Pizza Pizza Royalty Corp. - Management Reports 2021

Pizza Pizza Limited Management’s Discussion and Analysis

This Management’s Discussion and Analysis (“MD&A”) of the financial position and results of operations of Pizza Pizza Limited (“PPL” or the “Company”) covers the 14-weeks (the “Quarter”) and 53-weeks (the “Year”) ended January 3, 2021. The MD&A should be read in conjunction with the Company’s January 3, 2021 audited consolidated financial statements and notes thereto (the “Financial Statements”). The Company prepares its Financial Statements in accordance with International Financial Reporting Standards (IFRS). The MD&A has been prepared as of March 2, 2021.

OVERVIEW

The Company, a privately-owned Canadian corporation, operates two brands, Pizza Pizza and Pizza 73. The Company acquired 100% of the shares of Pizza 73, Inc. (“Pizza 73”) on July 24, 2007. Immediately following the acquisition, the Company and Pizza 73 amalgamated, continuing to operate as Pizza Pizza Limited.

The Company pays a royalty to Pizza Pizza Royalty Limited Partnership (the “Partnership”) for the use of the Pizza Pizza Rights and Marks and the Pizza 73 Rights and Marks. (See “Pizza Pizza Limited and Pizza Pizza Royalty Corp.”)

About the Pizza Pizza Brand

Pizza Pizza restaurants operate primarily in the province of Ontario, where it dominates the pizza Quick Service Restaurant (“QSR”) segment and is a franchise-oriented restaurant business. Of the 622 Pizza Pizza restaurants at January 3, 2021, 597 are franchised or licensed and 25 are owned and/or managed as corporate restaurants. Of the 622 restaurants, 205 are non-traditional locations which have limited operating hours and a limited menu.

The Company provides a high level of service and operational support to its partners, including turn-key restaurants, a central food distribution centre which supplies all food and non-food items used in Pizza Pizza restaurant operations, and monitoring systems intended to ensure product and service quality and operational consistency across the chain.

The Company has a modern restaurant system. The centrally managed renovation or re-imaging program, funded by its franchisees, allows for the continuous renewal of the Pizza Pizza concept.

About the Pizza 73 Brand

There are 104 Pizza 73 locations operating in the QSR segment, principally in the province of Alberta. Of the 104 locations, 87 are traditional restaurants at January 3, 2021, eight of which are franchised or licensed and 79 are jointly-owned by the Company and an independent owner/operator. There are 17 non-traditional locations which have limited operating hours and a limited menu. Pizza 73 has seven traditional locations outside of Alberta; four in Saskatchewan, two in British Columbia, and one in the Yukon. Sales through its centralized call centre and on-line ordering, together, account for approximately 90% of Pizza 73’s system sales. The Pizza 73 business also includes a newly built, central food distribution centre in Edmonton.

Background

The Company’s three distinct revenue sources, food and beverage sales, receipt of royalty payments and profits from the 50% ownership in the Pizza 73 restaurants, are driven by changes in retail system sales at franchised, jointly controlled and company restaurants. Changes in retail system sales are driven by economic conditions, marketing initiatives and store counts. The Company monitors these metrics closely, as they directly impact its revenues and profits, and the Company strives to consistently increase the related amounts.

The Company devotes significant attention to its innovative marketing programs which are funded by the restaurant operators’ contribution to a marketing fund that is administered by the Company. In accordance with their franchise or operating agreements, each traditional Pizza Pizza restaurant contributes approximately 6% of system sales (in addition to the base royalty and other franchise fees) and each traditional Pizza 73 restaurant contributes approximately 8% of system sales.

PIZZA PIZZA LIMITED MANAGEMENT’S DISCUSSION AND ANALYSIS For the 14 week period from September 28, 2020 to January 3, 2021 and the 53-week period from December 30, 2019 to January 3, 2021

SELECTED FINANCIAL DATA

The selected financial data set forth below should be read in conjunction with the January 3, 2021 Financial Statements. The Company has a floating year-end of the Sunday closest to December 31, accordingly, quarters consist of four 13-week periods with an additional week added to the last quarter every five to six years.

Consolidated Financial Data and Adjusted EBITDA[(1)] Calculation

	For the 14-week	For the 13-week	For the 53-week	For the 52-week
	period ended January 3, 2021(2)	period ended December 29, 2019	period ended January 3, 2021(2)	period ended December 29, 2019
(all dollars in thousands,except number of restaurants)
System Sales(2),(3)	125,686	143,525	486,085	553,510
Same Store Sales Growth (SSSG) (4)	(17.6%)	2.0%	(12.5%)	0.5%
Number of Restaurants:
Traditional	504	514	504	514
Non-traditional	222	235	222	235
New restaurants opened	3	7	11	19
Restaurants closed	3	20	34	43
Revenues(5)	66,731	72,122	252,743	288,535
Cost of food sales and general & administrative
expenses	(46,011)	(41,802)	(161,556)	(183,953)
Equity income from the Partnership	1,781	2,140	6,726	7,590
Royalty payments	(8,029)	(9,541)	(31,789)	(35,946)
Loss on impairment of lease receivables	(49)	-	(759)	-
Operating income (loss)	(4,830)	1,911	(5,841)	(1,235)
Income tax recovery (expense)	3,060	(1,001)	2,589	207
Income (loss) for the period attributable to
the shareholders of Pizza Pizza Limited	(3,656)	1,716	(3,835)	2,489
Add (deduct):
Equity income from Partnership	(1,781)	(2,140)	(6,726)	(7,590)
Royalty payments	8,029	9,541	31,789	35,946
Amortization of deferred gain	(582)	(582)	(2,330)	(2,330)
Amortization(6)	5,956	125	19,495	3,731
Interest (income) / expense, net	39	(161)	(33)	(533)
Store service contributions(5)	(19,404)	(20,704)	(74,352)	(80,292)
Store service expenditures(5)	20,328	22,395	75,854	81,853
Rent impact from IFRS 16 leases(6)	(3,878)	-	(14,083)	-
Loss on impairment of lease receivables(6)	49	-	759	-
(Gain)/Loss on sale of Company-owned
restaurants	(24)	(294)	46	(300)
Amortization and taxes included in Equity income
from jointly-controlled companies	195	174	1,138	1,127
Provision for (recovery of) income taxes:
Deferred	(3,060)	1,001	(2,589)	(207)
Adjusted EBITDA(1)	$ 2,211	$ 11,071	$ 25,133	$ 33,894

PIZZA PIZZA LIMITED MANAGEMENT’S DISCUSSION AND ANALYSIS For the 14 week period from September 28, 2020 to January 3, 2021 and the 53-week period from December 30, 2019 to January 3, 2021

Notes:

1) ‘‘EBITDA’’ is not a recognized measure under IFRS. References to EBITDA are to earnings determined in accordance with IFRS applicable to the financial statements before amounts for interest, taxes and depreciation and amortization. In addition, the Company has adjusted EBITDA for unusual charges in an attempt to demonstrate the Company’s operations as if a recombination of the Company and Pizza Pizza Royalty Corp. (“PPRC”) occurred. Adjusted EBITDA excludes gains and losses on sales of assets and other items resulting from its relationship with the Partnership. The Company believes that, in addition to net earnings, adjusted EBITDA is a useful supplemental measure in evaluating its performance as it provides investors with an indication of cash available for debt service, working capital needs and capital expenditures. Investors are cautioned, however, that adjusted EBITDA should not be construed as an alternative to the statement of cash flows as a measure of liquidity and cash flows. The method of calculating adjusted EBITDA for the purposes of this MD&A may differ from that used by other issuers and, accordingly, adjusted EBITDA in this MD&A may not be comparable to adjusted EBITDA used by other issuers.
(2) PPL has a floating year-end of the Sunday closest to December 31, accordingly, interim periods consist of four 13-week periods with an additional week added to the last interim period every 5 to 6 years.
(3) System Sales reported by Pizza Pizza and Pizza 73 restaurants include the gross sales of Pizza Pizza company-owned, jointlycontrolled and franchised restaurants, excluding sales and goods and service tax or similar amounts levied by any governmental or administrative authority. System Sales do not represent the consolidated operating results of the Company.
(4) Same store sales growth (“SSSG”) is not a recognized measure under IFRS. References to SSSG are to the changes in period gross revenue of Pizza Pizza and Pizza 73 restaurants as compared to sales in the previous period, where the restaurant has been open at least 13 months. Additionally, for a Pizza 73 restaurant whose restaurant territory was adjusted due to an additional restaurant, the sales used to derive the Step-Out Payment may be added to sales to arrive at SSSG. SSSG does not have any standardized meaning under IFRS. Therefore, these figures may not be comparable to similar figures presented by other companies. See “Same Store Sales Growth”.
(5) As part of the transition to IFRS 15, the Company is required to record store service contributions and expenditures for advertising, order processing and commissary services provided by the Company in the statement of consolidated income. The Company has the ability to collect amounts that are in a deficit position in future years.
(6) As part of the transition to IFRS 16, the Company was required to recognize a lease receivable for certain subleases where the majority of risks and rewards were transferred to the sublessee. The Company assessed if the credit risk increased for lease receivables using a probability-weighted risk model. The Company amortizes the right-of-use assets from the lease commencement date to the end of the lease’s term. See “Adoption of IFRS 16”. As a result of adoption in the 53-week period ended January 3, 2021, the comparable period will not reflect the new accounting treatment.

