Earnings call transcript: Pizza Pizza Royalty Corp. sees modest growth in Q1 2025

Pizza Pizza Royalty Corp., with a market capitalization of $2.87 billion, reported a steady increase in its Q1 2025 earnings, driven by a rise in royalty income and same-store sales growth. The company, which has maintained dividend payments for 21 consecutive years and raised them for the past 4 years, also introduced several new products, contributing to its performance. Despite a challenging economic environment, the stock price showed a slight increase following the earnings release.

For deeper insights into Pizza Pizza’s dividend sustainability and growth potential, InvestingPro subscribers can access exclusive analysis and 11 additional key insights about the company’s performance.

Key Takeaways

• Q1 2025 royalty pool system sales rose by 1.6% to $151.3 million.
• Same-store sales growth of 1.2% was recorded.
• Introduced new products, including an 18-inch pizza and loaded tater tots.
• Declared shareholder dividends of $5.7 million.
• Stock price increased by 1.52% post-earnings.

Company Performance

Pizza Pizza Royalty Corp. demonstrated resilience in the face of a competitive quick-service restaurant (QSR) market. The company reported a 1.6% increase in royalty pool system sales, reaching $151.3 million, with same-store sales growth of 1.2%. This growth was supported by innovations and strategic marketing campaigns. The company maintained its position as a leading national QSR pizza brand in Canada, leveraging its strong brand recognition and expanding delivery and pickup channels.

Financial Highlights

• Revenue: $151.3 million, up 1.6% year-over-year.
• Royalty income: $9.7 million, up 1.9%.
• Same-store sales growth: 1.2%.
• Dividends: $5.7 million (23.25¢ per share).
• Payout ratio: 17%.

Earnings vs. Forecast

Pizza Pizza’s Q1 2025 revenue of $151.3 million slightly surpassed the forecast of $151.1 million, marking a modest beat. This performance aligns with the company’s historical trend of steady growth, albeit with a minor positive surprise compared to previous quarters.

Market Reaction

Following the earnings announcement, Pizza Pizza’s stock price rose by 1.52%, closing at $22.73. This movement reflects positive investor sentiment, as the stock trades just 0.93% below its 52-week high of $24.34. The stock has demonstrated low price volatility and strong returns over the past month, indicating confidence in the company’s strategic direction and financial health.

InvestingPro analysis reveals detailed technical indicators and momentum metrics that could help investors make more informed decisions. The platform’s comprehensive Pro Research Report provides in-depth analysis of Pizza Pizza’s market position among 1,400+ top stocks.

Outlook & Guidance

Looking forward, Pizza Pizza Royalty Corp. anticipates a 2-3% expansion of its restaurant network. The company aims to continue its growth in Ontario and plans to open 5-6 new locations in Mexico in 2025. Management is also preparing for a potential recessionary climate, focusing on value propositions and innovative marketing to sustain growth.

Executive Commentary

"Our job is to ensure that our customers see us offering the best food at the best price," stated CEO Paul Goddard, highlighting the company’s commitment to value. He added, "We are always innovating on our messages," emphasizing the importance of continuous product and marketing innovation in maintaining market competitiveness.

Risks and Challenges

• Economic Environment: The challenging economic landscape may impact consumer spending.
• Market Competition: Increased discounting in the QSR sector could pressure margins.
• Expansion Risks: International expansion, particularly in Mexico, presents operational challenges.
• Supply Chain: Potential disruptions could affect product availability and costs.

Pizza Pizza Royalty Corp.’s Q1 2025 earnings call showcased its ability to navigate a competitive market and challenging economic conditions, with a focus on innovation and strategic expansion.

Full transcript - Pizza Pizza Royalty Corp. (PZA) Q1 2025:

Conference Operator: Ladies and gentlemen, thank you for standing by, and welcome to the Pizza Pizza Royalty Corp’s earnings call for the first quarter of twenty twenty five. During the presentation, all participants will be in a listen only mode. After the speaker’s remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star then the number one on your telephone keypad. As a reminder, this conference is being recorded on 05/07/2025.

I will now turn the call over to Christine DeSilva, CFO.

Christine DeSilva, CFO, Pizza Pizza Royalty Corp: Thank you, and good afternoon, everyone. Welcome to Pizza Pizza Royalty Corp’s earnings call for the first quarter ended 03/31/2025. Joining me on the call today is Pizza Pizza Limited’s Chief Executive Officer, Paul Goddard. Just a quick note, our discussion today will contain forward looking statements that may involve risks related to future events. Actual events may differ materially from the projections discussed today.

