AGM 2025

Jun 13, 2025

Ladies and gentlemen, welcome to the 2025 annual meeting of Pizza Pizza Royalty Corp. Please note that the meeting is being recorded. I would like to introduce Jay Swartz, Chair of the Board of Directors of Pizza Pizza Royalty Corp. Mr. Swartz, the floor is yours. Good morning, everyone, and welcome. I will act as the chairman of this meeting. With me on this virtual call are Paul Goddard, the President and Chief Executive Officer of Pizza Pizza Limited, and Christine D'Sylva, CFO of Pizza Pizza Limited. I wanna thank you for joining us on this virtual platform. Instructions on how to ask questions and the voting procedure will appear on your screens. There is an FAQ link that addresses common issues and questions if they need arise. If you have any questions and want a written response, please include your email address. As investors, you are aware that the company owns and licenses the Pizza Pizza and Pizza 73 rights and marks through 2 license and royalty agreements with Pizza Pizza Limited. The company receives monthly royalty revenue based on sales from restaurants in the royalty pool. In 2021, the company entered into a third license agreement with Pizza Pizza Limited for the use of the Pizza Pizza rights and marks in Mexico. The first 4 restaurants in Mexico have now been opened. Although we do not expect any material royalties from this arrangement, in the near future, we are excited to see the future growth that awaits us. The key attribute of the company is that the revenue is based on top-line system sales of the royalty pool of restaurants and not on profitability of either Pizza Pizza Limited or the restaurants in the royalty pool. Increases in system sales are derived from both the development of new Pizza Pizza and Pizza 73 restaurants and same-store sales growth. Same-store sales growth is the key metric for your shareholder yield growth. I will ask Ms. D'Sylva to act as Secretary of this meeting. With the consent of the meeting, I will ask TSX Trust Company, through its representatives, to act as Scrutineers of the meeting. The Secretary has a confirmation that the notice calling the annual meeting was mailed to the shareholders in accordance with the company's bylaws and all applicable with securities regulation. With the consent of the meeting, the reading of the notice of the meeting will be dispensed with, and I will ask the Secretary to append to the confirmation of the meeting to the minutes of this meeting as a schedule. The Scrutineer has provided a preliminary report on attendance, and I will now ask the Secretary to read this report. Preliminary report on attendance. We are pleased to report that there are 40 shareholders holding 5,156,264 common shares represented in person or by proxy at this meeting. This represents 20.94% of the 24,618,392 issued and outstanding common shares. Dated this 13th day of June, 2025, signed by the TSX Trust Company. I adopt the scrutineer's report and declare that accordingly that a quorum is present. As there is a quorum present and as adequate notice of the meeting has been given, I now declare the meeting is properly constituted for the transaction of business. Before we proceed with the formal business of the meeting, I would like to note that I'm stepping down as a director and chairman of the company. I would like to take this opportunity to thank my fellow directors for their efforts, dedication, insights, and congeniality. I know that the company will be in good hands going forward, and that the new directors will bring new perspectives to the company. I would also like to thank the management team of Pizza Pizza for their hard work and cooperation. We are dependent upon their skills and cooperation, and they have been terrific partners for the company. I would also like to thank our advisors, including the team at KPMG, who are our auditors, Glen Johnson of Torys LLP, our company counsel, and Tim Heaney of Goodmans LLP, Special Advisor to the Board, for their helpful advice and guidance. We will first deal with the formal business to fulfill the legal requirements of the meeting. After that, Paul Goddard will present a business update. If you have logged in as a registered shareholder or duly appointed proxy holder, you can submit questions at any time during the meeting. If there are any questions, the secretary will take note, and the company will contact you with a response after the meeting. I have been advised that we have guests at this meeting. I welcome all the guests, remind them that they do not have the legal right to vote on any motion and are not entitled to ask any questions. However, if you have any questions, please contact us after the meeting. We will conduct today's votes by a single electronic ballot. If you have already voted in advance by proxy, you do not need to do anything when balloting is opening. Unless you wish to change your previously submitted vote, voting can only be done through the virtual meeting platform. We note that the proxies received to date indicate that the company has sufficient votes to pass all matters in accordance with the recommendations of management. The online polls are now open and will remain open as we proceed. The financial statements for Pizza Pizza Royalty Corp. for the year ended December 31st, 2024, and a report of the auditors thereon were mailed to all the shareholders prior to the meeting. I would invite you to