COVID-19 IMPACT

The global crisis resulting from the COVID-19 pandemic has negatively impacted many businesses especially the foodservice industry, including the restaurant operations of the Company. Fortunately, the Company has been in the pizza delivery business for over 50 years with an established ordering and technology infrastructure, and is well positioned to service communities across Canada.

Pizza Pizza and Pizza 73 restaurant operators have taken significant measures in their restaurants to protect the health of employees and customers in compliance with physical distancing recommendations and requirements of applicable health authorities, including the closure of restaurant seating areas. Fortunately, the traditional restaurants were allowed to remain open for delivery and takeout sales throughout the pandemic. Beginning in early summer, governments began easing restrictions on dine-in restaurants, and system sales performance began to improve from (16.3%) SSSG in the second quarter to (9.5%) in the third quarter. However, as the number of COVID-19 cases increased in the fourth quarter, many areas reinstated the restrictions and System Sales were negatively affected. Overall, system sales have been negatively impacted for the Quarter and Year.

To better understand the impact of COVID-19 on system sales, readers are reminded that Pizza Pizza and Pizza 73 operate traditional and non-traditional restaurants. The sales mix includes delivery, pickup, and walk-in sales from traditional restaurants, plus sales at non-traditional locations.

Since the pandemic began, substantially all traditional Pizza Pizza and Pizza 73 restaurants have remained open across Canada. By brand, Pizza Pizza traditional restaurant sales have historically consisted of approximately 60% delivery and pickup sales and 40% walk-in sales, whereas Pizza 73 traditional restaurant sales have been approximately 90% delivery and pickup sales and only 10% walk-in sales. As a result of government-mandated physical distancing policies and stay-at-home orders, the walk-in sales at both brands decreased significantly. During the same period, delivery sales have grown, however, not enough to offset the lost walk-in sales.

PIZZA PIZZA LIMITED MANAGEMENT’S DISCUSSION AND ANALYSIS For the 14 week period from September 28, 2020 to January 3, 2021 and the 53-week period from December 30, 2019 to January 3, 2021

Non-traditional store locations, offering a limited menu and typically operating in sporting arenas, outdoor entertainment venues, universities, hospitals, and cinemas, account for nearly 10% system sales. Unfortunately, the majority of non-traditional Pizza Pizza and Pizza 73 locations closed in March 2020 and most have remained closed, although certain locations which initially closed have now reopened in a limited capacity.

The impact of COVID-19 was sudden and unprecedented, and the medium and long term impact to the Company will depend on consumer behaviour after the economy fully reopens, the financial solutions achieved with government, lenders, franchisees, and landlords, and the macro impact on the overall economy, in particular household debt and levels of disposable income. The Company continues to closely monitor recent health authority policy changes as communities encounter the pandemic’s prolonged impacts.

RESULTS OF OPERATIONS

The following should be read in conjunction with the Selected Financial Data provided herein and in conjunction with the Financial Statements. See “Critical Accounting Policies and Estimates”.

System Sales

		For the 13-week		For the 52-week
	For the 14-week	period ended	For the 53-week	period ended
	period ended	December 29,	period ended	December 29,
(in thousands of dollars)	January 3, 2021	2019	January 3, 2021	2019
Pizza Pizza	104,859	120,091	402,990	463,823
Pizza73	20,827	23,434	83,095	89,687
Total	125,686	143,525	486,085	553,510

System sales are affected by the net change in the number of restaurants and SSSG reported during the Quarter and Period.

Pizza Pizza and Pizza 73 System Sales have been negatively impacted as its restaurant operators have taken significant measures in their restaurants to protect the health of employees and consumers in compliance with social-distancing recommendations and requirements of applicable health authorities, including the closure of restaurant seating areas. Fortunately, the restaurants were allowed to remain open for delivery, takeout sales and, for a brief time, limited dine-in at certain locations as health authorities allowed.

Pizza Pizza and Pizza 73 operate traditional and non-traditional restaurants. The sales mix includes delivery, pickup, walk-in and non-traditional sales. By brand, Pizza Pizza traditional restaurant sales have historically consisted of approximately 60% delivery and pickup sales and 40% walk-in sales, whereas Pizza 73 traditional restaurant sales have been approximately 90% delivery and pickup sales and 10% walk-in sales.

The majority of non-traditional Pizza Pizza and Pizza 73 restaurants have closed, with the exception of a few locations in hospitals and gas stations. Normally, non-traditional locations, offering a limited menu and operating, for example, in sporting arenas, outdoor entertainment venues, universities, hospitals, and cinemas, account for nearly 10% of System Sales. See “COVID-19 Impact on the Company’s Business”, “Same Store Sales Growth” and “New Restaurant Development”.

PIZZA PIZZA LIMITED MANAGEMENT’S DISCUSSION AND ANALYSIS For the 14 week period from September 28, 2020 to January 3, 2021 and the 53-week period from December 30, 2019 to January 3, 2021

Same Store Sales Growth

SSSG, the key driver of yield growth for the Company, decreased 17.6% (2019 – increased 2.0%) for the Quarter and decreased 12.5% (2019 – increased 0.5%) for the Year. See “COVID-19 Impact”. As mentioned previously, the loss of walk-in sales and non-traditional sales have resulted in a significant reduction in System Sales, however the increase in delivery sales at both brands have partially offset this reduction.

SSSG Fourth Quarter (%)	Year (%)
2020 2019	2020 2019
Pizza Pizza -17.6 2.0 -13.4 0.0
Pizza 73 -17.6 2.0 Combined -17.6 2.0	-8.1 3.1 -12.5 0.5

SSSG is normally driven by the change in the customer check and customer traffic, both of which are affected by changes in pricing and sales mix. As mentioned earlier, beginning in mid-March, SSSG was negatively impacted as a direct result of the COVID-19 pandemic and the government-mandated social distancing policies. As a result of closing restaurant seating, walk-in sales decreased significantly, negatively impacting overall customer traffic. The decline in walk-in sales resulted in an overall increase in the average check at both brands as the average check of a walk-in customer is much lower than a delivery order check amount. The negative sales effect from the decline in customer traffic, as well as the decrease in non-traditional sales, more than offset the effect of the increase in the average check, resulting in negative SSSG for the Quarter and Period. See “COVID-19 Impact”.

SSSG is a key indicator used by the Company to measure performance against internal targets and prior period results. SSSG is commonly used by financial analysts and investors to compare the Company to other QSR brands. SSSG is defined as the change in period gross revenue of Pizza Pizza and Pizza 73 restaurants as compared to sales in the previous comparative period, where the restaurant has been open at least 13 months. Additionally, for a Pizza 73 restaurant whose restaurant territory was adjusted due to an additional restaurant, a Step-Out Payment may be added to sales to arrive at SSSG. It is a key performance indicator for the Company as this measure excludes sales fluctuations due to store closings, permanent relocations and chain expansion.

		For the 13-week		For the 52-week
	For the 14-week	period ended	For the 53-week	period ended
	period ended	December 29,	period ended	December 29,
(in thousands of dollars)	January 3, 2021	2019	January 3, 2021	2019
Total System Sales	125,686	143,525	486,085	553,510
Adjustments for stores not in both
fiscal years, and step-outs	(11,169)	(1,605)	(16,960)	(7,438)
Same Store Sales	114,517	141,920	469,125	546,072
SSSG	(17.6%)	2.0%	(12.5%)	0.5%

New Restaurant Development

	For the 14-week period ended January 3, 2021	For the 14-week period ended January 3, 2021
(Number of Restaurants)1	PizzaPizza Traditional Non-traditional Total 419 204 623 1 1 2 (3) - (3)	Pizza73 Traditional Non-traditional Total 86 17 103 1 - 1 - - -	PPL
			Grand Total
As at September 27, 2020 Openings Closings			726 3 (3)
As at January3,2021	417 205 622	87 17 104	726

PIZZA PIZZA LIMITED MANAGEMENT’S DISCUSSION AND ANALYSIS For the 14 week period from September 28, 2020 to January 3, 2021 and the 53-week period from December 30, 2019 to January 3, 2021

	For the 13-week period ended December 29, 2019	For the 13-week period ended December 29, 2019
(Number of Restaurants)1	PizzaPizza Traditional Non-traditional Total 425 230 655 7 - 7 (4) (13) (17)	Pizza73 Traditional Non-traditional Total 87 20 107 - - - (1) (2) (3)	PPL
			Grand Total
As at September 29, 2019 Openings Closings			762 7 (20)
As at December 29,2019	428 217 645	86 18 104	749

During the Quarter, the Company opened one traditional and one non-traditional Pizza Pizza restaurant as well as one traditional Pizza 73 restaurant; the Company closed three traditional Pizza Pizza restaurants.

	For the 53-week period ended January 3, 2021	For the 53-week period ended January 3, 2021
(Number of Restaurants)1	Pizza Pizza Traditional Non- traditional Total 428 217 645 6 3 9 (17) (15) (32)	Pizza 73 Traditional Non-traditional Total 86 18 104 2 - 2 (1) (1) (2)	PPL
			Grand Total
As at December 29, 2019 Openings Closings			749 11 (34)
As at January3,2021	417 205 622	87 17 104	726

For the 52-week period ended December 29, 2019

(Number of Restaurants)1	PizzaPizza Traditional Non- traditional Total 428 232 660 11 8 19 (11) (23) (34)	Pizza73 Traditional Non-traditional Total 88 25 113 - - - (2) (7) (9)	PPL
			Grand Total
As at December 31, 2018 Openings Closings			773 19 (43)
As at December 29,2019	428 217 645	86 18 104	749

During the Year, the Company opened six traditional Pizza Pizza restaurants and three non-traditional restaurants, including openings in Ontario, Quebec, Alberta and British Columbia. The Company closed 17 traditional and 15 non-traditional Pizza Pizza restaurants. At the Pizza 73 brand, the Company opened two traditional restaurants, and closed one traditional and one non-traditional restaurant.

