% of our total sales nationwide.

So do you view the aggregators as more of a potential partner or are they still, do you think, a potential source of additional competition for you business?

Well, because we ill have an established delivery business and they are offering delivery for locations that did not use to have that, they are bringing more people into the delivery space, so from that perspective, they would provide more competition in delivery. But we have tested and tried various third-party delivery services across the country.

And we found that they do have a different guest, a different customer that is looking at their online platform as the menu and you can choose to be on that menu or you can choose to not be on the menu. We have some locations where it doesn't make sense to partner with the third-party delivery services, but in most cases, we do feel it's incremental sales opportunity.

It is profitable for us. And like I said, we do delivery very well.

So our kitchens are set up. Our food is designed to travel.

And so we have had good success in a number of locations. And we still think we can continue to add to that part of the business.

Okay. Great.

And I wanted to ask a bit about technology. Boston Pizza International has had a few press releases recently about some investments at the restaurant level for use of pay at table functionality as well as back of house and kitchen technology.

Maybe you could spend a few minutes going through some of these things and how you feel that continues to add to the experience both in front and back of house of Boston Pizza and of course having those initiatives drive sales?

Yes. Elizabeth, it's Wes.

I will answer that. Yes.

So we have invested in some technology and we have really tried to enhance our loyalty platform which is called MyBP. We feel that the more that we can add to that app, the more guests will get to use that app.

So we most recently launched a feature called BP Quick Service in test locations at 39 locations in Ontario. The functionality of this within that is one, you can pay at table.

So a very frictionless experience where you can through three buttons pay your bill and close out your transaction. You also have the ability to call your server.

So at any time during the dining experience, you can send out a server alert and somebody will be at your table within 90 seconds to two minutes. And then we have also added a reorder function within that to reorder any alcoholic beverages.

So we are excited about rolling that out nationwide. We are just in the test phase.

And the other thing that you can now do through the app and it is linked to our KVS system, our kitchen video system, is you can book reservations at restaurants that have KVS in place. So we typically haven't taken reservations and now you can through this application.

We also have a kitchen system which is meant to help in the back office and more with helping production within the restaurant and within the kitchen and also have the menus on board. It's much more user-friendly and we can schedule things much better through that system.

So we continue to invest. That's in over 100 locations throughout Canada and we continue to implement that across Canada.

Okay. Great.

That's helpful. Thank you.

And just maybe one final question for me in terms of the new stores this year. I know you mentioned already there are five that are under construction.

Generally, are you looking to add stores across Canada? Or is there a region where you think that you are going to be having more growth?

Any comment there?

Yes. So I would last year as a good example.

The stores that we opened last year were spread across seven provinces. We happen to have three open in the province of Manitoba.

I know that was bit of an unusual occurrence but we do see growth right across the country. And we continue to see that in our pipeline going forward.

Obviously if you look at our penetration, a representation per capita, we are most built out in Western Canada, particularly Alberta with the least representation in the province of Quebec. But we see good growth opportunities on Ontario.

We have got a couple of stores in the pipeline for Ontario. Atlantic, we have got some sites that we are looking at still in the Atlantic.

And about three weeks, two weeks from now, we are going to open a new location, Medicine Hat, Alberta. All the new builds take in our new prototype.

So new design, new décor, new exterior, signage, all that stuff. So a great new look and we are excited to bring that, to not just to new location through 10 to 15 new builds a year, but also through the renovation program which is 40 to 50 locations a year, again closing down, getting that refreshed look on the interior, new AV, new technology throughout the restaurant and new signage and exterior.

So when they reopen from those renovations, Clifton Hill, for example, which is our restaurant in Niagara Falls, big store, closed, did a major renovation. I just saw the pictures but I am going to head over there and check it out in person, but it just really reinvigorates the look of the store and refreshes it.

So there's a bunch of things we are excited about with construction in new stores but also in the renovation process.

Okay. Great.

