Boston Pizza Royalties Income Fund (TSE:BPF.UN) and Boston Pizza International (BPI) reported what management described as a strong finish to 2025, highlighted by record annual total franchise sales for the Boston Pizza brand and continued same-restaurant sales growth driven by takeout and delivery momentum, promotional activity, and sports viewing.
Fourth-quarter sales and same-restaurant sales trends
President Jordan Holm said the fourth quarter sustained the momentum built through earlier quarters in 2025, despite what he characterized as “mounting trade tensions and broader macroeconomic uncertainties.”
Same-restaurant sales (SRS) were 3.7% for the fourth quarter and 4.7% for 2025. Holm attributed the fourth-quarter SRS performance principally to continued momentum in takeout and delivery and “effective promotional initiatives,” adding that the Major League Baseball playoffs also had a positive impact. For the full year, he cited similar drivers, along with favorable comparisons to a softer prior-year performance and positive impacts from hockey and baseball playoffs.
Marketing initiatives and menu updates
Holm outlined several marketing campaigns during the quarter, beginning with a “Game Day” menu launch aligned with football season, which included value deals and weekly giveaways. He said the campaign was supported by TV, digital, and social media coverage.
The company also launched a holiday menu featuring new items, including the Pepperoni Stinger Pizza and Stuffed Crust Mozza Sticks. Holm said both items became guest favorites and will move into the core menu going forward.
Additionally, management highlighted its annual gift card incentive program, under which guests who purchased CAD 50 or more in gift cards received a CAD 10 promotional card redeemable from January through March 2026.
Renovations, development activity, and early 2026 promotions
On restaurant development, Holm said nine Boston Pizza restaurants were renovated during the fourth quarter, with 40 renovations completed in total during 2025.
During the Q&A session, management said it expects renovations in 2026 to be “about the number” completed in 2025, or roughly 40, noting franchisees are required under franchise agreements to renovate every seven years. Holm added that audio-visual investments are often a significant part of the guest-facing upgrades and that renovation work can be scheduled during quieter periods when some restaurants may close for a week to 10 days to complete substantial work.
Holm also discussed the pipeline for new restaurant openings. He said there were no new restaurants opening in 2025, but the company has projects underway for 2026. Management did not provide a forecast for the number of openings, citing construction schedules and permitting. Holm said one project in British Columbia and one in Ontario had been intended to open in 2025 but were pushed into 2026, with additional projects expected later in the year.
For marketing initiatives entering 2026, Holm said Boston Pizza began the first quarter with a “Pasta Tuesday all month long” promotion in January, offering pastas starting at CAD 11.99 and gourmet pastas for CAD 15.99. He also highlighted a partnership with Pepsi during the NFL playoff season, including prize opportunities such as a trip to a regular-season football game. For Valentine’s Day, Boston Pizza planned to sell heart-shaped pizzas, with CAD 1 from each pizza donated to support local charities.
Looking further into 2026, Holm said the company plans to activate marketing opportunities tied to the Olympics and the World Cup, and to support franchisees in community engagement efforts.
Fund financial results, distributable cash, and distributions
Chief Financial Officer Michael Harbinson reviewed Fund-level financial performance. Royalty income totaled CAD 9.8 million in the fourth quarter and CAD 39.1 million for 2025, compared with CAD 9.4 million and CAD 37.3 million in the prior-year periods. Distribution income was CAD 3.2 million in the fourth quarter and CAD 12.8 million for the year, compared with CAD 3.1 million and CAD 12.2 million a year earlier.
Harbinson said royalty and distribution income were based on 372 Boston Pizza restaurants in the Royalty Pool. In 2024, the Royalty Pool reported franchise sales of CAD 234.2 million for the fourth quarter and CAD 931.7 million for the year.
Net and comprehensive income was CAD 11.1 million for the fourth quarter, up from CAD 6.6 million a year earlier. Harbinson attributed the increase primarily to higher fair value gains and higher royalty and distribution income, partially offset by higher income tax expense and higher net interest expense. For the full year, net and comprehensive income rose to CAD 42.2 million from CAD 31.9 million, with Harbinson pointing to higher fair value gains, higher royalty and distribution income, and lower administrative expenses, partially offset by higher income tax expense and net interest expense.
Cash flows generated from operating activities were CAD 9.9 million for the fourth quarter (versus CAD 9.4 million in the prior year) and CAD 39.7 million for 2025 (versus CAD 38.1 million in 2024). Harbinson also emphasized that the Fund uses non-IFRS measures, including Distributable Cash and payout ratio, which management believes better reflect the Fund’s ability to pay distributions given the impact of non-cash items in net income.
Distributable Cash was CAD 7.9 million in the fourth quarter (up from CAD 7.5 million) and CAD 31.6 million for the year (up from CAD 30.4 million). Distributable Cash per unit was CAD 0.369 in the fourth quarter and CAD 1.487 for the year, compared with CAD 0.351 and CAD 1.429 in the prior-year periods.
Harbinson noted that the Fund issued a special cash distribution of CAD 0.11, declared on December 8, 2025 and paid on December 31, 2025, which affected payout ratios. The payout ratio was 127.3% for the fourth quarter and 101.9% for the year, compared with 118.4% and 99.9%, respectively, in 2024. Excluding the special distribution, he said the payout ratio would have been 97.5% for the fourth quarter and 94.5% for the year.
The Fund’s trustees approved a monthly cash distribution of CAD 0.12 per unit for January 2026, payable on February 27, 2026 to unitholders of record as of February 21, 2026. Harbinson said the trustees’ objective is to set a sustainable monthly distribution while monitoring available cash balances amid a “fluctuating economic outlook.”
Q&A: GST holiday, Olympics viewing, and growth expectations
In response to a question about lapping the GST holiday from late 2024 into early 2025, Harbinson said the impact was most pronounced in December and that the magnitude was “not overly significant.” He added that the January-over-January impact into early 2026 was “negligible.”
Holm said the company expects an uplift from Olympic viewing, particularly for hockey, noting that as events progress into medal rounds, Boston Pizza plans to position its restaurants as a destination to watch.
About Boston Pizza Royalties Income Fund (TSE:BPF.UN)
Boston Pizza restaurants offer a casual dining atmosphere with more than 100 menu items including a unique selection of gourmet pizzas, mouth-watering pastas and a wide variety of appetizers, meal-sized salads, entrees and desserts. Each Boston Pizza location provides three experiences under one roof, with a full service, family friendly casual dining restaurant, a separate sports bar, and take-out and delivery options.