As mentioned earlier, during the Year, substantially all traditional Pizza Pizza and Pizza 73 restaurants remained open across Canada. However, the majority of non-traditional Pizza Pizza and Pizza 73 restaurants have closed, with the exception of a few locations in hospitals and gas stations.

New restaurant construction was temporarily paused in Ontario and Quebec in the second quarter, however, restaurant construction and renovations restrictions on commercial construction were lifted and construction resumed. See “COVID-19 Impact on the Company’s Business”.

1 Number of restaurants added to the Partnership’s Royalty Pool each year may differ from the number of restaurant openings and closings reported by the Company on an annual basis as the periods for which they are reported differ slightly.

PIZZA PIZZA LIMITED MANAGEMENT’S DISCUSSION AND ANALYSIS For the 14 week period from September 28, 2020 to January 3, 2021 and the 53-week period from December 30, 2019 to January 3, 2021

Revenues

		For the 13-week			For the 52-week
	For the 14-week	period ended		For the 53-week	period ended
	period ended	December 29,	%	period ended	December 29,	%
(in thousands of dollars)	January 3, 2021	2019	change	January 3, 2021	2019	change
Food Sales	40,515	43,304	(6.4%)	152,457	177,463	(14.1%)
Royalties, franchise fees
and other revenue	6,813	8,114	(16.0%)	25,934	30,780	(15.7%)

Food sales are driven by SSSG and movement in the number of stores. Food sales represent food sales from the Company’s distribution centre to the stores, after the elimination of intercompany transactions, as well as corporate store food sales to customers. For the Quarter and Year, the decrease in food sales relates to the impact of COVID-19 on the Company’s operations, as well as the change in the number of restaurants being serviced compared to the same periods of 2019. See “COVID-19 Impact on the Company’s Business” and “New Restaurant Development”.

Royalties, franchise fees and other revenue for the Quarter and Year decreased when compared to the same periods in 2019. The decrease in the Quarter and Year is the result of less royalties earned on the system sales due to the impact of COVID-19 on the restaurants’ sales, as well as the change in the number of restaurants open as compared to the same periods of 2019. See “COVID-19 Impact on the Company’s Business” and “New Restaurant Development”.

Store service contributions and expenditures

		For the 13-week			For the 52-week
	For the 14-week	period ended		For the 53-week	period ended
	period ended	December 29,	%	period ended	December 29,	%
(in thousands of dollars)	January 3, 2021	2019	change	January 3, 2021	2019	change
Contributions	19,404	20,704	(6.3%)	74,352	80,292	(7.4%)
Expenditures	(20,328)	(22,395)	(9.2%)	(75,854)	(81,853)	(7.3%)
Net recovery/(deficit)	(924)	(1,691)	(45.4%)	(1,502)	(1,561)	(3.8%)

As part of the transition to IFRS 15, in its consolidated statement of income, the Company is required to record store service contributions and expenditures in relation to central advertising and order processing at both brands, as well as Pizza 73 commissary services that are provided by the Company. Store service contributions fluctuate as system sales and new store openings vary. The Company expects expenditures to match contributions, however due to timing of advertising campaigns and other significant expenditures, the Company anticipates fluctuations in the net recovery/deficit balance from period to period.

Store service contributions decreased during the Quarter and Year as System Sales decreased due to COVID-19. Store service expenditures decreased with the decreased contributions, and were further decreased by the receipt of the wage subsidy provided by the Federal Government during the COVID-19 pandemic. The Company received $53,000 and $577,000 in wage subsidies relating to store service expenditures for the Quarter and Year, respectively (2019 – $nil and $nil).

PIZZA PIZZA LIMITED MANAGEMENT’S DISCUSSION AND ANALYSIS For the 14 week period from September 28, 2020 to January 3, 2021 and the 53-week period from December 30, 2019 to January 3, 2021

Cost of Food Sales

		For the 13-week			For the 52-week
	For the 14-week	period ended		For the 53-week	period ended
	period ended	December 29,		period ended	December 29,
(in thousands of dollars)	January 3, 2021	2019 % change		January 3, 2021	2019 % change
Cost of food sales	31,865	33,597	(5.2%)	121,308	143,437	(15.4%)

Cost of food sales is dependent on the movement in food sales for the Quarter and Year. The change in the cost of food sales is attributable to the decrease in food sales resulting from the impact of COVID-19. See “COVID-19 Impact on Company’s Business”. Furthermore, the Company continues to leverage its buying power and manage food costs through its centralized purchasing system.

General and Administrative (“G&A”) Expenses

		For the 13-week			For the 52-week
	For the 14-week	period ended		For the 53-week	period ended
	period ended	December 29,		period ended	December 29,
(in thousands of dollars)	January 3, 2021	2019 % change		January 3, 2021	2019 % change
G&A expenses	14,147	8,205	72.4%	40,248	40,516	(0.7%)

G&A expenses include corporate expenses and company store expenses incurred at the Company’s owned and managed stores.

The increase in G&A expenses for the Quarter relates to right-of-use assets depreciation of $5.1 million, offset by a credit to rent expense of $2.3 million and rental income of $2.5 million due to the implementation of IFRS 16. Additionally, the Company incurred severance expenses due to corporate restructuring of $2.4 million. This increase was slightly offset by receipt of the wage subsidy provided by the Federal Government during the COVID-19 pandemic. The Company received $343,000 in wage subsidies relating to G&A expenses for the Quarter (2019 – $nil).

For the Year, the slight decrease in G&A expenses relates to a decrease in company store expenses, corporate expense management, and the receipt of funds from the government's COVID-19 emergency wage subsidy. The Company received $2.2 million in wage subsidies which offset the increased G&A expenses relating to severances. Additionally, as a result of COVID-19, the Company reduced its overall G&A spending while employees worked from home and the management team participated in voluntary wage reductions. The Company also recorded right-of-use assets depreciation of $15.8 million, offset by a credit to rent expense of $8.3 million and rental income of $9.0 million due to the implementation of IFRS 16. These savings were offset by the severance expense mentioned above, as well as bad debt expense.

Royalty Payments

		For the 13-week			For the 52-week
	For the 14-week	period ended		For the 53-week	period ended
	period ended	December 29,		period ended	December 29,
(in thousands of dollars)	January 3, 2021	2019	% change	January 3, 2021	2019 % change
Pizza Pizza	6,204	7,352	(15.6%)	24,320	27,735	(12.3%)
Pizza 73	1,825	2,189	(16.6%)	7,469	8,211	(9.0%)
Total	8,029	9,541	(15.8%)	31,789	35,946	(11.6%)

As per the License & Royalty Agreements, the Company pays the Partnership a monthly royalty based on the system sales of the Pizza Pizza and Pizza 73 restaurants in the Royalty Pool. The restaurants in the Royalty Pool decreased to 645 on January 1, 2020 to include 20 new restaurants less 43 closed restaurants. In the prior year, the Royalty Pool included 772 restaurants. See “Pizza Pizza Limited and Pizza Pizza Royalty

PIZZA PIZZA LIMITED MANAGEMENT’S DISCUSSION AND ANALYSIS For the 14 week period from September 28, 2020 to January 3, 2021 and the 53-week period from December 30, 2019 to January 3, 2021

Corp.”, “Royalty Pool Adjustments”, and “Restaurants Added to the Royalty Pool”.

For the Quarter and Year, the decrease in royalty payments is the result of the negative SSSG resulting from the impact of the COVID-19 pandemic, as well as the decrease in the number of restaurants in the Royalty Pool. See “Same Store Sales Growth” and “COVID-19 Impact on Company’s Business”.

Loss on Impairment of Lease Receivables

As a result of implementing IFRS 16, the Company performs a test to determine if the majority of risks and rewards have been transferred to a sublessee. If the majority of risks and rewards are indeed transferred to a sublessee, the Company treats the lease as a finance lease and derecognizes the right-of-use asset while creating a lease receivable. If the majority of risks and rewards are not transferred to a sublessee, the Company retains the right-of-use asset and recognizes revenue on the rental income. The Company recognized rental income of $2.5 million for the Quarter and $9.0 million for the Year, respectively. The Company records rental income as an offset against G&A expenses.

Lease receivables are reviewed for impairment based on expected losses at each balance sheet date in accordance with IFRS 9 – Financial Instruments. An impairment loss is recorded when the credit risk is assessed to have increased for the lease receivables. The Company has developed a probability-weighted risk model used to assess the credit risk of all lease receivables.

For the Quarter, the Company has recorded a non-cash expected credit loss provision on lease receivables of $49,000 and a $759,000 non-cash expected credit loss provision for the Year (2019 – $nil and $nil). See “Adoption of IFRS 16”.

