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Prior to the completion of the Transaction, Food Services owned (i) 9.4% of the outstanding units of the Fund on a fully-diluted basis through its ownership of limited voting units, with the remaining units of the Fund being owned by the public and (ii) 21.9% of the issued and outstanding common shares of A&W Trade Marks Inc. ("Trade Marks), which were exchangeable for units of the Fund, with the remaining common shares being owned by the Fund. Prior to completion of the Transaction the A&W Trademarks were owned by A&W Trade Marks Limited Partnership (the "Partnership"), a subsidiary of Trade Marks and Food Services paid the Partnership a royalty for use of the A&W Trademarks.

The Transaction also involved the amalgamation of a predecessor of Food Services with the following holding companies that directly or indirectly owned shares of such predecessor entity prior to the Transaction, some of which were created solely to facilitate the amalgamation and in preparation for the acquisition of the Fund's units: Buddy Holdings Inc., A&W of Canada Inc. ("A&W Canada"), AWFS Holdings Inc., A&W Holdings I Inc. and A&W Holdings II Inc.

Following the completion of the Transaction, the units of the Fund were de-listed from the Toronto Stock Exchange ("TSX") and the common shares of Food Services were listed on the TSX under the symbol AW.TO, and such common shares began trading on the TSX on October 18, 2024.

For further information regarding the Transaction and its impact on our financial results, as compared to 2023, please refer to Food Services' most recently filed management discussion and analysis ("MD&A") which is available on Food Services' SEDAR+ profile at www.sedarplus.ca and the Fund's management information circular dated August 29, 2024, which is available on the Fund's SEDAR+ profile at www.sedarplus.ca.

Q4 2024 Financial Highlights

• System Sales⁽ⁱ⁾ of $576.8 million were consistent with Q4 2023

• Revenue decreased by $9.7 million (9%) as compared to Q4 2023

• Income before income taxes increased by $8.7 million (72%) as compared to Q4 2023

• Adjusted EBITDA⁽ⁱ⁾ increased by $0.2 million (1%) as compared to Q4 2023, to $27.9 million

• Operating costs decreased by $11.7 million (19%) as compared to Q4 2023

• General and administrative expenses decreased by $1.7 million (10%) as compared to Q4 2023

• Opened 9 new A&W restaurants

Fiscal 2024 Financial Highlights

• System Sales⁽ⁱ⁾ of $1.87 billion – an all time high for A&W – up from $1.85 billion for Fiscal 2023

• Revenue decreased by $7.0 million (2%) as compared to Fiscal 2023

• Income before income taxes increased by $2.9 million (6%) as compared to Fiscal 2023

• Adjusted EBITDA⁽ⁱ⁾ increased by $1.2 million (1%) as compared to Fiscal 2023, to $93.5 million

• Operating costs decreased by $6.9 million (4%) as compared to Fiscal 2023

• General administrative expenses increased by $1.5 million (3%) as compared to Fiscal 2023

• Opened 28 new A&W restaurants and first stand-alone Pret restaurant

FOURTH QUARTER 2024 RESULTS

Income before income taxes increased by $8.7 million in Q4 2024, as compared to Q4 2023, largely as a result of the cessation of the royalty expense following the completion of the Transaction and secondarily by reductions in operating costs and general and administrative expenses, partially offset by a reduction in revenue.

The decrease in total revenue is primarily attributable to franchising revenue which decreased by $9,688,000 quarter over quarter due to lower equipment sales which reflects our strategic focus on reducing the cost of modernizations for our franchisees and the adoption of an overall capital light strategy for our franchisees that began in the fall of 2023. All other revenue streams, including revenue from corporate restaurants, service fees, sales of food and supplies, contributions to the National Adverting Fund, initial franchise and renewal fees, were relatively flat quarter over quarter.

System Sales⁽ⁱ⁾ for Q4 2024 of $576.8 million were consistent with System Sales⁽ⁱ⁾ for Q4 2023 of $577.6 million.