All forward looking statements should be considered in conjunction with the cautionary language in our earnings press release and the risk factors included in our annual information form. Please refer to our earnings press release and the MD and A in the Investor Relations section of our website for a reconciliation and other disclosures related to non IFRS measures mentioned on this call. As a reminder, analysts are welcome to ask questions after the prepared remarks. Portfolio managers, media and shareholders can contact us after this call. With that, I’d like to turn the call over to Paul Goddard to provide a business update.

Paul Goddard, Chief Executive Officer, Pizza Pizza Limited: Thanks very much, Christine. Good afternoon, everyone, and thank you for joining us on today’s call to discuss our Q1 twenty twenty five results. We are happy to report a solid start to 2025 with positive sales growth at both Pizza Pizza and Pizza seventy three. For the quarter, our brands reported a combined same store sales growth of 1.2% with Pizza Pizza Pizza restaurants reporting 0.6% growth, and Pizza seventy three restaurants reporting growth of 4.3%. I should mention also this is lapping a positive q one same store sales growth of 1.7% for 2024.

So we are positive on top of positive for this first quarter, and we’re pleased to see that we’ve regained some positive momentum recently. As we discussed on our last call, our plans for 2025 see us continuing to leverage our brand assets and strength as we implement new promotions backed by our core product propositions and ongoing menu innovation, convenient restaurants and tech platform, and through all of this, it’s a superb customer experience. Now let’s get into the details of our performance this As I said, we kicked off the year with positive same store sales, which is great. And at both brands, growth this quarter was driven by increases in both guest traffic and the average customer check. Customer traffic growth was driven by thoughtful calendar initiatives and new product launches, and we’re happy to see growth in our organic delivery channel, which helps increase the average check.

As we’ve mentioned in the past, the QSR foodservice category is highly competitive, and we do see a heightened level of discounting continuing in the quarter. We continue to strive to find the right balance between offering competitive offers and discounts while also protecting the profitability of our restaurant order operators. Following the success of the extra extra large pizza in XXL at Pizza seventy three, we introduced the massive 18 inch pizza to Pizza Pizza customers as well. The unique benefit of operating two unique but similar brands in Canada, and and that that’s something that allows us to test and learn at one banner before launching at the other, which we’ve really, really, I think, better better at as well. At Pizza Pizza, the SXL was an immediate hit with customers, growing our pizza category overall and providing Canadians with a completely unique value option on our menu.

At $20 with three toppings, this big pizza can feed a family for an unbeatable price. Beyond our strong always on value propositions, our convenience, innovative marketing programs, and partnerships continue to be on display this quarter, driving visibility and incremental sales. So I wanted to quickly highlight a few points about leveraging our brand strength and innovation that I’ve seen this quarter. Our brands like to be at the forefront of current trending topics. While many brands added proudly Canadian badges on their ads, we took it a step further with the timely and actionable reverse channel promotion, providing Canadians with memorable advertising and true financial savings in the form of a 25% discount.

Close collaboration with our agency partners and our in house creative team allowed us to launch the program in time for the four nation hockey final. Our breakthrough and plenty ads ran in the lead up throughout the game and in the four weeks following, dominating the proudly Canadian conversation while driving up sales via the tactical 25% off reverse tariff offer. As well, the tag actually Canadian was something you might have seen while watching one of our many sponsored professional sports teams this quarter. Beyond our score of slice and score of pie promotions at our partner arenas across the country, This quarter, we leveraged our NHL team sponsorships and our long standing Coca Cola supplier relationship to create our custom hockey boxes. These boxes provided hockey fans unique hockey tabletop game complete with hockey mess with their pizza eating experience.

We have regional versions for our Montreal Canadiens, Winnipeg Jets, and Toronto Maple Leaf Sands, as well as generic boxes for all other provinces. And coincidentally coincidentally, obviously, you have three of those teams actually. Our three sponsored teams made it to the playoffs, and they’re still in it, obviously, the Jets, the Oilers, and and the Leafs. So pretty exciting times. Maybe the Aussie box is good luck.

At Pizza seventy three, to leverage our relationship with the Evans and Oilers, we introduced the Skinner Dinner, a product endorsement with the Oilers goalie Stuart Skinner. This offer has done well and it went very timely as the battle the Oilers battle on and round through the playoffs here. While we are always innovating on our messages, I would also be remiss if I didn’t speak to our product innovations this quarter. At Pizza Pizza, we introduced a unique product in the QSR space for Canada, the loaded tater tots. This program was led with our ownable and craveable creamy garlic tots in the forefront.

