Hello, this is the Chorus Call conference operator. Thank you for standing by. Welcome to Boston Pizza's third quarter conference call. As a reminder, all participants are in listen-only mode, and the conference is being recorded on November eleventh, twenty-twenty-one. After the presentation, there will be a question-and-answer session. Participants on the call may also pose their questions via email to Boston Pizza's Investor Relations department at investorrelations@bostonpizza.com. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Michael Harbinson, Chief Financial Officer. Please go ahead.
Thank you, and welcome to the call, everyone. Today we'll be discussing the 2021 third quarter results for both Boston Pizza Royalties Income Fund or the Fund, and for Boston Pizza International or BPI. For complete details on our financial results, please see our third quarter materials filed earlier today on SEDAR or visit the Fund's website at bpincomefund.com. Should you require additional information after the call, you can reach us via the investor relations phone number listed in our press release. The Fund is a limited purpose, open-ended trust established under the laws of British Columbia to acquire, indirectly, certain trademarks and trade names used by BPI and its Boston Pizza restaurants in Canada. BPI pays royalty and distribution income to the Fund based on franchise revenues of royalty pool restaurants.
For a complete description of the Fund and its business, please see the annual information form dated February ninth, twenty-twenty-one, which was filed on sedar.com. Before I turn the call over to Jordan Holm, President of BPI, I would like to note that certain information in the following discussion may constitute forward-looking information. For a more complete definition of forward-looking information and associated risks, please refer to the Fund's management discussion and analysis issued earlier today. Forward-looking information is provided as of the date of this call and, except as required by law, we assume no obligation to update or revise forward-looking information to reflect new events or circumstances. With that, I will now turn the call over to Jordan.
Thank you, Michael, and welcome everyone to Boston Pizza's third quarter investor conference call. Today I'll be discussing our results for the quarter ended September 30, 2021, and also share a brief outlook. Michael will summarize our key financial highlights. As usual, we'll leave time at the end of today's call for your questions. The third quarter generated our strongest sales results since the start of the pandemic. In fact, sales were near pre-pandemic levels for the first time, despite COVID-19 continuing to pose significant challenges to our Boston Pizza system. Low COVID case counts during the first part of the quarter allowed government authorities to ease operating restrictions in all provinces. The easing of restrictions led to an increase in our on-premise business in the quarter.
At the start of the third quarter, approximately 98% of all Boston Pizza restaurants were open for on-premise dining as well as takeout and delivery. However, by the end of the quarter, most regions of Canada had implemented vaccination passports, which require guests to show proof of vaccination for on-premise dining. To date, these vaccination passports have resulted in a decrease in customer traffic at our restaurants. Although vaccine passports may enable on-premise dining to remain available, the full impact of vaccine passports on our future sales remains to be seen.
Turning to our financial results, the Fund posted Franchise Sales from restaurants in the royalty pool of CAD 213 million for the quarter and CAD 476.9 million year to date, representing increases of 14.9% and 2.2% respectively versus the same periods one year ago. Same Restaurant Sales on a Franchise Sales basis was +15.1% for the quarter and +3.1% year to date. Positive results for the quarter and year to date were principally due to increases in guest traffic from the easing of government restrictions along with increased takeout and delivery sales. We are pleased that these sales results have supported an increase in the Fund's distribution rate, which Michael will elaborate on further later in the call.
COVID-19 first began to adversely affect Boston Pizza restaurants in March 2020. As a result, the Fund believes it's useful to report additional sales metrics that compare sales in 2021 to sales in 2019. Comparing to 2019 results allows investors to gauge Boston Pizza's current sales levels against sales levels on a pre-pandemic basis. If SRS on a franchise sales basis were calculated by comparing to the same period in 2019, SRS would be -1.5% for the quarter and -24.7% year to date. SRS for October, the month of October 2021, was approximately +8% when compared to the same period in 2020 and approximately -15% when compared to the same period in 2019.