raise any questions concerning the financial statements in the questions section of the platform. The next item for the meeting relates to the appointment of the auditors of the company. I would now ask for somebody to move a motion that KPMG LLP Chartered Accountants be appointed as auditors of the company for the ensuing year and that the directors be authorized to fix the remuneration to be paid by, to the auditors. Who will move the motion? Moved. Who will second the motion? I second the motion. Is there any discussion on the motion? As there's no discussion, I will now call for a vote on the motion before the meeting. Would all voting shareholders please enter your votes. Do we have the results of the vote? There is no change from the initial votes. The motion is passed. Thank you. It is now in order to proceed with the nomination and election of directors. The number of independent directors of the company has been fixed at five for the coming year. The meeting is now open for nominations for election of directors for the ensuing year. I would now ask the secretary to read the names of the persons nominated as directors as listed in the company's information circular. The names of the persons nominated as Directors of the company for the ensuing year are as follows: Neil Lester, George Michel, Edward Nash, Michelle Savoy, and Anne-Marie Thomas. Since the number of directors is the same as the number of vacancies to be filled, I now ask somebody to move a motion that the persons nominated for election as directors be elected as directors to hold office until the next annual general meeting. Who will move the motion? moved. Who will second the motion? I second the motion. Any discussion on the motion? As there's no discussion, I now call for a vote on the motion before the meeting. Would all voting shareholders please enter your votes. Proxies representing the shares were submitted in advance of the meeting. We will report the specific results when we receive the scrutineer's formal report, but the preliminary count shows that a majority support for each of resolution. Voting is now closed. Based on the preliminary report of the scrutineers, proxies were received from a sufficient number of shares relative to the votes cast at the meeting, such that I declare all resolutions have now been carried. I declare that the motion on the appointment of a corporation's auditors has been passed, and I declare that each of the five nominees of the board of directors be elected. I hereby direct a copy of the scrutineer's final report be appended to the minutes of this meeting. That concludes the formal business of the meeting. I wish to thank you all for attending, and I now declare the formal part of the meeting to be terminated. I would now like to call upon the Chief Executive Officer of Pizza Pizza Limited to review the business of the company and Pizza Pizza Limited. As a cautionary note, the presentation may contain forward-looking financial statements. Investors should be aware that any forward-looking statements are subject to risks and uncertainties that could cause actual results, performance and achievements of the company and Pizza Pizza Limited to differ material from those disclosed here today. We are adopting the cautionary language regarding forward-looking statements that are set out in the company's annual information form, to which we refer you for additional details concerning the risks, uncertainties, and assumptions relating to our forward-looking statements. With that, I am pleased to introduce Paul Goddard, President and CEO of Pizza Pizza Limited. Thank you, Jay, and good morning, everyone. Welcome to our annual general meeting. Before I go into my presentation, I just would like to take this opportunity to thank Jay Swartz and also Kathryn Welsh for all their years and contributions on the Board as Chair for Jay and Audit Committee Chair for Kathryn, respectively. Both have been superb Board Trustees presence. I wish them both all the best for their next chapters in life. Thank you both. We are also pleased to welcome Neil Lester, longstanding board member, as our new Chair, and also Anne-Marie Thomas as our new Audit Chair, and George Michel as a new Trustee as well. Neil has a wealth of senior executive level experience in the QSR sector, as does George. Anne-Marie has a broad range of financial sector, investment sector, and large organization experience, including as audit committee chair at other organizations. We are in great hands as we renew our board governance. Thank you again to all our wonderful board members, retiring, ongoing, and incoming. On behalf of Pizza Pizza Limited, the private operating company, we value our longstanding, strong, and cooperative relationship with you as the independent trustees of Pizza Pizza Royalty Corp. In terms of the AGM, to kick things off, I will say that 2024 was not without its challenges, but despite industry-wide challenges, we achieved remarkable milestones in our net new growth, and we have good momentum in 2025, which is nice to see. I'm eager to share the business and financial update with you today. Before I discuss our financial results, I wanted to briefly review the corporate structure and key pieces of shareholder information for any new shareholders or guests here today. Through its ownership of the Pizza Pizza Royalty Limited Partnership, Pizza Pizza Royalty Corp., PPRC, owns the Pizza