And actually I do have one final question, if I may. I am sorry.

Just to go back to the previous commentary on technology. Are you able to split up right now in terms of your off-premise, your delivery and takeout orders, the percentage that comes from the app versus the telephone?

Yes. I am believing it's about 40% is through the online ordering platform and 60% is still through the phone.

So our goal is to push more people to online ordering and through the app just because it is the perfect server. It knows what you ordered last time.

It knows what needs to go with specific combinations and it makes great recommendations on what other people have ordered with relation to what you have ordered. And that's been climbing over the years.

So we continue to push people to online ordering.

And that would include the app, MyBP app. But the results will include our website, bostonpizza.com.

Exactly.

And is it fair to say that comparing online or app versus a phone order, the online or the app order has a higher average ticket?

Yes. It's about 15% higher than a telephone order.

Okay. Great.

Thank you for your time. Those were all of my questions.

Thank you. Thanks Elizabeth.

Okay. Good morning.

It's my first time calling in. So hopefully I will get this right.

So, you can hear me?

Yes. We can.

Hi Shawn.

Hi. Okay.

So given the importance of menu price increases to the franchise sales, are you able to tell me what the average increase was, say, last June? And then how much was increased in Ontario in January 1?

And whether it was sort of a full increase? Or you would expect more reaction to the minimum wage increase in Ontario still to come in June?

Yes. Shaw, it's Jordan.

So in markets that are experiencing higher minimum wage, we do occasionally do off-cycle increases. So that would include an increase on October 1 and January 1 for regions like Alberta and Ontario where they have had rapid rises in minimum wage.

All of those increases would be in the 1% to 3% range. And that's what we are looking at in June for our national menu repricing.

They do vary, as I mentioned earlier in the call. We have 18 different menu groups that work together to come up with new menu pricing on an annual basis.

Generally we don't do off-cycle menu increases. We just do it once a year when we reprint the national menu.

But occasionally we will have groups come forward and ask to do an off-cycle increase. We want to keep the increases small, like I said 1% to 3% on average.

But we do respond to both rising input costs including labor and other costs at the store level. And we do want to keep them modest rather than do a large increase all at one time.

And we would expect that to continue in the places that are experiencing labor price increases. We don't have anything scheduled for off-cycle call up for the fall or for next January 1.

But we would consider it based on what's going on competitively in those markets and also again in terms of the rising input costs.

Okay. That's good information.

Thank you. I have a few other questions.

Some random perhaps. So how big of an issue is cannibalization of sales of nearby Boston Pizza restaurants after a new one opens?

Sure. While we are very careful with our development, we do provide a one-mile radius in the franchise agreement for any location so they have a protected one-mile.

But we are in the business of creating profitable stores. So we have an interest in protecting the franchisee's profitability and being careful on new development of Boston Pizza and what impact that will have on the sales of other Boston Pizza.

So we do a lot of analysis to make sure that cannibalization isn't an issue or is certainly managed. Some of that is, we have multiple owners who would say if there is going to be another Boston Pizza opened up in their area rather that they would come and look at the site and make, it's not quite a right of first refusal but they would certainly be considered if they are a good store operator, why wouldn't you expand and grow the footprint and have a bigger pie overall.

So we have some of that with groups expanding to new territories in their surrounding areas. It's more of an issue in Western Canada and particularly in our place back at Alberta where we have 106 or 107 locations there and some deep penetration after 54 years in that market.

But generally speaking, we haven't had an issue around cannibalization and certainly as we go to areas like Quebec, even Ontario, there is still lots of territories that have no effect on other Boston Pizza that there is enough population, even in small towns where we can go into and do quite well. So it's always a consideration for sure.

And we have years of experience of analyzing trade patterns and looking at where guests are drawing from, takeout and delivery areas, all that type of stuff to determine what impact we think cannibalization will have. But at the end of the day, if we don't go into a site, it's likely not going to sit empty, it's going to be another competitor that goes in there and we would have some cannibalization, if you will, call it something different, just competitive pressures from having another operator open up on a restaurant site rather than having BP go in there.