Equity income from Pizza Pizza Royalty Limited Partnership

The Company accounts for its investment in the Partnership using the equity method of accounting. As at January 3, 2021, the Company owned an effective 23.5% interest in the Partnership, compared to 23.0% in 2019. The Company’s 23.5% interest in the earnings of the Partnership is through its ownership of Class B and Class D Units. (See “Pizza Pizza Limited and Pizza Pizza Royalty Corp.”).

Equity income decreased to $1.8 million for the Quarter and $6.7 million for the Year when compared to the prior year comparative periods of $2.1 million and $7.6 million, respectively. The decrease in equity income reflects lower earnings of the Partnership from less royalty income, offset slightly by the increase in the Company’s ownership.

Equity income from Jointly-controlled companies

The Company accounts for its 50% share interest in 79 jointly-controlled Pizza 73 restaurants (2019 – 79 Pizza 73 restaurants) as an investment in joint ventures, and applies the equity method of accounting.

For the Quarter and Year, equity income increased to $1.1 million and $4.7 million, respectively, when compared to the prior year comparative periods of $1.0 million and $4.1 million. The increase in equity income for the Year is largely due to the receipt of wage and rent subsidies provided by the Federal Government, which offset the negative effects of the COVID-19 pandemic on the businesses. For the Quarter and Year, the equity income includes $238,000 and $781,000 of subsidies received from the government, respectively (2019 - $nil and $nil).

Deferred tax recovery/expense

Deferred tax recovery was $3.1 million for the Quarter and $2.6 million for the Year, compared to deferred tax expense of $1.0 million for the comparable quarter and deferred tax recovery of $207,000 in the prior year. The variance is due to the Company recognizing its non-capital losses from current and previous years’ taxable income.

Net income (loss)

The Company reported a net loss of $3.7 million for the Quarter and $3.8 million for the Year, compared to

PIZZA PIZZA LIMITED MANAGEMENT’S DISCUSSION AND ANALYSIS For the 14 week period from September 28, 2020 to January 3, 2021 and the 53-week period from December 30, 2019 to January 3, 2021

net income of $1.7 million and $2.5 million in the prior year’s comparable periods. The variance in earnings for the Quarter and Year is mainly attributed to a decrease in food sales, royalties, and net store service contributions resulting from the impact on COVID-19 on the Company’s operations, as well as the non-cash impact of the adoption of IFRS 16, including the non-cash loss on impairment of lease receivables. See “COVID-19 Impact on Company’s Business” and “Adoption of IFRS 16”.

Shareholders’ Deficiency

The $105.4 million shareholders’ deficiency shown in the Financial Statements is largely a result of the Company having paid $107.5 million in capital dividends to shareholders in 2005, $16.8 million in capital dividends in 2007, $7.2 million in capital dividends in 2012, and $39.0 million in capital dividends in 2016. The source of dividends to shareholders was the proceeds received from the Partnership in payment for the Company’s Rights & Marks in 2005, funds from operations since 2005, and proceeds from the sale of Class B Partnership Units in 2015. The balance of the deferred gain from the 2005 sale of the Company’s Rights & Marks is $194.6 million as at January 3, 2021 and is being amortized into earnings over a term of 99 years.

SUMMARY OF QUARTERLY RESULTS

The Pizza Pizza and Pizza 73 restaurants are subject to seasonal variations in their business; system sales for the first quarter have generally been the softest and the fourth quarter system sales have been the strongest.

	14 weeks	13 weeks	13 weeks	13 weeks	13 weeks	13 weeks	13 weeks	13 weeks
	ended	ended	ended	ended	ended	ended	ended	ended
	January 3,	September	June 28,	March 29,	December	September	June 30,	March 31,
	2021	27,2020(1)	2020(1)	2020(1)	29,2019	29,2019	2019	2019
Revenues	$ 66,731	$ 62,341	$ 58,623	$ 65,047	$ 72,122	$ 71,777	$ 72,479	$ 72,157
Net income
(loss)	$ (3,656)	$ (316)	$ 2,078	$ (1,941)	$ 2,892	$ 253	$ 900	$ (381)
Adjusted
EBITDA	2,211	$7,464	$8,437	$7,021	$11,071	$7,443	$7,561	$7,602

(1) The prior periods have been restated due to reclassifications of right-of-use assets and lease receivables from the adoption of IFRS 16. See “Adoptions of IFRS 16”.

LIQUIDITY & CAPITAL RESOURCES

The following table provides an overview of the cash flows for the periods:

Cash provided by (cash used in): Operating activities Investing activities Financing activities Increase in cash	For the 53-weeks ended January3,2021 For the 52-weeks ended December 29,2019
	16,081 (6,638) 11,190 9,971 (23,736) (2,963)
	3,535 370

As of January 3, 2021, the Company had negative working capital of $28.4 million and its cash, cash equivalents and short-term investment were $17.2 million. The Company collects most of its receivables within seven days from the date of the related sale and pays its payables within 30 days; the Company generally experiences over 100 turns of inventory per year. These factors, coupled with ongoing cash flows from operations, which are used primarily to pay the Partnership the royalty on the Royalty Pool system sales, may reduce its working capital amounts. The Company’s primary sources of liquidity are cash flows from operations and distributions received on the Company’s interest in the Partnership. The Company has

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PIZZA PIZZA LIMITED MANAGEMENT’S DISCUSSION AND ANALYSIS For the 14 week period from September 28, 2020 to January 3, 2021 and the 53-week period from December 30, 2019 to January 3, 2021

historically funded capital expenditures and debt repayments from cash flows from operations and proceeds from the disposal of company-owned restaurants. Given the impact of COVID-19, the Company has engaged in additional measures to maintain liquidity, including extended payment terms with vendors and accessing government subsidy programs. The Company would obtain advances from its parent company in the event it experiences short-term liquidity issues. See “COVID-19 Impact on Company’s Business”.

Cash provided by operating activities for the Year was $16.1 million compared to cash used of $6.6 million in the prior year comparable period. The $6.3 million decrease in the earnings for the Year was offset by adding back $15.8 million in depreciation of right-of-use assets and $759,000 in loss on impairment of lease receivables. When compared to the prior year comparative period, the $22.7 million increase in cash provided by operating activities is largely attributable to cash provided by changes in working capital, providing $12.7 million compared to $1.8 million in the prior Year.

Cash provided by investing activities for the Period was $11.2 million compared to cash provided by investing activities of $10.0 million in 2019. The increase in cash provided by investing activities is attributed to rent payments received from lease receivables, offset by a net $3.5 million of disbursements from renovation funds compared to a net $4.3 million of contributions in the prior Year, as well as net issuances of notes receivable for $754,000 compared to $44,000 of net issuances in the prior Year. The decrease in renovation fund contributions is due to the impact of COVID-19, as the Company temporarily halted collections from stores during the initial months of COVID-19.

Cash used in financing activities for the Period was $23.7 million compared to cash used of $3.0 million in 2019. The increase in cash used relates to lease payments, both principal and interest, as a result of the adoption of IFRS 16. This was slightly offset by the change in repayment of advances to related party. See “Adoption of IFRS 16”.

Certain bank covenants must be maintained by the Company and are related to the Partnership’s credit facility, all of which were met as of January 3, 2021 and December 29, 2019. The Company believes the bank covenants will continue to be met in 2021.

Based upon its current level of operations and anticipated growth, the Company believes that the cash generated from its operations will be adequate to pay the Partnership a 6% royalty on the Pizza Pizza Royalty Pool System Sales and a 9% royalty on the Pizza 73 Royalty Pool System Sales, plus meet its anticipated debt service requirements, its capital expenditure and working capital needs. The Company’s ability to continue to fund these items could be adversely affected by the occurrence of any of the events described in the Risks and Uncertainties section that follows herein and the matters described in PPRC’s Annual Information Form under the heading “Risk Factors”. The Company’s future operating performance and its ability to pay the Partnership a 6% royalty on the Pizza Pizza Royalty Pool System Sales, a 9% royalty on the Pizza 73 Royalty Pool System Sales and meet its anticipated debt service requirements will be subject to future economic conditions and to financial, business and other factors, many of which may be beyond its control. However, to offset the factors that are beyond its control, the Company has the ability to convert its current Class B and Class D Units into shares of PPRC and sell them to the public to generate cash proceeds

PIZZA PIZZA LIMITED AND PIZZA PIZZA ROYALTY CORP.

PPRC has licensed the Pizza Pizza Rights and Marks to the Company, for which the Company pays a 6% royalty on the system sales of those Pizza Pizza restaurants included in the specific listing of restaurants referred to as the “Royalty Pool” (as described under “Royalty Pool Adjustments”). There are 645 Pizza Pizza restaurants in the Royalty Pool for 2020 (2019 – 660).

In July 2007, the Partnership acquired the Pizza 73 trademarks and other intellectual property associated with Pizza 73 (together, “Pizza 73 Rights”). The Partnership licensed the Pizza 73 Rights to the Company

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PIZZA PIZZA LIMITED MANAGEMENT’S DISCUSSION AND ANALYSIS For the 14 week period from September 28, 2020 to January 3, 2021 and the 53-week period from December 30, 2019 to January 3, 2021

for a 9% royalty on system sales of the Pizza 73 restaurants included in the Royalty Pool (as described under “Royalty Pool Adjustments”). For 2020, there are 104 Pizza 73 restaurants in the Royalty Pool (2019 – 112).

