The Keg Royalties Income Fund Announces Third Quarter Sales Results

October 22, 2008 // Franchising.com // Vancouver, - The Keg Royalties Income Fund (KEG.UN:TSX, the "Fund") and Keg Restaurants Ltd. today announced sales results for the 13 and 39-week periods ended September 28, 2008.

Keg Restaurants Ltd.'s total system sales for the 13 weeks ended September 28, 2008 were $116.8 million compared to $107.4 million for the 13 weeks ended September 30, 2007, an increase of $9.4 million or 8.7%. For the 39-week period ended September 28, 2008, The Keg's total system sales were $340.5 million compared to $319.3 million for the 39-week period ended September 30, 2007, an increase of $21.2 million or 6.6%. Royalty Pool sales increased by 4.9% to $108.0 million for the quarter, and by 5.8% to $327.3 million for the nine-month period. These increased sales reflect the very successful new Keg restaurants which were added to the Royalty Pool on January 1, 2008, as well as same store sales growth from comparable restaurants.

The Keg's same store sales (sales of restaurants that operated during the entire period of both the current and prior years) increased by 1.1% in Canada and declined by 8.3% in the United States for the 13-week period ended September 28, 2008, and increased by 3.9% in Canada and declined by 6.6% in the United States for the 39-week period ended September 28, 2008. After translating the sales of the U.S. restaurants into their Canadian dollar equivalent, consolidated same store sales were flat for the 13-week period and increased by 1.2% for the 39-week period, despite the continuing negative effect of the exchange rate between Canadian and U.S. dollars.

"The strength of The Keg brand, and the quality and value we provide our guests has resulted in continued growth in our core Canadian market," said David Aisenstat, President and CEO of The Keg. "The U.S. economy continues to experience a major downturn and The Keg's U.S. restaurants, which represent less than 13% of The Keg's overall sales, have been impacted along with the entire restaurant industry. On a relative basis however, we remain satisfied with our performance amongst U.S. casual dining establishments. The Keg will maintain our exceptionally high standards in food quality, restaurant atmosphere and guest service throughout this period, and we believe this strategy will position us well for future growth."

Vancouver-based Keg Restaurants Ltd. is the leading operator and franchisor of steakhouse restaurants in Canada and has a substantial presence in select regional markets in the United States. Keg Restaurants Ltd. continues to operate The Keg restaurant system and expand that system through the addition of both corporate and franchised Keg steakhouses. The Keg has been named one of the "50 Best Employers in Canada" for the past six years by Report on Business Magazine. For information on our brand, visit www.kegsteakhouse.com.

This press release may contain or refer to certain "forward looking" statements reflecting the Fund's business, operations and financial condition. These forward looking statements are based on assumptions that management of the Fund believe to be reasonable. However, investors are cautioned that all forward looking statements involve risks and uncertainties that could cause actual results to differ from those expected or projected, including changes in the foodservice market, competitive developments, potential downturns in economic conditions generally and currency fluctuations. The foregoing list is not exhaustive and additional information on these and other potential factors that could affect the Fund's financial results are detailed in documents filed from time to time with the provincial securities commissions in Canada. The Fund undertakes no obligation to update or revise any forward looking statements.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, which may be made only by means of the prospectus, nor shall there be any sale of the Fund units in any state, province or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any state, province or jurisdiction. The Keg Royalties Income Fund units have not been, and will not be registered under the U.S. Securities Act of 1933, as amended and may not be offered or sold in the United States absent registration or an application for exemption from the registration requirement under U.S. securities laws.

The Trustees of the Fund have approved the contents of this press release

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