This offer was a great addition to orders and help lift organic sales during the promotion window. And meanwhile, Pizza seventy three, we introduced new signature wraps, including crispy chicken and donair to highlight our menu variety and drive lunch and snacking occasions. Following the successful launch of cheese stuffed crust pizzas, quick pizza pizza, we also introduced a program at Pizza seventy three this quarter. Again, we’re proving it in one brand and take it to the other if it works. The new stuffed crust option was an immediate hit with our customers, nearly doubling our sales expectation, providing us an instant net new revenue stream.

As we look ahead to the second half of twenty five, we know that there is significant competition for consumer spending, especially with the impact tariffs will have on our customers’ wallets. But the overall strength of our foundation remain the same. Our brand strength and resident marketing messages, the continually enhanced menu, relentless innovations across all aspects of our business, and unrivaled quality and convenience for our customers. So together, these pillars have been a winning winning formula for us in the past, and we feel will continue to drive our future growth and success as well. Before I turn the call over to Christine, I just wanted to briefly discuss our restaurant network growth.

We remain focused on growing our business across Canada, and we are, by any measure, the leading homegrown national QSR pizza brand. During the quarter, we opened two traditional and two nontraditional pizza pizza locations. Meanwhile, at Pizza seventy three, we opened one traditional location. And we closed four nontraditional pizza pizza sites and one traditional pizza pizza, which actually converted to a pizza seventy two site. So we continue to see opportunities across Canada.

And I would also mention, though, in Ontario, where we have the highest concentration of restaurants at Australia. That’s where we’re originally from and continue to see growth opportunities there in select places. And in fact, the two traditional restaurant openings this quarter were both in Ontario. As we head into the second half of twenty twenty five, we expect to see restaurant network expansion of roughly two to 3% traditional restaurant growth. And I’ve also mentioned apart from the network growth side, just on the tech side, we’re also continuing to invest heavily in our technology platform with increased restaurant order automation and streamlining visual order tracking for customers that you already have that we’re looking to enhance that on our app and web, and getting much more conversion now with what you see on third party platforms, as well as, features like SMS broadcast messaging and order reminders, particularly for app users and our Club eleven eleven loyalty members.

So our ongoing investments here on the tech side help drive customer engagement and loyalty along with increased order frequency. And just to close off, I just say we are pleased to see the improvement in sales and especially traffic growth. We always want volume. We always want transactions. So I think that’s, know, what’s most pleasing of all.

But we do know that the economic landscape is challenged, and customers are much more deliberate in managing overall spend. Our job, of course, is to ensure that our customers see us offering the best food at the best price. And I think we’ve been really well known for that. So we will continue to lean into our value offerings, but supported by product innovation and tech innovations and also marketing activations. And we will be wherever our customers are and will be available to them whenever and however they wanna order from us.

Finally, I’d just like to close by thanking our team, corporate employees, and operators alike for all they do day in and day out for our customers, for our communities, and for each other, especially in a difficult economic environment with a lot uncertainty and potentially worsening our our climate, a recessionary climate that could be ahead of us even more than it is now. So I think we have to be prepared for that. But feel great about our team. We’ve got a very unique special team culture from coast to coast, and the level of passion, commitment, ambition is second to none. So I feel very confident we’ll continue to be a leader in the market, continually innovating, refreshing, and reinventing ourselves.

Well, thank you for listening, and I’ll now ask Christine to provide a brief financial update.

Christine DeSilva, CFO, Pizza Pizza Royalty Corp: Thanks, Paul. As a reminder, Pizza Pizza Royalty Corp is a top line royalty corp that earns a monthly royalty through a license agreement with Pizza Pizza Limited. In exchange for the use of the Pizza Pizza and Pizza seventy three trademarks in its restaurant operations, Pizza Pizza pays the partnership a monthly royalty calculated as a percentage of royalty pool sales. Growth in the court is derived from increasing same store sales of the restaurants in the royalty pool and by adding new restaurants to the pool. On January 1 of each year, the Royalty Pool is adjusted by adding new restaurants opened in the previous year, less any restaurants that are permanently closed.

And in return, Pizza Pizza’s ownership increases. As announced earlier this year, on 01/01/2025, the royalty pool increased by 20 net new restaurants. This is the result of adding 45 new locations, less the 25 that permanently closed. So for fiscal twenty twenty five, there will be 794 restaurants in the Royalty Pool, comprised of 694 Pizza Pizza and 100 Pizza 70 three. So with that information, let’s briefly cover the financial results for the quarter.