Total franchise sales and the resulting royalty and distribution income for October 2021 were approximately 109% of the level they were in October 2020 and approximately 88% of the level they were in October 2019. While we've been pleased with our ability to mitigate our sales declines throughout the pandemic, we do expect that COVID-19 will continue to have a negative impact on our restaurants. However, we anticipate that sales levels for the second half of 2021 will be favorable compared to the first half of this year. From a marketing standpoint, Boston Pizza began the third quarter of 2021 with our summer patio promotion, which included our patio retraining campaign and a new summer feature menu, both of which were exceptionally well received by our guests. In August, we kicked off our popular BP Kids Cards promotion.
This promotion is always a favorite for families, where a CAD 5 donation to the Boston Pizza Foundation, they receive a card for five free kids meals at Boston Pizza. We raised over CAD 700,000 and donated that to our national charity partners through the Boston Pizza Foundation. We ended the quarter by introducing our fall feature menu, which featured three new pizzas, all created by staff members in our restaurants across the country, and some new menu favorites from the past, our BP Classics. Turning to restaurant development, Boston Pizza opened no new restaurants during the quarter or year to date. Boston Pizza closed no restaurants in the third quarter and has closed two restaurants year to date. Subsequent to the quarter, Boston Pizza closed one restaurant.
BPI continues to focus on the safety of our guests and our restaurant staff, serving our communities with takeout and delivery and on-premise dining as permitted, and helping our franchisees to effectively manage through the next phase of the pandemic. I'll now pass it to Michael for a review of the fund's financial performance. Michael?
Thank you, Jordan. The fund posted royalty income of CAD 8.5 million for the quarter and CAD 19.1 million year to date, compared to CAD 7.4 million and CAD 18.7 million, respectively, for the same periods one year ago. The fund posted distribution income of CAD 2.8 million for the quarter and CAD 6.3 million year to date, compared to CAD 2.5 million and CAD 6.2 million, respectively, for the same periods one year ago. Royalty and distribution income for the quarter were based on 387 Boston Pizza restaurants in the royalty pool that reported franchise sales of CAD 213 million for the quarter and CAD 476.9 million year to date.
For the same period in 2020, royalty and distribution income were based on royalty pool restaurants of 395, reporting franchise sales of CAD 185.4 million and CAD 466.6 million, respectively. The fund's net and comprehensive income was CAD 5.4 million for the quarter compared to net and comprehensive loss of CAD 0.7 million for the third quarter of 2020. The CAD 6.1 million increase in the fund's net and comprehensive income for the quarter compared to the third quarter of 2020 was primarily due to a CAD 5.5 million decrease in fair value loss, higher royalty and distribution income of CAD 1.5 million, partially offset by higher interest expense on Class B Units of half a million, and higher income tax expense of CAD 0.4 million.
The Fund's net and comprehensive income was CAD 24.8 million year to date, compared to net and comprehensive loss of CAD 10 million year to date in 2020. The 34.8 million increase in the Fund's net and comprehensive income year to date compared to the same period in 2020 was primarily due to a CAD 35.6 million increase in fair value gain and higher royalty and distribution income of CAD 0.6 million, partially offset by higher interest expense on Class B Units of CAD 0.8 million and higher interest expense on long-term debt of half a million. Or excuse me, of CAD 0.5 million.
While net and comprehensive income or loss is a measurement of the fund's earnings under International Financial Reporting Standards, or IFRS, the fund is of the view that net income or loss does not provide the most meaningful measurement of the fund's ability to pay distributions because the calculation of net income contains non-cash items that do not affect the fund's cash flow. Non-cash items include the fair value adjustment on the investment in Boston Pizza Canada Limited Partnership, the Class B unit liability, interest rate swaps, and changes in deferred income taxes. Consequently, the fund reports the non-IFRS metrics of Distributable Cash and Payout Ratio to provide investors with, in the fund's opinion, more meaningful information regarding the fund's ability to pay distributions to unitholders.