Pizza and Pizza 73 trademarks and brand names, along with a number of other trademarks and brand names as well. Back in 2005, following our initial public offering, the IPO, the brands were licensed to Pizza Pizza Limited, the private operating company, in exchange for a royalty equal to 6% on the sales of Pizza Pizza restaurants and 9% royalty on the sale of Pizza 73 restaurants. To briefly explain the royalty stream, the company, and by that I specifically mean Pizza Pizza Royalty Corp., or PPRC, receives royalty and interest income, pays administrative expenses and interest on its credit facility and taxes. As a reminder, the company has no employees or capital expenditures, so after the basic expenses I just mentioned, all remaining cash is available for distribution to shareholders. The company, as a top-line royalty corp, is insulated from the operating results of the private company and its stores. The success of PPRC, the company, is driven by the operating company's ability, that is Pizza Pizza Limited's ability, to grow sales through same-store sales growth and new store openings. To provide you a brief overview of some key pieces of important shareholder information. As you can see here, we trade under the ticker PZA, pza.to. Pizza Pizza Royalty Corp has 24.6 million shares issued and outstanding on a fully diluted basis, as you see, just over 33 million shares. This fully diluted figure includes Pizza Pizza Limited's 8.7 million equivalent shares. Pizza Pizza Limited's ownership represents 26.2%, so just over a quarter of the fully diluted shares of PPRC. That clearly illustrates strong alignment between the operating company and PPRC as well, and the public shareholder base. The PZA shares of PPRC pay a monthly dividend of CAD 0.0775 per share or CAD 0.93 per annum, providing a yield of roughly 6%-7%. As of today, with PZA trading around CAD 14.60 a share, the yield is approximately 6.4%. If you take a look at PZA performance here, you can see it's been a positive story. We're proud of our entire team who makes this happen. You know, despite the economic conditions, I think we've really done well. Our business has been built on a history of consistent same-store sales growth, we've utilized that momentum and increased our dividend 8 times in the last 5 years. The history of sales growth and dividend increases over the last 4 years culminated in a 5-year high share price, which is more than double where it was in the depths of COVID. If you step back for a second, you might ask, What has driven our share performance? If we look at some of those performance highlights, our 2024 results reflect the continued challenging economic environment we operate in. With negative same-store sales, our overall royalty pool sales, excuse me, for 2024 were slightly lower than prior year at CAD 620 million, and this resulted in CAD 39.8 million of royalty income. The company paid out annual dividends of CAD 0.93 a share, leaving the company with a working capital reserve of CAD 6.1 million. While sales results or same-store sales results were weaker than we'd hoped for, I would like to highlight we opened a record 48 new restaurants, so that was a real positive note. Also happy to report a solid start to 2025, so we really seem to have renewed momentum back, which is wonderful to see, and that's at both brands. The year began with the annual adjustment to royalty pool, an increase of 20 net new restaurants, positive same-store sales growth, and a highly competitive and challenging economic environment. We ended the quarter with CAD 5.2 million in working capital reserve. As a reminder, the first quarter is generally our softest in terms of system sales, so there is that seasonality in the business. While we often see a greater than 100% payout ratio in Q1, on an annualized basis, we do target a 100% payout ratio. Looking at monthly dividend, driving our payout ratio is the dividend, and you can see our strong track record here. In the last four years, we've increased the monthly dividend eight times, most recently in November 2023, when we increased our dividend another 3.3% to that CAD 0.0775 I mentioned monthly or CAD 0.93 a year. Our current dividend is almost 9% higher than our pre-COVID levels as well, just to have a like-for-like comparison there. The dividends have been funded by operations and our working capital balance. That working capital balance is available to support our dividends when there is sales variability. Looking at same for sales growth and working capital together here, you can see that we have a healthy working capital balance of that CAD 5.2 million as of March 31, 2025, as shown, and that charts the movement in same-store sales growth in relation to our working capital. The board will continue to closely monitor sales and working capital levels to determine when additional dividend adjustments may be warranted. With that overview of PPRC, the Royalty Corp. structure, and the flow of funds, I'd like to now move to a business update for Pizza Pizza Limited, the private operating company. As a reminder, the private operating company and, you know, the success of the Royalty Corp. depends on the operating company's ability to maintain and increase restaurant system sales to the restaurants, both through new restaurant openings and increases in same-store sales. If you look at the business fundamentals, we are extremely proud of our long-standing