As of January 3, 2021 the Company indirectly held an effective 23.5% interest in the Partnership (December 29, 2019 – 23.0%) by holding all Class B and Class D Units of the Partnership. The Company has the right to exchange one Class B or Class D Unit indirectly for that number of common shares of PPRC (“Shares”) equal to the Class B Exchange Multiplier or Class D Exchange Multiplier, respectively, applicable at the date of such exchange, as described under “Royalty Pool Adjustments”. The Class B and Class D Units are entitled to receive monthly distributions established by PPRC’s board of directors. A monthly distribution is paid to both the Company and PPRC on a pro rata ownership basis, with PPRC’s ownership held through its Class A and Class C limited partnership Units of the Partnership.

ROYALTY POOL ADJUSTMENTS

Annually, on January 1 (the “Adjustment Date”), an adjustment is made to the Royalty Pool to include the forecasted System Sales from new Pizza Pizza restaurants opened on or before December 31 of the prior year, less System Sales from any Pizza Pizza restaurants that have been permanently closed during the year. Once adjusted, the Royalty Pool remains fixed for the year, consequently, the number of stores in the Royalty Pool may vary from the number of stores actually open at any given time during the year. As the Royalty Pool does not reflect current year changes until the next Adjustment Date. The change in the amount of the Royalty due to the Partnership as a result of changes in the System Sales of the Royalty Pool will affect the Company’s retained interest through an adjustment to the rate at which the Class B units of the Partnership may ultimately be exchanged for Shares. On the Adjustment Date, the adjustment to the Class B Exchange Multiplier (as defined in the Pizza Pizza License and Royalty Agreement) involves first calculating the “Determined Amount”, which is defined as 92.5% of the royalty revenue added to the Royalty Pool, divided by the prevailing yield of the Shares. Beginning January 1, 2012, the Determined Amounts are multiplied by a number equal to (1-Tax%) where “Tax%” is an estimate of the Company’s effective tax rate for the year (determined using the total income taxes paid by the Company during the fiscal year divided by the total cash received by the Company during that fiscal year) (i.e., for the Adjustment Date of January 1, 2018, it will be the effective Company tax rate for the year ended December 31, 2017). This estimate of the effective tax rate will be subject to an adjustment when the actual effective entity level tax rate of the Company for the year is known. The Determined Amount is multiplied by 80%, then divided by the current market price of the Shares, and then further divided by the number of Class B units outstanding. This fraction is added to the Class B Exchange Multiplier from the preceding year, which was “one” on the closing of the Fund’s initial public offering. On the following Adjustment Date, a second adjustment to the Class B Exchange Multiplier will be made in the same manner once the System Sales for new restaurants are known with certainty. The adjustment for new restaurants rolled into the Royalty Pool is designed to be accretive for current shareholders.

In the case where system sales of the closed restaurants exceeded the additional system sales of the restaurants added to the Royalty Pool, the deficit (the “Make-Whole Carryover Amount”), will be paid by PPL to the Partnership in that year, and will be carried over and continue to be paid for subsequent years, until on an Adjustment Date, additional sales of new restaurants are sufficient to offset the system sales attributable to all closed restaurants. Additionally, per the Pizza Pizza License and Royalty Agreement and the Partnership’s Amended and Restated Limited Partnership Agreement (the “Partnership Agreement”) whenever the Determined Amount is negative it shall be deemed to be zero.

If, during a year, a Pizza Pizza restaurant is closed, the sales of the restaurant from the closing date would no longer be included in the calculation of the royalty payable to the Partnership by the Company. To compensate for this, in certain circumstances, the Pizza Pizza License and Royalty Agreement and the Partnership’s Amended and Restated Limited Partnership Agreement (the “Partnership Agreement”) provide that an amount (the “Make-Whole Payment”) reflecting the reduction in the royalty resulting from the restaurant closure will be paid by the Company to the Partnership for the balance of the year in which

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PIZZA PIZZA LIMITED MANAGEMENT’S DISCUSSION AND ANALYSIS For the 14 week period from September 28, 2020 to January 3, 2021 and the 53-week period from December 30, 2019 to January 3, 2021

the restaurant was closed, commencing from the closing date. The Make-Whole Payment will be the sales of the closed restaurant for the first 52-week period in which it was included in the Royalty Pool multiplied by the royalty rate, one twelfth of which is payable each month until the Adjustment Date.

Similarly, on the Adjustment Date, a separate adjustment is made to the Royalty Pool for the Pizza 73 restaurants. The Royalty Pool is increased to include the forecasted System Sales from new Pizza 73 restaurants opened on or before September 1 of the prior year, less System Sales from any Pizza 73 restaurants that have been permanently closed during the year. On the Adjustment Date, the adjustment to the Class D Exchange Multiplier is calculated in a similar manner as the Class B Exchange Multiplier described above.

RESTAURANTS ADDED TO THE ROYALTY POOL

2019 Royalty Pool Adjustment

In early January 2020 a second adjustment was made to the royalty payments and the Company’s Class B Exchange Multiplier based on the actual performance of the 18 new restaurants added to the Royalty Pool on January 1, 2019. As a result of the adjustments, the Class B Exchange Multiplier is 2.117969 and Class B Units can be exchanged for 5,312,373 shares effective January 1, 2019.

In early January 2020, a second adjustment was made to the royalty payments and the Company’s Class D Exchange Multiplier based on the actual performance of the seven Pizza 73 restaurants added to the Royalty Pool on January 1, 2019. As a result of the adjustments, the Class D Exchange Multiplier is 22.44976 and Class D Units can be exchanged for 2,244,975 shares effective January 1, 2019.

2020 Royalty Pool Adjustment – Class B Exchanged Multiplier

On January 1, 2020, 15 net Pizza Pizza restaurants were removed from the Royalty Pool as a result of 19 new restaurants opening and 34 closing from January 1, 2019 to December 31, 2019. The total number of Pizza Pizza restaurants in the Royalty Pool has decreased to 645. The additional system sales from the 19 new restaurants are estimated at $8,725,000 annually, less sales of $8,687,000 from 34 permanently closed Pizza Pizza restaurants, resulting in net estimated Pizza Pizza sales of $38,000 added to the Royalty Pool. The yield of the shares was determined to be 9.0% calculated using $9.54 as a weighted average share price. Weighted average share price is calculated based on the market price of the shares traded on the Toronto Stock Exchange during the period of twenty consecutive days ending on the fifth trading day before January 1, 2020. As a result of the contribution of the additional net sales to the Royalty Pool, the Class B Exchange Multiplier increased fractionally by 80% of the total adjustment or 0.000612; the new Class B Multiplier is 2.118582. This adjustment will also increase the entitlement of the holders of the Class B units to distributions of cash and allocations of income from the Partnership. The second adjustment to the Class B Exchange Multiplier was adjusted to be effective January 1, 2020, with the actual performance of the new restaurants determined in early 2021.

In early January 2021 a second adjustment was made to the royalty payments and the Class B Exchange Multiplier based on the actual performance of the 19 new restaurants added to the Royalty Pool on January 1, 2020. The final 2020 Pizza Pizza Royalty Pool adjustment resulted in a Make-Whole Payment being made on $781 of Royalty Pool sales. The Make-Whole Payment will continue to be paid for subsequent years, until on an Adjustment Date, additional system sales of additional restaurants are sufficient to offset the Pizza Pizza system sales attributable to all closed Pizza Pizza restaurants. As a result of the adjustments, the Class B Exchange Multiplier is unchanged at 2.118582 and Class B Units can be exchanged for 5,313,909 shares effective January 1, 2020.

2020 Royalty Pool Adjustment – Class D Exchange Multiplier

On January 1, 2020, eight net Pizza 73 restaurants were removed from the Royalty Pool as a result of one new restaurant opening between September 2, 2018 and September 1, 2019 and nine restaurants closing between January 1, 2019 and December 31, 2019. The forecasted additional system sales from the one new restaurant is estimated at $546,000 annually, less $1,186,000 in system sales attributable to the nine

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PIZZA PIZZA LIMITED MANAGEMENT’S DISCUSSION AND ANALYSIS For the 14 week period from September 28, 2020 to January 3, 2021 and the 53-week period from December 30, 2019 to January 3, 2021

closed Pizza 73 restaurants. As a result, a negative $640,000 net, estimated Pizza 73 sales were removed from the Royalty Pool. The net estimated sales were further reduced by $1,446,000 in system sales attributable to certain restaurants previously added to the Royalty Pool whose territory adjusted a previously existing restaurant. The total number of Pizza 73 restaurants in the Royalty Pool has decreased to 104.

Since the system sales of the closed Pizza 73 restaurants exceeded the additional system sales of the additional restaurant added to the Pizza 73 Royalty Pool, the sales of the closed restaurants for the first 52-week year in which it was included in the Royalty Pool, multiplied by the royalty rate (“Make-Whole Carryover Amount”), paid by the Company to PPRLP will be carried over, and continue to be paid for subsequent years, until on an Adjustment Date, additional system sales of additional restaurants are sufficient to offset the Pizza 73 system sales attributable to all closed Pizza 73 restaurants.

The yield of the shares was determined to be 9.0% calculated using $9.54 as a weighted average share price. Weighted average share price is calculated based on the market price of the shares traded on the Toronto Stock Exchange during the period of twenty consecutive days ending on the fifth trading day before January 1, 2020. As per the Pizza Pizza Royalty Limited Partnership agreement, whenever the Estimated Determined Amount is negative it shall be deemed to be zero. Accordingly, the Class D Exchange Multiplier remained unchanged at 22.44976. The second adjustment to the Class D Exchange Multiplier was adjusted to be effective January 1, 2020, with the actual performance of the new restaurant determined in early 2021.