Same Store Sales Growth is a function of changes in guest counts and check size, which are impacted by party size, menu prices and menu mix and changes in consumers discretionary spending. The Same Store Sales Growth⁽ⁱ⁾ of -1.9% for Q4 2024 is a product of a decrease in guest counts partially offset by an increase in average check size due in part to industry-wide inflation on goods, services, and labour. The decrease in guest counts reflects A&W's proportionate share of an overall decline in traffic at burger quick service restaurants across Canada. Food Services believes the decline in traffic at A&W restaurants and burger QSRs more generally is attributable to increased interest rates and inflation, along with market uncertainty, which have impacted consumer discretionary spending. In response to these economic conditions and the intense price competition in the QSR industry, Food Services continues to seek new and innovative ways to offer A&W's guests a delicious and affordable experience and in turn increase guest traffic.

Food Services reported a net loss of $1.1 million in Q4 2024 compared to net income of $9.9 million in Q4 2023. The net loss in Q4 2024 is not comparable to the net income in Q4 2023 due to the impact of the Transaction on the Q4 2024 results, particularly a non-cash, non-recurring deferred tax expense of $16.9 million that was recorded upon completion of the Transaction.

Food Services reported a net loss per share of $0.13 in Q4 2024 versus net income per share of $0.67 in Q4 2023 due to the decrease in net income (loss), which is largely due to the impact of the non-cash, non-recurring deferred tax expense recorded upon completion of the Transaction discussed above, and the increase in the weighted average number of shares outstanding from 9,495,363 in Q4 2023 to 19,077,318 in Q4 2024. In order to ensure comparability of net income per share, the number of shares used to calculate the net income per share up to October 17, 2024 (the date of the Transaction), has been adjusted to reflect the equivalent number of common shares of Food Services that were outstanding after the reorganization steps were undertaken, excluding the common shares issued to the outside party holding a non-controlling interest in Food Services prior to the completion of the Transaction and those issued to Unitholders as consideration for the Transaction which were incorporated into the weighted average number of shares from the date of the Transaction onwards.

Adjusted EBITDA⁽ⁱ⁾ increased by $0.2 million, as compared to Q4 2023, to $27.9 million for Q4 2024. The increase in Adjusted EBITDA is primarily attributable to the decrease in operating costs and general and administration expenses, partially offset by the decrease in revenue discussed above.

Full quarterly results are available on Food Services' SEDAR+ profile at www.sedarplus.ca.

FISCAL 2024 RESULTS

Income before income taxes increased by $2.9 million in Fiscal 2024, as compared to Fiscal 2023, largely as a result of the cessation of the royalty expense following the completion of the Transaction  and secondarily by reductions in operating costs and general and administrative expenses, partially offset by a reduction in revenue.

The decrease in total revenue was driven by the decrease in franchising revenue which decreased by $8.5 million year over year largely due to lower equipment sales which reflects a focus on reducing the cost of modernizations and the adoption of an overall capital light strategy for our franchisees beginning in fall of 2023. The decrease in franchising revenue was partially offset by a $1.5 million increase in revenue from corporate restaurants due to an improvement in sales at the corporately owned A&W restaurants located in shopping centres and on urban street fronts, and the addition of sales from the first standalone Pret restaurant which opened in Q1 2024.

System Sales⁽ⁱ⁾ for Fiscal 2024 of $1.87 billion were up 0.8% from Fiscal 2023 System Sales⁽ⁱ⁾ of $1.85 billion. The increase in System Sales and System Sales Growth is primarily generated from the additional sales arising on the net new restaurants opened over the last two years offset by slightly negative Same Store Sales Growth over the prior year. Franchising revenue from service fees, contributions to the National Advertising Fund and revenue generated from the distribution of food and supplies fluctuate with the movement in System Sales and as such have increased proportionally year over year, partially offsetting the decrease in revenue from equipment sales to existing restaurants.

The Same Store Sales Growth⁽ⁱ⁾ of -0.6% for Fiscal 2024 is a product of a decrease in guest counts, due to the overall decline in traffic at burger QSRs across Canada, partially offset by an increase in average check size due in part to industry-wide inflation on goods, services, and labour.