So always a consideration, Shawn but not something that we think is material in terms of a barrier to new openings going forward.

Okay. That's good information on that.

Thinking of advertising, I have seen some Boston Pizza advertisements on television, maybe I am watching less television now, but maybe not as many as in some past years or am I mistaken. Like, what's the budget for advertising?

Or is it maybe it's happening somewhere else rather than TV? Advertising and promotion, is the budget still up for that?

Or what can you say about that?

Yes. I mean our advertising co-op is created by a 3% of franchise sales.

So all of our food sales times 3% creates the co-op. So because our franchise sales have continued to grow, the resource or the dollars available for marketing have grown over the years in relation to that.

And so it's not that we are spending less on marketing, we are spending less on television and we are not alone. People are watching less television.

Other than live events, a lot of it is recorded, PVRs. A lot of it is Netflix or HBO or other services that don't have commercials.

And also it's a bit of a strategy shift for us where we used to invest a lot of our money, not just in television but in live sports television. We had a brand orientation around sports and fan meeting and the tagline, We will make you a Fan, was in place for a number of years and we invested heavily in partnerships with sports properties also with sports advertising.

I think as we look to broaden our appeal across a number of segments, young families, ladies, just a wider audience, maybe that we are missing on focusing too heavily on sports bar side of our of our business that we have started to put our advertising dollars, not just into other areas of television but also into digital platforms or digital ads that would pop up on YouTube or on Google or other ways of reaching our guests in a more targeted way. So it maybe that you are seeing less of it on television, but if you happen to be searching for something or be looking for a place to go for lunch or make a reservation, we would pop-up as an alternative or an ad at that time.

Okay. That's some good information and good to be reminded that it's always 3%.

So it's not as if that budget has gone away by any means. Okay.

You mentioned earlier about the lower interest on the BP Loan and I think that loan got paid off. So did that affect the distributable cash per unit or not?

I was a little confused on the point.

Yes. So Shawn, it's Wes.

Last year as part of the transaction where Jim Treliving bought out George Melville as a 50% partner, we took the opportunity to extinguish the BP Loan between BPI and the income fund. But what we also did as part of that is we eliminated some Class C Units.

So in effect, it had no impact on distributable cash because we eliminated both the revenue and the expense and they were offsetting each other. So no impact.

It was about $1.8 million a year of revenue and $1.8 million a year in distributions through the Class C interest expense that was also eliminated.

Okay. I will make this my last question.

I am not sure you are able to say anything about the distributions per unit and the future of that. With the payout ratio running out a little over 100% in the last 12 months and of course higher than that in Q1 and I guess with the price increases and that would make revenue go up but then traffic goes down.

I guess I am just wondering if I have to worry that there could potentially be any kind of a small cut to the distribution? And I am not sure if you are able to speak to that.

Yes. Our goal is to maintain the payout ratio very close to 100% and we have done that over the years.

As a reminder, Q1 is always a very tough quarter for us, from a payout ratio perspective. It's usually in excess of 100%.

And we do have better quarters in the second, third and fourth. While the payout ratio has been a little bit higher, our goal is when our payout ratio is in the mid-90s.

We like to think about distribution changes in our distribution policy. Being at 100%, that's not on the radar at this point.

But that's why we also have built up cash and we regularly disclose the cash that we have on hand. We have about $2.4 million on our balance sheet.

So that helps us get through times when sometimes the same-store sales growth isn't quite there. So that's a bit of our insurance policy on changes in our payout ratio that are in excess of 100%.

Okay. Great.

Thank you. That's all my questions.

Thank you for those responses.

Bye Shawn.

Okay. Since there are no further questions, I would like to thank you all for taking the time to listen in.

We look forward to speaking with you again at our second quarter conference call in August. Thank you.