The Fund generated Distributable Cash of CAD 6.7 million for the quarter, compared to CAD 5.5 million for the third quarter of 2020. The increase in Distributable Cash of CAD 1.2 million or 22.5% was primarily due to an increase in cash flow generated from operating activities of CAD 3.4 million, partially offset by an adjustment to CIFT tax on units of CAD 1.1 million and a contractually required debt repayment of CAD 1 million, for which there is no comparable repayment in the third quarter of 2020. The Fund generated Distributable Cash of CAD 14.4 million year to date, compared to CAD 10.9 million year to date in 2020.
The increase in Distributable Cash of CAD 3.5 million or 31.7% was primarily due to an increase in cash flow generated from operating activities of CAD 7 million and an adjustment to CIFT tax on units of CAD 0.4 million, partially offset by contractually required debt repayments of CAD 3.1 million, for which there are no comparable repayments in 2020, and an increase on interest paid on long-term debt of CAD 0.6 million and increased entitlement for BPI's Class B units of CAD 0.2 million. The Fund generated Distributable Cash per unit of CAD 0.31 for the quarter, compared to CAD 0.253 per unit for the third quarter of 2020. The increase in Distributable Cash per unit of CAD 0.057 or 22.5% was primarily attributable to the increase in Distributable Cash as just explained.
The Fund generated Distributable Cash per unit of CAD 0.668 year to date, compared to CAD 0.506 per unit year to date in 2020. The increase in Distributable Cash per unit of CAD 0.162 or 32% was primarily due to the increase in Distributable Cash outlined above and fewer units outstanding compared to the same period in 2020 due to the Fund's Normal Course Issuer Bid that was active from February 19, 2020 to February 18, 2021. Fund's Payout Ratio for the quarter was 62.9% compared to 0% in the third quarter of 2020.
The increase in the fund's payout ratio for the quarter was due to distributions paid of CAD 4.2 million, with no distributions paid during the third quarter of 2020 and distributable cash increasing by CAD 1.2 million or 22.5%. The fund's payout ratio year to date was 117.6% compared to 63.5% year to date in 2020. The increase in the fund's payout ratio year to date was due to distributions paid increasing by CAD 10 million or 144%, partially offset by distributable cash increasing by CAD 3.5 million or 31.7%. The payout ratio is calculated by dividing the amount of distributions paid during the applicable period by the distributable cash for that period.
Accordingly, the Payout Ratio year to date factors in the CAD 0.20 special distribution that was paid on January 29, 2021, even though the cash generated to fund the special distribution was generated during fiscal 2020. If the special distribution was excluded in the calculation of the Payout Ratio on a year to date basis, that Payout Ratio would be 87.6%. The Fund's Payout Ratio typically is higher in the first and fourth quarters compared to the second and third quarters, since Boston Pizza restaurants generally experience higher Franchise Sales levels during the summer months when restaurants open their patios and benefit from increased tourist traffic. On a trailing twelve-month basis, the Fund's Payout Ratio was 106.8% as at September 30, 2021. The effects of COVID-19 may materially affect the Fund's Payout Ratio in the future.
On October 8, 2021, the trustees of the fund announced an increase to the monthly distribution rate and declared a distribution of CAD 0.085 per unit beginning with the September 2021 distribution that was paid in October 2021. This represents an increase of CAD 0.02 per unit or 30.8% from the previous monthly rate of CAD 0.065 per unit. On an annualized basis, the new monthly distribution rate equates to CAD 1.02 per unit compared to CAD 0.78 per unit at the previous monthly distribution rate. On November 10, 2021, the trustees of the fund approved a cash distribution to unitholders of CAD 0.085 per unit in respect to the period from October 1, 2021 to October 31, 2021.
This monthly distribution will be payable on November 30, 2021 to unitholders of record at the close of business on November 21, 2021. The trustees' objective in setting a monthly distribution amount is that it be sustainable. The trustees will continue to closely monitor the fund's available cash balances given the continued volatility and economic uncertainty caused by COVID-19. While COVID-19 persists, the trustees expect that the Franchise Sales and Same Restaurant Sales and the resulting royalty and distribution income along with distributable cash will all continue to be adversely affected. With that, I will turn the call back over to Jordan for more on the outlook. Jordan.