Net income for Fiscal 2024 was $21.7 million compared to net income of $38.0 million in Fiscal 2023. The net income in Fiscal 2024 is not comparable to the net income in Fiscal 2023 due to the impact of the Transaction on the Fiscal 2024 results, particularly the non-cash, non-recurring deferred tax expense of $16.9 million that was recognized upon completion of the Transaction.

Net income per share for Fiscal 2024 was $0.95 versus net income per share of $2.54 in Fiscal 2023 due to the decrease in net income, which is largely due to the impact of the non-cash, non-recurring deferred tax expense that was recognized upon completion of the Transaction, and the increase in the weighted average number of shares outstanding from 9,495,363 in Fiscal 2023 to 12,443,657 in Fiscal 2024 due to the Transaction.

Adjusted EBITDA⁽ⁱ⁾ for Fiscal 2024 increased by $1.2 million, as compared to Fiscal 2023, to $93.5 million for Fiscal 2024. The increase in Adjusted EBITDA is primarily attributable to the decrease in operating costs and general and administration expenses, partially offset by a decrease in revenue.

Full annual results are available on Food Services' SEDAR+ profile at www.sedarplus.ca.

Net Annual Restaurant Unit Growth

We increased the pace and number of A&W restaurant openings to 28 in Fiscal 2024, an improvement over the previous fiscal year opening of 19 restaurants.  Whereas in 2023 we closed 11 restaurants, we closed only 9 in 2024 leading to a net restaurant count increase in 2024 of 19 versus the prior year net increase in restaurants of 8.

This means that Net Annual Restaurant Unit Growth was 1.8% in 2024 compared to 0.8% in 2023 which results from an increasing pace of restaurant openings and stabilizing construction timelines following the multi year slow down in real estate transactions and construction timelines following the Covid-19 pandemic which brought about a significant slowdown in the construction and real estate industries.

QUARTERLY CASH DIVIDEND

A&W announced today that its Board of Directors has declared a quarterly dividend of $0.480 per share. The dividend will be payable in cash on March 28, 2025 to holders of common shares of record on March 14, 2025. The dividend will be taxed as an eligible dividend.

CONFERENCE CALL

A&W will hold a conference call to discuss its Q4 2024 and Fiscal 2024 results on Wednesday, March 12, 2025 at 1:00 p.m. Pacific Time (4:00 p.m. Eastern Time).

The call will be webcast live and may be accessed at https://events.q4inc.com/attendee/779331911. Participants who wish to ask questions or are unable to join via webcast may dial-in by calling toll-free 1-800-549-8228 and by quoting the conference ID "60558" when prompted by the operator. For those unable to participate in the live call, a replay will be made available for one year at https://events.q4inc.com/attendee/779331911.

NON-IFRS MEASURES

This news release makes references to certain non-IFRS measures. These measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management's perspective.  Food Services believes that disclosing these non-IFRS measures provides readers of this news release with important information regarding Food Services' financial performance. By considering these measures in combination with IFRS measures, Food Services believes that readers are provided with additional and more useful information about Food Services than readers would have if they simply considered IFRS measures alone. We use non-IFRS financial measures including "System Sales", "EBITDA", and "Adjusted EBITDA"; the non-IFRS ratio of "System Sales Growth" and non-IFRS supplementary financial measures such as "Same Store Sales Growth".

These non-IFRS measures, ratios and supplementary financial measures are used to provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS measures. We believe that securities analysts, investors and other interested parties frequently use non-IFRS measures and industry metrics in the evaluation of issuers. A&W's management also uses non-IFRS measures and industry metrics to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and forecasts and to determine components of management compensation. The non-IFRS measures reported by Food Services do not have a standardized meaning prescribed by IFRS and Food Services' method of calculating these measures may differ from those of other issuers or companies and may not be comparable to similar measures used by other issuers or companies.  Accordingly, these measures should not be considered in isolation or as a substitute for analysis of our financial information reported under IFRS.