reputation as a true innovation leader in our industry in terms of food, marketing, and technology, evidenced through our wide array of digital ordering options, new product launches, and many industry-leading marketing awards and recognition. Additionally, our strong management team has developed a proven franchise business model, which we'll continue to leverage and scale as we execute on our national, and now international, expansion program. In fact, our construction pace over the last three years has never been stronger. I'm very proud of our entire team, and this not only includes our corporate employees, of course, but our owner-operators, really our entrepreneur fleet in the restaurants themselves. We really value everyone, and we see everyone as really one big team. In this company, you really feel that culture together, that we're all pulling together. It's really a powerful thing. And just as PPL continually reinvests in all aspects of our business, so too do our restaurant operators, who likewise see the benefits of reinvesting in their restaurants on an ongoing basis to ensure they provide our customers with a modernized setting to enjoy our hot and fresh menu offerings. For our newer investors, I wanted to highlight our three brands, Pizza Pizza, which operates across the entire country, is our main brand, of course, while Pizza 73, our sister brand that was acquired in 2007, operates primarily in Alberta, although there are a few in succession in British Columbia as well. Lastly, our newest sister brand, PZA Pizzeria, as a gourmet-oriented express brand, is our new international expansion brand. I should mention that we also have several PZA Pizzerias operating as nontraditional sites in Canada. With our primary two Canadian brands, Pizza Pizza and Pizza 73, we have both traditional and nontraditional locations. Our traditional restaurants represent about 90% of our business in terms of sales and offer a full menu with customer seating, takeout, and delivery. These restaurants are usually located in high traffic areas that are easily accessible. Meanwhile, our nontraditional restaurants comprise the remaining 10% of our business, sales-wise, and are typically located in sports and entertainment venues. In the last few years, we began to roll out more nontraditional locations in venues such as colleges and hospitals, high traffic gas stations, and some chain convenience stores as well. Especially in cities where we do not have a traditional restaurant presence or think that it's warranted. Some of these nontraditional restaurants do offer both pickup and delivery, so they act as a great bridge between a full-size traditional restaurant and a smaller restaurant with limited offerings. We're striking the balance there. Currently in Mexico, we have 4 traditional restaurants, but we do have ambitious plans to scale up PZA Pizzeria there this year and beyond based on our success to date in Mexico. We see opportunities to open more nontraditional sites as time goes on, both internationally and also within Canada. As I think I mentioned, we have 5 PZA Pizzeria MTS locations, nontraditionals, in Canada already, operating in some colleges and also at Canada's Wonderland, where we also have multiple successful Pizza Pizza restaurants. Even at somewhere like Canada's Wonderland, we're offering two brands and getting great traffic at both, which is great to see. If you look at this map of Canada here, you know, it really shows our strength across the entire country, coast to coast. We remain focused on growing the business across the country, and we are known and respected as a major homegrown national brand and the leading QSR pizza chain in the country. While we continue our focus on our national restaurant expansion, taking us into the growth markets of Quebec and B.C., we are pleased to say that half of our traditional store openings in 2024 were in our biggest, longest standing and most lucrative market, the province of Ontario. In fact, in the first quarter of 2025, both new traditional restaurants were also in Ontario. Having the ability to interact with our customers through our expansive restaurant footprint across Canada, whether it's through our wide delivery network or in-store, ensures that we're able to reach customers in all metropolitan areas across Canada. In fact, our restaurant locations are within a 10-minute drive of 60% of Canadian households. Just looking at our track record here at the end of 2024, we are just shy of 800 restaurants, 797 in our Canadian network, with 578 being traditional Pizza Pizza and Pizza 73 restaurants, the most in company history. We have almost 50% more sites than we had at the time of our IPO back in 2005. During 2024, Pizza Pizza opened 21 traditional restaurants and 23 nontraditional Pizza Pizzas, and we opened 2 traditional and 2 nontraditional Pizza 73 restaurants. The new restaurants were opened across most provinces Pizza Pizza operates in, including B.C., Quebec, Ontario, Alberta, Manitoba, and Atlantic Canada. During the year, 3 traditional and 19 nontraditional Pizza Pizza restaurants were closed, and 3 nontraditional Pizza 73 restaurants closed permanently. We are proud of our accelerated growth last year and expect to maintain this pace with projected unit growth of roughly 2%-3% in our traditional restaurants in 2025, with continued focus in Quebec and British Columbia especially, and also some in