Thank you, Michael. We continue to be pleased with the efforts of our team and the franchisees during these challenging times. Boston Pizza began its fourth quarter with significant national media presence for the 2021 NHL hockey season, which invites our guests to enjoy Boston Pizza menu items in our restaurants or in their home. We've also launched a new fall feature menu and brought back our successful Call The Shot promotion in the fourth quarter of this year. Under our Call The Shot promotion, customers who order a Pizza Flight or Molson Canadian product are eligible for a chance to win great prizes by predicting the outcome of NHL hockey games. With respect to our outlook, BPI's management continues to monitor the evolving COVID-19 situation and modify the operating procedures of Boston Pizza restaurants to ensure the safety of our guests and our staff.
Our current outlook remains cautious as we anticipate COVID-19 will continue to have a negative impact on the business of Boston Pizza restaurants during the remainder of this year. Our goal is to responsibly and safely operate the dining rooms, sports bars and patios of Boston Pizza restaurants across Canada and of course, continue to offer takeout and delivery in all regions. We continue to adapt our plans to responsibly address the challenges and opportunities presented by COVID-19. With that, I'd like to turn it back to the operator to begin the question and answer session. Operator.
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star then one on their touch tone phone or send the question via email to investorrelations@bostonpizza.com. Please note those questions that we do not get to during the call will be answered via email immediately following the end of the investor conference call. The first question is from Nick Corcoran from Acumen Capital Partners. Please go ahead.
Good morning, and thanks for taking my questions.
Morning, Nick.
Can you maybe talk about the trend in system sales that you saw through October and whether it was flat for the entire month or improving?
Yeah, Nick, maybe I'll start off and then turn it over to Michael on this one. Provinces introduced vaccination passports for guests visiting on-premise occasions in restaurants, full-service restaurants across the country, starting September first with Quebec and closely followed by Manitoba, B.C., Ontario, now right across the country. We did see an initial, you know, I think a significant pullback in guest traffic, on premise. There was some confusion on implementation and rules, but we did see that settle somewhat, that people understood the rules and whether it's the QR codes or the different approaches that the provinces have to verify vaccination status on premise before entering an establishment became understood, and we saw that recover.
Maybe I'll then turn it over to Michael to talk specifically to your question about the October trend.
Mm-hmm. Thanks, Jordan. Just to refresh the kind of broader listening group here. Total franchise sales for October compared back to 2019, which is our pre-pandemic and a benchmark, were down about 12% in October. As Jordan said in the first half of the month that it was down to a greater degree, just as everyone adjusted to the vaccine passport and the other factors. Then in the second half of the period, it started to even out.
Can you maybe expand on whether you're seeing any challenges from labor and supply chain issues?
Yeah. Well, certainly in the summertime when you saw the results for the third quarter being driven primarily by July and August results, tailing off a little bit in September as we experienced again those vaccination passport restrictions. In July and August when we were doing sales levels in some weeks above the pre-pandemic 2019 levels, absolutely, you know, standing back up a restaurant industry that has been in lockdown in some provinces longer than anywhere else in the world was a significant challenge on both of the things that you mentioned. Labor would be number one. A number of people who were working in our industry have had their shifts cut back or have been laid off from restaurants that have had to downsize throughout the pandemic.
We've had people exit the restaurant sector and finding labor has been a huge challenge. I'm sure everyone who follows the economy has heard the stories of labor shortage, and we're no different. We've certainly put a lot of effort along with our franchisees to address getting proper staff, making sure we can service people properly. At times of high sales volumes, that was a challenge through the summer, supply chain as well. Again, that's been all over the news. Everybody knows it's a global disruption as the whole global economy is trying to ramp back up in a lot of ways for things that were restricted during COVID.