Certain information, including definitions, about non-IFRS financial measures, non-IFRS ratios, and supplementary financial measures is found in the Fiscal 2024 MD&A and is incorporated by reference. This information is found in the sections entitled "How We Assess the Performance of our Business", "Non-IFRS Measures" and "Selected Financial Information" of the Fiscal 2024 MD&A which is available on Food Services' SEDAR+ profile at www.sedarplus.ca. Reconciliations for each non-IFRS financial measure can be found below.

(in thousands of Canadian Dollars)

FORWARD-LOOKING INFORMATION

Certain statements in this news release contain forward-looking information within the meaning of applicable securities laws in Canada. The words "anticipates", "believes", "budgets", "could", "estimates", "expects", "forecasts", "intends", "may", "might", "plans", "projects", "schedule", "should", "will", "would", "outlook" and similar expressions are often intended to identify forward-looking information, although not all forward-looking information contains these identifying words.

The forward-looking information in this news release includes, but is not limited to: plans to bring more efficiency and guest experience enhancements to life at A&W restaurants and for A&W franchisees; the A&W brand and financial position being strong, and A&W's ability to respond to the changing consumer environment in the year ahead; Food Services' objectives with respect to the A&W restaurants and its planned strategies to achieve those objectives; expectations relating to the timing and completion of the rollout of a redesigned restaurant operating system in 2025; and expectations relating to the timing and amount of the cash dividend payment.

The forward-looking information is based on assumptions that management considered reasonable at the time it was prepared, which assumptions include, but are not limited to:

• there are no changes in availability of experienced management and hourly employees;

• there are no material changes in government regulations concerning menu labelling and disclosure and drive-thru restrictions;

• no publicity from any food borne illness;

• no material changes in competition;

• no material impact to supply chain availability, cost of inputs or franchisee ability to operate because of the actual or threatened tariffs;

• no material impact to consumer discretionary spending because of actual or threatened tariffs;

• no material increases in food and labour costs;

• the continued availability of quality raw materials;

• continued additional franchise sales and maintenance of franchise operations;

• A&W is able to maintain and grow the current system of franchises;

• Suncor being able to execute their development plan to open new A&W restaurants in their Petro-Canada retail locations;

• A&W is able to locate new retail sites in desirable locations;

• A&W is able to obtain qualified operators to become A&W or Pret franchisees;

• existing franchisees are able to successfully operate and grow their businesses and maintain profitability;

• no material impact from new or increased sales taxes upon gross sales;

• continued ability to preserve intellectual property;

• no material litigation from suppliers, franchisees, key partners or guests at A&W or Pret restaurants;

• Food Services can continue to comply with its obligations under its credit arrangements;

• the projections for the A&W business provided by management are accurate; and

• A&W will be successful in executing on its business strategies and such strategies will achieve their intended results.

Inherent in forward-looking information are risks and uncertainties beyond management's or Food Services' ability to predict or control that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. The forward-looking information in this news release is subject to risks, uncertainties and other factors including, among others, the risks identified in Food Services' Fiscal 2024 MD&A and Food Services' annual information form for the period ended December 29, 2024, ("AIF") under the heading "Risk Factors".  The Fiscal 2024 MD&A and AIF are both available on Food Services' SEDAR+ profile at www.sedarplus.ca. Additional risks and uncertainties not currently known to Food Services or that are currently not considered to be material also may impair Food Services' business.

All forward-looking information in this news release is qualified in its entirety by this cautionary statement and, except as required by law, Food Services undertakes no obligation to revise or update any forward-looking information as a result of new information, future events or otherwise after the date hereof.

INVESTOR COMMUNICATIONS

For important updates and information regarding A&W, including the timing of future earnings calls, visit A&W's investor relations website at www.awinvestors.ca. A&W uses this website as a primary channel for disclosing key information to its investors.

ABOUT FOOD SERVICES

A&W is a publicly traded company and is the second largest quick-service hamburger restaurant chain in Canada. Operating coast-to-coast, A&W restaurants feature famous trade-marked menu items such as The Burger Family®, Chubby Chicken® and A&W Root Beer®. A&W's shares are listed for trading on the Toronto Stock Exchange in Canada under the trading symbol "AW".

SOURCE A&W Food Services of Canada Inc.

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