Atlantic Canada, while also further penetrating in our largest two markets, Ontario and Alberta. Just turning to international briefly here, as you may recall, in November 2021, we entered into an international franchise agreement with our partners based in Mexico, in Guadalajara, to expand our footprint internationally for the first time, and in 2023, we opened our first restaurants there. We're happy with the growth that the first four stores are achieving, and we are still very excited with the long-term potential of this high-growth, high pizza-consuming market. We will see several more sites built this year in Mexico, and we are encouraged by our early success there. Although it is early days, it's really nice to see the brand already getting superb traction and reputation down there as well. Mexicans are clearly loving our delicious pizza and other menu items such as chicken and fries as well. In fact, since the successful launch of our restaurants in Mexico, it's interesting, we've seen, you know, more and more people approaching us as well for potential other international expansion opportunities. It's really kind of, I think, put us on the radar internationally as well. In terms of our brands, our customers continue to recognize our strong value proposition and convenience. Our innovative marketing activities and partnerships continue to be recognized as industry best in class and are always well received by Canadians, driving visibility and incremental sales. I wanted to quickly highlight a few points about our brand strength and brand activations. In terms of building our brands, Pizza Pizza Limited is unique in that our exceptional in-house marketing team manages a spend that is approaching CAD 30 million a year and funded entirely by our restaurants. In 2024, we continued to own key days, occasions, but we also like to be at the forefront of current trending topics. Last year, we tapped into the political zeitgeist to help boost visibility of our brand. We launched the Bipartisan Wings Program as tension arose amidst the U.S. election. Complete with left-wing, right-wing parody ads, the campaign thrust Pizza Pizza into the headlines and even made it into U.S. high-profile newspapers as well, just given the topical nature of the topic. That really gave us a significant sales lift to our chicken category. We really hit the mark there. Actually, we just won an industry award, a gold award for the marketing agency world for that ad, in fact, as 1 of, I think, the best-written ad in Canada last year. We're really proud of that and our team and our partners as well that we work with on that. In 2025, we also took it a step further with the timely and actionable reverse tariff promotion, providing Canadians with a memorable advertising campaign and true financial savings in the form of a very, very valuable 25% discount. In addition to ongoing media executions such as billboards and social media, we integrated our campaign messaging into key sports partnerships. Our well-known and loved Score a Slice promotion at Pizza Pizza and Score a Pie promotions at Pizza 73 venues, that's at the Edmonton Oilers and Calgary Flames, were very, very well-received. In the first quarter of 2025, we leveraged those sponsorships as well with our hockey boxes, which were a fabulous success. At Pizza 73, we introduced the Skinner Dinner based on their goalie, Stuart Skinner. In terms of food quality, just want to speak to that for a minute. At Pizza Pizza, our in-house R&D team is always looking to introduce new high-quality menu additions based on relevant customer trends and things that will be operationally successful and financially successful for our operators as well. We really got to manage both those aspects, and I think we do a great job of doing that. It's not easy to do that well. We have always been an early adopter, and we were the first to introduce items such as Cauliflower Crust and Keto Crust, so some healthier options. We have no artificial ingredients in any of our food, and I think, we're increasingly getting known for that, not just value, even though value is still our predominant factor. Continuously refreshing the pizza category with new crusts, recipes, and toppings brings new life to our entire pizza menu and represents the investments we continuously make in our food quality. In addition, as shown in these few quick examples you see here, we are continuously looking at items that complement our core pizza offerings, such as Loaded Tots, Wraps, Stromboli, and other items. You know, also things like the spicy delights, really gourmet Indian pizza flavors and things like that. We're always sort of pushing things. Not everything we try works, but we have a really good track record on getting success and often turning LTOs into permanent items if they get the traffic and if they make sense for our customers and for our operators. As I mentioned before, value is so key for us. We're always focusing on quality and innovation, but we always need to have that value for our customers. We know that customers are extremely value-conscious at this time, probably more than ever, given food inflation and just the overall challenging macroeconomic environment. We have to find the right balance of perceived value for money and something that's also compelling and new and novel as well. It's, you know, that has to be part of our growth strategy. We can't just rely on core