We did have some product pressures in supply chain, nothing widespread or overwhelming, but there were definitely some scrambles to make sure that regional distribution centers had product available to make sure in those high demand periods of the summer in particular, that we had everything that we needed to operate. Yeah, those are definitely the two hot items when sales are really high. Obviously when we pulled back a little bit on sales levels in September and October, there's some easing of that. Labor was a shortage for our industry coming into this. All of hospitality has a shortage of available workers, whether it's hotels or travel or restaurants. That'll continue to be an area that we need to focus on as an organization and an industry.
With a tight labor market, did you have to restrict hours or potentially capacity, just 'cause your restaurants might not have had the labor to keep them open for longer or have more seats?
Yeah, Nick, it would be very location specific. We did have a few locations that had to restrict their hours or perhaps even close for one day of the week to give their staff a rest. That's very difficult for us to see because we worked so hard to be able to open and our guests came back in full force. To have to restrict hours or to close certain days of the week is not where we wanna be. It was driven by labor considerations. Like I said, it's eased a little bit in the fall. I think, you know, people have returned to some of the past practices recreationally and professionally that they were doing pre-pandemic.
that has helped bring in more applicants and raise our labor levels. Like I said, it's been a challenge in this industry for a while and will continue to be so. It is still a major focus for us.
Great. Have you put through any price increases?
We haven't yet. I mean, there are different ways of addressing menu pricing. We have done less discounting, I would say. Just, you know, it's a less necessary over the last few months because the, you know, the consumer demand has been pent up for quite some time. People were maybe more motivated by availability and, you know, ability to indulge and socialize and get out there more than, you know, a price-motivated visit. Less discounting. And, you know, our feature menus probably had a little bit of price consideration put into them as we rolled out both the summer and the fall feature menus.
Next week, we have a new national menu rolling out as well as a new and refreshed fall feature menu. We'll address menu pricing in both of those pieces as well. It's not all done all at once. We do obviously need to look at the rising costs in our restaurants, whether it's supplies or whether it's labor, and find a way to balance that with what the guests see from a price perspective. We haven't taken a lot of price at this point, but it is something that we will continue to look at and then balance between what our costs are and how we can adjust prices accordingly.
How have takeout and delivery volumes been through the summer? Maybe you can elaborate on the trend you've seen there.
Michael, do you wanna take that one?
Yeah. Takeout and delivery volumes have continued to be relatively strong, and we would kinda judge that in comparison to 2019 levels. Some of that, I think, is driven by just a natural shift in consumer spending because of COVID, and some of that, I think, is to the credit of just our own internal team and being able to pivot the business towards more in the takeout and delivery. Yeah, I think it's that part of the business certainly is a good news story in the sense of you know, through COVID, we've adapted to the times. You know, once COVID, I think, is behind us, there should be some good, positive lasting impacts from all the work that's been happening.
Can you remind me what takeout and delivery was pre-pandemic and where it might be tracking now?
Yeah. Pre-pandemic, takeout and delivery represented 18% of our total business, you know, on a pre-pandemic basis. We're continuing to kinda overperform that.
Last question from me, how is the pipeline for new franchises? Maybe you can elaborate on the outlook there.
I did mention during the call that we did have no new openings or have had no new openings year to date. We have had some resales, so some existing locations have changed hands. We continue to see new franchisees coming into the system on a resale opportunity. We do expect that there will be a return to you know new locations in the years ahead, and we're planning for that in 2022. Just looking for obviously that match between a franchisee in a region and the right location that would support our business model. We've obviously taken a pause here while we get through the COVID period, and I think that's appropriate.
We do intend, and we have sites identified and franchisees in the pipeline that will be looking to open new locations, whether it's in 2022 or beyond.
Thanks. That's all for me.
Thank you, Nick.
There are no further questions at this time.
Okay. Thank you. As there are no further questions, I'd like to thank you for taking the time to listen in. We look forward to safely welcoming back more of our guests into our restaurants. Please continue to stay safe and healthy, and we look forward to speaking with you all again at our fourth quarter conference call in February 2022. Thank you, everyone.
This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.