In early January 2021, a second adjustment was made to the royalty payments and the Class D Exchange Multiplier based on the actual performance of the one Pizza 73 restaurant added to the Royalty Pool on January 1, 2020. The final 2020 Pizza 73 Royalty Pool adjustment resulted in a Make-Whole Payment being made on $692 of Royalty Pool sales. The Make-Whole Payment will continue to be paid for subsequent years, until on an Adjustment Date, additional system sales of additional restaurants are sufficient to offset the Pizza Pizza system sales attributable to all closed Pizza 73 restaurants. As a result of the adjustments, the Class D Exchange Multiplier is unchanged at 22.44976 and Class D Units can be exchanged for 2,244,975 shares effective January 1, 2020.

2021 Royalty Pool Adjustment – Class B Exchange Multiplier

On January 1, 2021, 23 net Pizza Pizza restaurants were removed from the Royalty Pool as a result of nine new restaurants opening and 32 closing from January 1, 2020 to December 31, 2020. The total number of Pizza Pizza restaurants in the Royalty Pool has decreased to 622. The additional system sales from the nine new restaurants are estimated at $4,056 annually, less sales of $18,572 from the 32 permanently closed Pizza Pizza restaurants. As a result, a negative $14,516 net, estimated Pizza Pizza sales were removed from the Royalty Pool.

Since the system sales of the closed Pizza Pizza restaurants exceeded the additional system sales of the additional restaurants added to the Pizza Pizza Royalty Pool, the Make-Whole Payment paid by the Company to the Partnership will be carried over, and continue to be paid for subsequent years, until on an Adjustment Date, additional system sales of additional restaurants are sufficient to offset the Pizza Pizza system sales attributable to all closed Pizza Pizza restaurants.

The yield of the shares was determined to be 7.3% calculated using $9.18 as a weighted average share price. Weighted average share price is calculated based on the market price of the shares traded on the Toronto Stock Exchange during the period of twenty consecutive days ending on the fifth trading day before January 1, 2021. As per the Pizza Pizza Royalty Limited Partnership agreement, whenever the Estimated Determined Amount is negative it shall be deemed to be zero. Accordingly, the Class B Exchange Multiplier remained unchanged at 2.118582. The second adjustment to the Class B Exchange Multiplier will be adjusted to be effective January 1, 2021, once the actual performance of the new restaurant is determined in early 2022.

2021 Royalty Pool Adjustment – Class D Exchange Multiplier

On January 1, 2021, one net Pizza 73 restaurant was removed from the Royalty Pool as a result of one new restaurant opening between September 2, 2019 and September 1, 2020 and two restaurants closing

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PIZZA PIZZA LIMITED MANAGEMENT’S DISCUSSION AND ANALYSIS For the 14 week period from September 28, 2020 to January 3, 2021 and the 53-week period from December 30, 2019 to January 3, 2021

between January 1, 2020 and December 31, 2020. The forecasted additional system sales from the one new restaurant is estimated at $520 annually, less $1,054 in system sales attributable to the two closed Pizza 73 restaurants. As a result, a negative $534 net, estimated Pizza 73 sales were removed from the Royalty Pool. The total number of Pizza 73 restaurants in the Royalty Pool has decreased to 103.

Since the system sales of the closed Pizza 73 restaurants exceeded the additional system sales of the additional restaurant added to the Pizza 73 Royalty Pool, the Make-Whole Payment paid by the Company to the Partnership will be carried over, and continue to be paid for subsequent years, until on an Adjustment Date, additional system sales of additional restaurants are sufficient to offset the Pizza 73 system sales attributable to all closed Pizza 73 restaurants.

The yield of the shares was determined to be 7.3% calculated using $9.18 as a weighted average share price. Weighted average share price is calculated based on the market price of the shares traded on the Toronto Stock Exchange during the period of twenty consecutive days ending on the fifth trading day before January 1, 2021. As per the Pizza Pizza Royalty Limited Partnership agreement, whenever the Estimated Determined Amount is negative it shall be deemed to be zero. Accordingly, the Class D Exchange Multiplier remained unchanged at 22.44976. The second adjustment to the Class D Exchange Multiplier will be adjusted to be effective January 1, 2021, once the actual performance of the new restaurant is determined in early 2022.

Pizza Pizza Royalty Corp. Outstanding Shares

The Company’s Class B and Class D equivalent Share entitlement is unchanged for 2021. In any year that the forecasted system sales (less closed restaurants sales and other adjustments) is negative, as was the case with the Class B and Class D equivalent Share entitlement calculation for 2021, no increase or decrease in the Exchange Multiplier is made. The Company will only have a Class D equivalent Share entitlement for 2021 if the actual sales performance of the new restaurants, less the sales of adjustment restaurants, significantly exceeds forecasted system sales and yields net, positive sales when the actual sales performance is known with certainty in early 2022.

After giving effect to the Company’s entitlement to additional equivalent Shares at January 1, 2021, the Company owns equivalent Shares representing 23.5% of the Company’s fully diluted shares.

The chart below shows the shares that would be outstanding if all of the Class B and Class D Units held by the Company were converted to PPRC shares after accounting for their respective multipliers and adjustments as described below, after the impact of the January 1, 2021 Adjustment Date.

Shares outstanding& issuable on January1,2021
Shares outstanding Class B equivalent Shares held by PPL at December 31, 2020 PPL additional Class B Equivalent Shares - True-up Holdback as at December 31, 2020 Additional PPL Class B equivalent Shares as of January 1, 2021 Class D equivalent Shares held by PPL at December 31, 2020 PPL additional Class D Equivalent Shares - True-up Holdback as at December 31, 2020 Additional PPL Class D equivalent Shares as of January 1, 2021 Number of fullydiluted shares	24,618,392 5,313,909 - - 5,313,909 2,244,975 - - 2,244,975
	32,177,276
	23.5%

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PIZZA PIZZA LIMITED MANAGEMENT’S DISCUSSION AND ANALYSIS For the 14 week period from September 28, 2020 to January 3, 2021 and the 53-week period from December 30, 2019 to January 3, 2021

OUTLOOK

The success of the Company depends primarily on the ability to maintain and increase restaurant sales. Increases in restaurant sales are derived from both the opening of new Pizza Pizza and Pizza 73 restaurants and increases in SSSG. SSSG is the key metric for shareholder yield growth.

New restaurant construction continues across Canada as government mandated restrictions on commercial construction have been lifted in all provinces. The Company expects to accelerate its restaurant network expansion to 5% traditional restaurant growth, and increased renovations in 2021.

Pizza Pizza and Pizza 73 System Sales have been negatively impacted as its restaurant operators have taken significant measures in their restaurants to protect the health of employees and consumers in compliance with social-distancing recommendations and requirements of applicable health authorities, including the closure of restaurant seating areas. Fortunately, traditional restaurants were allowed to remain open for delivery and takeout sales.

As mentioned earlier, Pizza Pizza and Pizza 73 operate traditional and non-traditional restaurants. The Royalty Pool sales mix includes delivery, pickup, walk-in and non-traditional sales. By brand, Pizza Pizza traditional restaurant sales have historically consisted of approximately 60% delivery and pickup sales and 40% walk-in sales, whereas Pizza 73 traditional restaurant sales have been approximately 90% delivery and pickup sales and 10% walk-in sales. Non-traditional restaurants typically account for nearly 10% of Royalty Pool system sales.

The significant decline in walk-in sales encountered since March 2020 has been partially offset by increased delivery and pickup sales; however, the non-traditional sales portion of the sales mix decreased almost entirely and is not expected to return until sports arenas and entertainment venues reopen.

The negative financial impact of COVID-19 has continued into the first quarter of 2021. Based on the experience of other restaurant brands within and outside of Canada, the Company believes that the food service industry, and more particularly the quick service restaurant (QSR) segment of the industry, will recover from the impact of COVID-19. However, the timing and strength of the recovery cannot be predicted with any degree of certainty.

The Company continues working closely with its franchisees, partners, suppliers and landlords to support the ongoing operation of our traditional locations through these unprecedented market conditions. Pizza Pizza and Pizza 73 delivery sales remain stable and the Company is actively taking measures with its marketing, operations and technology teams to drive increased delivery and pickup business. The Company provides contactless delivery and introduced its tamper-proof pizza box during the second quarter. Customers also now have the option to order, pay and even tip their driver online through websites or apps. This offers customers the added peace of mind that our pizzas leave 500 degree ovens and are placed immediately into a secure box which will be delivered as per their instructions without any direct human contact.

As Canada’s #1 pizzeria, the Company leverages its market-leading positions by staying top-of-mind with consumers. The Company believes its leading market share is the result of providing a variety of highquality menu offerings, introducing new products and investing heavily in technological innovation.

TRANSACTIONS WITH RELATED PARTIES

The Company has entered into related party transactions with companies under common control. These transactions are entered into in the normal course of business and are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties. Significant related party transactions include rent expense, distributions on Class B and Class D Partnership Units,

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PIZZA PIZZA LIMITED MANAGEMENT’S DISCUSSION AND ANALYSIS For the 14 week period from September 28, 2020 to January 3, 2021 and the 53-week period from December 30, 2019 to January 3, 2021

management fees and food purchases as disclosed in note 23 of the Financial Statements of the Company. The Company does not have any outstanding commitments related to transactions with related parties, other than those disclosed in note 23 of the Financial Statements of the Company.