menu items. In achieving this balance, we promote key specials, and we introduce new products at price points that attract customers. Many of our marketing messages are centered around our always-on value offerings that resonate with consumers, including our Score a Slice offering, our recent introduced XXL Pizza, which has been a huge success, and our everyday deals at Pizza 73, our Snack Boxes, and our walk-in and pickup specials, just to name a few. Of course, behind all this is a really, truly industry-leading infrastructure. We've invested so much over the years in our tech platform and our restaurants themselves. This multi-channel ordering platform we have is really unique in the industry. We are a leader in digital sales. Our call center, our famous phone numbers, nine six seven eleven eleven, seven three seven three out west, are clearly very important channels, as are our in-store continue to be very, very important for walk-in and pickup orders. If you look at all of that, we really are unrivaled, I see, in the industry, and it's just something that we continue to build upon. If we go back to 2009, and this is going back a while now, but this is when the iPhone came out, we really jumped on that quickly, more than others. I would say in Canada, we were really a pioneer in the pizza industry, and we really jumped on the opportunity to develop an iPhone app before others and a leading website as well. That has still been a massive piece of our momentum, I think, going right back to 2009 until today, where we continue to invest in our app and our websites for both brands and really have an end-to-end digital platform. There is no other pizza player in Canada that has more digital channels for customers to use. We're convenient if you wanna walk in as well. No matter how you wanna order from us or get your food, we're there for you. There's so many channels we have, and really, convenience with us is number one, and we realize that although it's a competitive world, we think we've done the best job in the entire industry in pizza to do that. That involves a lot of continuing ongoing IT investment as well, and that's something that we'll continue to be a leader in Canada. This continuous IT investment and having that really melded with our marketing and operations strategy as well, kind of symbiotically, the IT, the operations, and the marketing, those three things together are one of our key advantages that I think, again, is unique to us. If you look at us, whether it's pre-pandemic, post-pandemic, you know, the online ordering platforms have performed exceedingly well. The percentage of online orders we have is tremendous, and we just intend to do more and more. We're roughly two-thirds digital, but we see opportunities to do much better than that even going forward. Others have struggled with that. Many people are solely reliable on third-party platforms, for instance. We do use third-party platforms as well to augment our customer ordering as another channel. Our organic ordering is tremendously cost-effective, efficient for people, and we've developed features such as contactless ordering, pre-tipping within the app and website. I think even when the pandemic happened, we were extremely agile and developed that capability within 4 days. We wanna be responding to what customers want and be the fastest, most convenient platform available. We've similarly done this. It's not just for Pizza Pizza, it's also for Pizza 73. We've invested heavily for our apps and website technology there, and that's really proven to be a key part of our success. Just a little more on that, just some images on our tech and innovation side. Much like a third-party aggregator platform on our organic app when you order, you can also track your order visually now. That's super convenient. People really value that. Really, like as I said, it's over 2/3 of our orders really come through these digital channels now, and we'll keep pushing that. People wanna see that. It's good for our customers primarily, and it's also great for the company and our franchisees. It's easier for them and it's just more automated, and we're bringing more and more intelligence, including AI. We've been investing in AI infrastructure heavily to do intelligent delivery order tracking and prioritizing, for instance. With this mapping capability, we also can track when orders leave the restaurant, when they arrive at the customer, and we get a lot more feedback than we ever used to and a lot more data. We can always continually iterate on that and improve on our performance, whether it's delivery times or, you know, the attitude of the delivery driver. We get feedback on that as well. It's tremendously advantageous to us, the tech platform being linked to our operations and our marketing. We've also got our 40-minute famous delivery time guarantee of 40 minutes or free. That continues to be very unique in the industry in Canada, and people know it. Third-party platforms don't offer that. Our customers right across Canada are also loving how easy they can track these orders and where the delivery driver is. They're continuing to use our organic platform more and more as they see us providing more and more benefits on that platform as well. If you look at our restaurants as well, it's not just the technology side, but the actual restaurant, the bricks and mortar are so important as well. We continually reinvest