Distributions payable and advances to or from related parties and receipt of or repayments of advances from related parties are summarized in note 23 of the Financial Statements of the Company. Advances from related party are due to the parent company. Advances to/from related party and receivables from jointly-controlled companies are non-interest bearing, have no specified terms of repayment and are unsecured.

CRITICAL ACCOUNTING POLICIES

The preparation of the Financial Statements of Pizza Pizza requires management to make judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures of contingent assets and liabilities, such as revenue recognition, long-lived and intangible assets and income taxes. The Company believes that its most critical accounting policies are:

Consolidation - Determining which entities are to be consolidated by the Company requires judgment on the definition of control. The definition of control under IFRS 10, Consolidated Financial Statements (“IFRS 10”), states that an investor controls an investee when it has power over the investee, is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Based on an assessment of the activities of the Partnership and the franchisees, it was concluded that the Company does not control these entities, and therefore shall not consolidate their operations. The Partnership is consolidated by PPRC, formerly Pizza Pizza Royalty Income Fund.

Investment in associate - An associate is an entity over which the Company has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee, but is not control or joint control over those policies.

The Company accounts for its 23.5% (December 29, 2019 – 23.0%) share interest in the Partnership as an investment in an associate and applies equity accounting whereby the Company’s investment is increased by its 23.5% share of income for the period of the Partnership and reduced for distributions received during the Partnership’s fiscal period. The Partnership’s financial and fiscal periods differ from the Company’s, as the Partnership operates on a calendar year-end.

Investments in joint ventures - A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint venture. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.

The Company accounts for its 50% (December 29, 2019 – 50%) share interest in the 79 jointly-controlled companies as an investment in a joint venture and applies the equity accounting whereby the Company’s investment is increased by its 50% share of income for the period of the joint ventures and reduced for distributions received during the joint ventures’ fiscal period. The jointly-controlled companies’ financial and fiscal periods differ from the Company’s, as the joint ventures have a floating year-end of the Saturday immediately preceding July 31.

Identification of CGUs - For the purposes of identifying CGUs, assets are grouped at the lowest levels for which there are separately identifiable cash flows. The Company concludes there are interdependencies of cash flows between Pizza 73 restaurants and the Company and therefore, the investment in jointlycontrolled Pizza 73 restaurants is considered a single CGU. The Company’s assets pertaining to Pizza Pizza operations are classified as a separate CGU group.

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PIZZA PIZZA LIMITED MANAGEMENT’S DISCUSSION AND ANALYSIS For the 14 week period from September 28, 2020 to January 3, 2021 and the 53-week period from December 30, 2019 to January 3, 2021

Adoption of IFRS 16 - The Company has adopted IFRS 16 with a date of initial application of December 30, 2019, using a modified retrospective approach. Under the modified retrospective approach, comparative information has not been restated and continues to be reported under IAS 17, Leases. The adoption of this standard replaces the dual model for lessee accounting which classified leases as either finance or operating with a single accounting model which requires a lessee to recognize assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. A lessee is required to recognize a right-of-use asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments. Under IFRS 16, lessor accounting for operating and finance leases has remained substantially unchanged. The Company determines lease existence and classification at the lease inception date. Leases are identified when an agreement conveys the right to control the identified property for a period of time in exchange for consideration.

The Company recognizes a right-of-use asset and a lease liability at the lease commencement date, which is the possession date of the asset. The right-of-use asset is initially measured based on the initial measurement of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred, less any lease incentives received, and excludes all sales taxes. Right-of-use assets are depreciated to the earlier of the end of the useful life of the asset or the lease term using the straight-line method. The lease term may include periods associated with options to extend or exclude periods associated with options to terminate the lease when it is reasonably certain that management will exercise these options. Additionally, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurement of the lease liability.

The lease liability is initially measured at the present value of the lease payments over the lease term. The lease payments are discounted using the interest rate implicit in the lease; if that cannot be readily determined, The Company uses its incremental borrowing rate. The incremental borrowing rate is the rate that the lessee would have to pay to borrow the funds necessary to obtain an asset of similar value, in a similar economic environment, and with similar terms and conditions. Generally, the Company uses its incremental borrowing rate as the discount rate. The lease liability is measured at amortized cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Company’s estimate of the amount expected to be payable under a residual value guarantee, or if the Company changes its assessment of whether it will exercise a purchase, extension or termination option.

The Company has elected not to recognize right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low-value assets. The Company recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

Where the Company acts as an intermediate lessor, it classifies a sublease as a finance lease by reference to the right-of-use asset arising from the head lease. If the applicable criteria of transferring the majority of risks and rewards to the sublessee is met, the Company derecognizes the right-of-use asset relating to the head lease that it transfers to the sublessee, recognizes a corresponding lease receivable, and the lease liability relating to the head lease is retained. For the leases where the majority of risks and rewards to the sublessee is not met, the Company will retain the right-of-use asset relating to the asset and recognize revenue on the rental income. Similar to right-of-use assets, the lease receivable is periodically reduced by impairment losses, if any, and adjusted for certain lease renewals or modifications.

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PIZZA PIZZA LIMITED MANAGEMENT’S DISCUSSION AND ANALYSIS For the 14 week period from September 28, 2020 to January 3, 2021 and the 53-week period from December 30, 2019 to January 3, 2021

On adoption, the standard had a material impact on the Company’s consolidated balance sheet, but did not have a significant impact on its consolidated statement of income. The impact of the adoption as at December 30, 2019 was as follows:

December 30, 2019 was as follows:
	Balance as of	Impact of IFRS 16
	December 29,	Adoption(1)	Balance as of
(in thousands of dollars)	2019		December 30,2019
Assets
Lease receivable	-	21,548	21,548
Trade, other receivables and prepayments	19,877	(142)	19,735
Right-of-use asset	-	71,269	71,269
Liabilities
Lease liability	-	95,455	95,455
Trade and other payables	43,521	(1,050)	42,471
Provision foronerouslease	1,729	(1,729)	-
Shareholders’ Deficiency	(100,790)	-	(100,790)

1 The impact of adoption as at December 30, 2019 was restated relative to prior quarter reporting

Lease receivables are reviewed for impairment based on expected losses at each balance sheet date in accordance with IFRS 9 – Financial instruments. An impairment loss is recorded when the credit risk is assessed to have increased for the lease receivables. For the Quarter and Year, the Company recorded an expected credit loss provision loss of $49,000 and $759,000, respectively, on long-term lease receivables (2019 - $nil and $nil). See “Loss on Impairment of Lease Receivables”.

CRITICAL ACCOUNTING ESTIMATES

The preparation of the Financial Statements of Pizza Pizza requires management to make judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures of contingent assets and liabilities. On an ongoing basis, management evaluates its estimates, including those related to basis of consolidation, revenue recognition, long-lived and intangible assets and income taxes. The Company bases its estimates on historical experience and on various other assumptions that the Company believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from those estimates. Changes in its estimates could materially impact the Company’s results of operations and financial condition for any particular period. The Company believes that its most critical accounting estimates are:

Impairment of investment in Pizza Pizza Royalty Limited Partnership

The Company, at each period-end, identifies impairment indicators and assesses whether there is any objective evidence that its interest in the Partnership is impaired. If impaired, the carrying value of the Company’s share of the underlying assets of the Partnership is written down to its estimated recoverable amount, being the higher of fair value less cost to sell and value in use, and the write-down is charged to the consolidated statements of income.

The value-in-use calculation requires the Company to estimate the future cash flows expected to arise from the Partnership and a suitable discount rate in order to calculate present value. In measuring future cash flows, the Company makes assumptions about future sales and terminal growth rates which are based on historical experience and expected future performance. Determining the applicable discount rate also involves estimating appropriate adjustments to market risk and the Company’s specific risk factors. The two most sensitive assumptions are pre-tax discount rates and terminal growth rates.

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PIZZA PIZZA LIMITED MANAGEMENT’S DISCUSSION AND ANALYSIS For the 14 week period from September 28, 2020 to January 3, 2021 and the 53-week period from December 30, 2019 to January 3, 2021

best estimates at a specific point in time which are subject to estimation uncertainty. As a result of this test, it was determined that there was no impairment.

Impairment of investment in jointly-controlled companies

The Company, at each period-end, identifies impairment indicators and assesses whether there is any objective evidence that its interest in the joint ventures is impaired. If impaired, the carrying value of the Company’s share of the underlying assets of the joint ventures is written down to its estimated recoverable amount, being the higher of fair value less cost to sell and value in use, and charged to the consolidated statements of income.

The value-in-use calculation requires the Company to estimate the future cash flows expected to arise from the CGU and a suitable discount rate in order to calculate present value. In measuring future cash flows, the Company makes assumptions about future sales, tax rates, and terminal growth rates that were based on historical experience and expected future performance. Determining the applicable discount rate also involves estimating appropriate adjustments to market risk and the Company’s specific risk factors. The two most sensitive assumptions used are pre-tax discount rates and terminal growth rates.