in our look there, our designs to both the exterior and interior. If we look at just even the last three years, we've seen a shift in customer behavior, with customers moving increasingly to pick up orders. That's actually an industry-wide trend. It's not just us. People are increasingly weary of delivery fees if they're unable to afford them. They can also pick up orders and order remotely if they like in advance. That's becoming a trend. We've seen tremendous growth in that. We can handle the growth in delivery or pickup. We're very agile that way and multi-channel, as I said. With our almost 800 locations across Canada, you know, we just are the most conveniently located restaurant network out there. We're ideally positioned to capture all audiences, especially those looking to save on delivery or tip or other surcharges that many companies charge, network access fees and things that others might charge. Our in-store pickup channel has grown steadily really over 4 years, and is at the highest sales level it's ever been at. When customers do visit our restaurants, they see that renovated new look and feel, whether it's Pizza Pizza or Pizza 73 or, you know, a few brand new PZA Pizzerias that we have as well. They see it and they know that we're continuing to reinvest in everything. It's not just the quality, service, and cleanliness, which are so important, but what's the physical environment, what's the ambiance, then they see the new menu items that come out, and they know that we're continually reinventing ourselves and committing to that high brand standard. I think that's what helps drive our traffic and becomes that circuitous, virtuous circle. I would say now, when you look at these images here, we're about 95% now with the hot and fresh look. There's still a few that have not been renovated yet, but it's a very small number. We're about 95% renovated, so very exciting and customers certainly appreciate it. There's a couple images now here of the interior as well, that we've certainly been updating. We have different models and designs, and depending if it's an urban environment or a smaller store, a bigger store, we can tweak that a little bit. People really see that our stores are clean, fresh, modern, and the customer service is also on par with that and in line with the brand and so is the food. It's all kind of very holistic, and that ties in with our world vision, which has been for many years, "All the best food made especially for you." It has to be not just the food, but the environment and the service as well. Here, this is just more of a boasting slide, but, you know, we're driven by what makes customers happy and what makes the company perform. It's nice to get along the way some third-party recognition, and we have had, honestly, a slew of awards over the last few years. You can just see here, both on the culture side, Best Workplaces awards and Career Directory for the corporate side, Most Admired Corporate Cultures, things such as that. Also on the franchising side, we're very proud that our operators continually see us as their key choice brand, which is probably the biggest vote of confidence as well for our own owner-operators that see us as a great partner to help them do well in their business. Just this last year, we actually, just this April, in fact, we were ranked the number one franchise group out of a final group out of 100 as the number one franchise in Canada by Elite Franchise Top 100 there in the top left as you see there. That's been fantastic. The Canadian Franchise Association, that's been 11 consecutive years that franchisees have chosen us. A huge vote of confidence for our operators, we're very proud of that. Also, the Canadian Franchise Association actually gave us the wonderful honor of being the champion for diversity and inclusion in 2023 as well, and we were awarded Brand of the Year by Strategy Magazine, which is a marketing strategy magazine. There's a lot of these awards that I think just all sort of are a reflection of who we are and who we're trying to be as well, and we're always trying to do better as well. We're not gonna just sit back because we want to won awards. We wanna get to the next level, and that's something that we always enjoy that journey. I think also just with Not because of the third-party validation, but I think just people see us reinventing ourselves and our brands. We're continually evolving, I think we are increasingly seen as a real industry authority as well. We, we do, you know, myself, a lot of our team members are involved with informal panels, often writing articles and presenting in the media with our thoughts as an industry leader as well and helping the entire industry just understand what we're about. I think that's really nice to see as well. I'm really proud of our team's effort on that too, and just being a real example in the industry of what a, what a great company can be when you look at the operators and the company employees together as one big team. It's pretty powerful. This has been a long-standing part of our DNA at Pizza Pizza. It's just the investing in communities. Some of what we do never reaches the media. A lot of it's done under the radar by restaurant operators, but we also do very high-profile things as well that we do get a lot of attention for. What's nice is that people do a lot of wonderful things we don't even hear about sometimes. We might hear about it