The impact that COVID-19 has had on performance of restaurants was considered to be an impairment trigger. The Company, therefore, performed an impairment test as at January 3, 2021 using management’s best estimates at a specific point in time which are subject to estimation uncertainty. As a result of this test, it was determined that there was no impairment.

Impairment of non-trade assets

The Company, at each period-end, identifies impairment indicators and assesses whether there is any objective evidence that its non-trade assets are impaired. If impaired, the carrying value of these assets is written down to its estimated recoverable amount, and charged to the consolidated statements of income.

The Company’s franchisees, where qualified, have continued to apply for and receive financial assistance from the Government of Canada’s COVID-19 Economic Response Plan, including the Canadian Emergency Wage Subsidy (“CEWS”) and Canada Emergency Business Account (“CEBA”). The financial assistance has been, and will continue to, improve the liquidity of franchisees and thus allow the Company to continue to collect on its non-trade assets. In the interim, and until more funding has been received, the Company has temporarily extended repayment terms of its franchisees, and therefore has not taken any additional impairment on the non-trade assets. See “COVID-19 Impact on Company’s Business”.

RISKS & UNCERTAINTIES

The performance of the Company is primarily dependent upon its ability to maintain and increase system sales at the Pizza Pizza and Pizza 73 restaurants, add new profitable restaurants to the network and attract qualified restaurant operators. Sales are subject to a number of factors that affect the restaurant industry generally and the quick service segment of this industry, in particular, which is highly competitive with respect to price, service, location and food quality. In addition, factors such as the availability of experienced management and hourly employees may also adversely affect the system sales. Competitors include national and regional chains, as well as independently-owned restaurants, third party food delivery services, home meal delivery companies and retailers of frozen pizza. If the Company and the Pizza Pizza and Pizza 73 restaurants are unable to successfully compete in the quick service sector, system sales may be adversely affected. Changes in demographic trends, traffic patterns and the type, number and location of competing restaurants also affect the restaurant industry. In addition, factors such as government regulations, risk of technology failures, inflation, publicity from any food-borne illnesses and increased food, labour and benefits costs may adversely affect the restaurant industry in general and therefore, potentially, system sales. The Company’s success also depends on numerous factors affecting discretionary spending, including economic conditions, disposable consumer income and consumer confidence. Adverse changes in these factors could reduce guest traffic or impose practical limits on pricing, either of which could reduce

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PIZZA PIZZA LIMITED MANAGEMENT’S DISCUSSION AND ANALYSIS For the 14 week period from September 28, 2020 to January 3, 2021 and the 53-week period from December 30, 2019 to January 3, 2021

revenue and operating income, which could adversely affect system sales and the ability of the Company to pay the royalty to the Partnership.

For a more detailed list of risks and uncertainties please refer to the PPRC’s Annual Information Form which is available on the investor relations section of the website www.pizzapizza.ca or on the SEDAR website for Canadian regulatory filings at www.sedar.com.

COVID-19

The COVID-19 pandemic has had and is continuing to have negative impacts on the Canadian economy, the QSR segment of the restaurant industry, the ability and willingness of the general public to dine outside the home and travel, consumer spending on restaurants and other discretionary expenses and the level of consumer confidence in the safety of QSR restaurants including Pizza Pizza and Pizza 73 restaurants, all of which are negatively impacting the Company, its Franchisees and restaurant operators, PPRC and the Partnership, including their respective businesses, results of operations and financial condition. These and other COVID-19 related impacts may negatively affect their ability to obtain additional equity or debt financing, or re-finance existing debt, or make interest and principal payments to their respective lenders, make lease payments and otherwise satisfy their respective financial obligations as they become due, and may cause any of the Company, its Franchisees and restaurant operators, PPRC and the Partnership to be in non-compliance with one or more of the financial covenants under their respective existing credit facilities and cause a default thereunder. Modifications to the operations of restaurants in the Royalty Pool in response to COVID-19 as well as temporary or permanent restaurant closures have resulted, and are expected to continue to result in, material declines to System Sales of restaurants in the Royalty Pool relative to past performance. These declines will result in significant reductions to the amount of fees and other revenues received by the Company from its Franchisees and restaurant operators and the amount of royalties payable to and earned by the Partnership, and correspondingly, funds available to be paid as distributions by the Partnership to the Company and PPRC. The Company may, at its discretion, become liable for the loan obligations of certain of its Franchisees and restaurant operators, if such Franchisees and restaurant operators default on their loans as a result of the impacts of COVID-19 or otherwise; such obligations may be significant and the Company may be unsuccessful in seeking recovery from such franchisees and restaurant operators, all of which may adversely affect the Company’s business, results of operations and financial condition. The timing and pace of recovery for the Canadian economy generally, and for the restaurants’ business, as the impacts of the COVID-19 pandemic moderate (whether as a result of vaccination programs or other developments) cannot be accurately predicted and may be slow; as a results, there is significant uncertainty as to when many non-traditional restaurants will be able to reopen, when sales will return to pre-pandemic levels, and whether opportunities for further growth of the restaurant network can be profitably undertaken. Further government restrictions related to COVID-19 may be imposed, which could restrict the ability of restaurants to operate, or result in forced closures, further reduced guest traffic, supply interruptions or staff shortages. Government programs expected to be helpful to Franchisees and restaurant operators may not be available to some Franchisees and restaurant operators or to the extent required to mitigate financial impacts resulting from the COVID-19 pandemic.

FORWARD-LOOKING STATEMENTS

Certain statements in this report, including those concerning the Company’s ability to meet covenants and other financial obligations, and the potential business and financial impacts of the COVID-19 pandemic on the Company’s plans and strategies described under “Outlook”, may constitute “forward-looking” statements which involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. When used in this report, such statements include such words as “may”, “will”, “expect”, “believe”, “plan”, and other similar terminology in conjunction with a discussion of future events or operating or financial performance. These statements reflect management’s current expectations regarding future events and operating and financial performance and speak only as of the date of this MD&A. These forward-looking statements involve a number of risks and

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PIZZA PIZZA LIMITED MANAGEMENT’S DISCUSSION AND ANALYSIS For the 14 week period from September 28, 2020 to January 3, 2021 and the 53-week period from December 30, 2019 to January 3, 2021

uncertainties. The following are some factors that could cause actual results to differ materially from those expressed in or underlying such forward-looking statements: changes in national and local business and economic conditions including those resulting from the COVID-19 pandemic (such as restrictions on restaurant operations, customers’ ability and willingness to visit restaurants and their perception of health and food safety issues, discretionary spending patterns and supply chain limitations, and the related financial impact on the Company and its franchisees and restaurant operators and their ability to meet debt and lease obligations), competition, changes in demographic trends, changing consumer preferences and discretionary spending patterns, changes in national and local business and economic conditions, legislation and governmental regulation, accounting policies and practices, and the results of operations and financial condition of the Company. The foregoing list of factors is not exhaustive and should be considered in conjunction with the other risks and uncertainties described in PPRC’s Annual Information Form. The Company assumes no obligation to update these forward looking statements, except as required by applicable securities laws.

ADDITIONAL INFORMATION

Other information about the Company and PPRC, including the Annual Information Form, can be accessed on the investor relations section of the website www.pizzapizza.ca or on the SEDAR website for Canadian regulatory filings at www.sedar.com.

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AI assistant

Pizza Pizza Royalty Corp. — Management Reports 2021

47103_rns_2021-03-02_260b8b7b-195c-4cf8-aba0-f367abc2b5c7.pdf

Pizza Pizza Limited Management’s Discussion and Analysis

OVERVIEW

About the Pizza Pizza Brand

About the Pizza 73 Brand

Background

SELECTED FINANCIAL DATA

Consolidated Financial Data and Adjusted EBITDA[(1)] Calculation

COVID-19 IMPACT

RESULTS OF OPERATIONS

System Sales

Same Store Sales Growth

New Restaurant Development

Revenues

Cost of Food Sales

General and Administrative (“G&A”) Expenses

Royalty Payments

Loss on Impairment of Lease Receivables

Equity income from Pizza Pizza Royalty Limited Partnership

Equity income from Jointly-controlled companies

Deferred tax recovery/expense

Net income (loss)

Shareholders’ Deficiency

SUMMARY OF QUARTERLY RESULTS

LIQUIDITY & CAPITAL RESOURCES

PIZZA PIZZA LIMITED AND PIZZA PIZZA ROYALTY CORP.

ROYALTY POOL ADJUSTMENTS

RESTAURANTS ADDED TO THE ROYALTY POOL

2019 Royalty Pool Adjustment

2020 Royalty Pool Adjustment – Class B Exchanged Multiplier

2020 Royalty Pool Adjustment – Class D Exchange Multiplier

2021 Royalty Pool Adjustment – Class B Exchange Multiplier

2021 Royalty Pool Adjustment – Class D Exchange Multiplier

Pizza Pizza Royalty Corp. Outstanding Shares

OUTLOOK

TRANSACTIONS WITH RELATED PARTIES

CRITICAL ACCOUNTING POLICIES

CRITICAL ACCOUNTING ESTIMATES

Impairment of investment in Pizza Pizza Royalty Limited Partnership

Impairment of investment in jointly-controlled companies

Impairment of non-trade assets

RISKS & UNCERTAINTIES

COVID-19

FORWARD-LOOKING STATEMENTS

ADDITIONAL INFORMATION

More from Pizza Pizza Royalty Corp.

Pizza Pizza Royalty Corp. Management Reports 2021