a year later that a franchisee in Kingston or somewhere, as a great example, just does so much for the community, again and again and again. It becomes an example to other franchisees to do the same and just become really part of the fabric of the community and do the right thing. We do have some more high-profile ones here. We're showing some on the screen here. We have our Slices for Smiles Foundation, which donates to SickKids hospitals across the country. We donate the money where we make the money. The Toronto SickKids Hospital will be the biggest single beneficiary, we're also big in Alberta, in Montreal and Ottawa, and those respective children's hospitals across the country. That's something that we've been very proud of for a long time. Also very proud of our sponsorship with the new professional women's hockey league as well. We see that as, you know, fitness, sports, is such a great natural connection with Pizza Pizza, kids and sports. We're sponsoring kids' soccer teams or just promoting fitness as well and giving back as well, and especially the SickKids Hospital. That's our biggest thing, but we'll continue to find ways to do more and more to help out the communities as well. Just to touch on environmental, social, and governance, the ESG side of things. I think if you've followed Pizza Pizza for a long time, that you'll know that we've always been a leader on the environmental front. This is not just when it became fashionable. It goes right back to the beginning of the company, and I think we've always wanted to be very smart and not wasteful in everything we do. Just be smart and don't be wasteful, and let's look at ways to do more and more with packaging, our physical environment, look at the planet, our food, our people, the community. Are we doing everything we can? Some examples of that are our boxes are made with recycled content. Our head office here, where I'm standing at the moment, has a rooftop with built-in solar panels. We have three wind turbines outside our office to generate additional clean energy. We have a battery array. We try and reduce our air conditioning load and demand in our head office and our facilities. You know, that these things all add up. I mean, it's just, it's just smart and something we're very proud of, and I think we'll continue to do more and more on that front as well. As I said, communities is an important part. Slices for Smiles. We do a lot of fundraising as well with local, whether it's a local soccer league, other local fundraisers. We also make sure we don't waste food. Sometimes there's restaurants that are late at night, and they have excess inventory, and we said instead of dispensing with that food that's not, you know, ready and fresh enough, it's been around for more than 30 minutes, we will actually put that food on offer on the Too Good To Go platform, which has been a wonderful platform for people to get at a very low price, sort of excess inventory of food late at night often. That's been not only Pizza Pizza, but other companies in the QSR space have done that. I think we were the first pizza company in Canada to do it, and I think the first QSR chain to do that, and I think that led to others doing the same thing, which helps the entire community. We feel good about being a catalyst sometimes. Even though others might copy it's still great for the entire community, that's just a good thing. We also donated a lot to Second Harvest, which many of you are I'm sure familiar with as well. Been a long time strong community partner for us across the country. With that brief overview and understanding, I just wanted to go back to a quick investment summary of key advantages of being a PZA shareholder. Again, as a top line royalty corp, the company's royalty structure reduces risk to the bottom line by eliminating exposure to restaurant operations. That's what Pizza Pizza Limited deals with, but Pizza Pizza Royalty Corp is just a top line royalty corp. It's a high-yield dividend corp, obviously. It yields, as I said, between 6%-7% and holds sufficient working capital of currently CAD 5.2 million to support the dividend. A really healthy balance there. With over 55 years of experience, it's hard to believe we're gonna be hitting 60 soon. A lot of experience in the quick service industry, you know, starting in Toronto, expanding throughout Ontario and then across the country and now even beyond Canada. Very exciting. We've had that strong history of increasing sales. Our brands are holding market-leading positions. Some exceptional brand recognition. Lots of runway left still within Canada and very exciting prospect of international as we go down the road as well. Lastly, I'll just say as the company's largest shareholder, the operating company, Pizza Pizza Limited, has its interests very aligned with the public shareholders, as I said at the very beginning, ensuring that every pizza created, every meal we create doesn't just add value to the customer, but also to the shareholder. I just wanted to thank you for listening in today. We really appreciate it, and I'd just now like to hand things back over to Jay, chair of PPRC. Paul, we've lost Jay, but Jay has asked us to conclude on his behalf. Thank you, everyone, for joining us today at the AGM, and thank you for your continued support in PZA. You may now disconnect your lines. Thank you. Thank you for attending today's meeting. You may now disconnect.