As Paul mentioned, same store sales, a key driver of yield growth to shareholders, increased 1.2% for the quarter. Pizza Pizza restaurants recorded same store sales of 0.6% for the quarter, and Pizza seventy three restaurants increased 4.6%. Both brands saw an increase in traffic as well as average check. The combination of new restaurants back to the royalty pool on January 1 and the same store sales growth resulted in an increase in royalty pool system sales and the corresponding royalty income. Royalty pool system sales for the quarter increased 1.6% to a hundred and 50 1 point 3 million from a hundred and 40 8 point 9 million in the same quarter last year.

By brand, sales from the 694 Pizza Pizza restaurants increased 1.2% to a hundred and 20 9 point 8 million, and sales from the hundred Pizza 70 three restaurants increased 4.3% to 21,500,000.0 in the quarter. The partnership’s royalty income earned as a percentage of royalty profile increased 1.9% to 9,700,000.0 in the quarter. Beyond royalty income, the partnership also earned interest income on its cash and short term investment. And for the quarter, the partnership earned $68,000. Turning to the partnership expenses, administrative expenses, including listing costs as well as director, legal, and auditor fees, totaled a hundred and 52,000 for the quarter compared to a hundred and 26,000 in the prior year.

The increase reflects higher legal expenses and higher director fees, which were associated with one additional director joining the board as part of its succession plan. In addition to administrative expenses, the partnership is making interest only payments on its $47,000,000 credit facility. Interest paid in the quarter was 317,000. For the quarter, the interest rate was locked through April of twenty twenty five using the swap agreement that fixed the interest at a core rate of 1.81 plus the credit spread for a combined interest rate of 2.685. In March 2025, the company renewed the credit facility for a three year term with maturity now set for April 2028.

The balance of the facility remained unchanged. However, the credit spread table increased slightly with the lowest tier increasing from 0.875% to 1%. Additionally, in April 2025, the company entered into forward interest rate swaps. The new three year interest rate swaps commenced when the existing swaps expired in April 2025. And the new locked in rate is 2.51%, which is an increase from the maturing swaps that were 1.81%.

So now after the partnership has received its royalty and interest income, paid its administrative and interest expense, the resulting net cash is available for distribution to its two partners based on their ownership. After the 2025 vend in and the prior year’s true up, Pizza Pizza Limited ownership increased to 26.2%. Pizza Pizza Royalty Corp shares in the remaining 73.8% of the partnership’s distribution. It then pays taxes on its share of the partnership’s earnings, and any additional cash is available for dividends to company shareholders. Turning to dividends.

The company declared shareholder dividends of 5,700,000.0 in the current quarter or 23.25¢ per share, which was consistent with the prior year comparative quarter. As a reminder, system sales for the quarter ended March 31 have generally been the softest. And historically, this quarter results in a payout ratio over a %. The payout ratio for q one twenty twenty five was a 17% and resulted in the company’s working capital reserve decreasing by 900,000, and we ended the quarter with 5,200,000.0 available. The 5,200,000.0 working capital reserve is available to stabilize dividends and fund other expenditures in the event of short to medium term variability in our system sales and royalty income.

The company historically targets a payout ratio at or near a % on an annualized basis. That concludes the financial overview. I’ll now turn the call back to the operator to poll for questions.

Conference Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the one on your touch tone phone. You will hear a prompt that has been raised. Should you wish to decline in the polling process, please press star followed by the 2.

If you are using a speakerphone, please lift the handset before pressing any keys. First question comes from Derek Wizard with TD Cowen. Please go ahead.

Paul Goddard, Chief Executive Officer, Pizza Pizza Limited: Yeah. Good morning. That’s a good morning. Long day. Good afternoon, everyone.

How are you doing? Very well, Derek. Good afternoon, Derek. Paul, the the the the custom hockey box doesn’t look like it brought any luck to the haves, so I’m gonna kinda in the email. Every everyone’s but the haves.

Yeah. Exactly. Maybe next year. Maybe next by. Yeah.

Maybe next year. Yeah. You guys are are are clearly working extremely hard, and it’s probably over time like everyone else just given given the environment. So maybe you’re not as surprised by the the swing to positive things for sales as as everyone else might be, but I’m just wondering if you can maybe talk to, you know, how how you guys think about maybe the sustainability of of that the traffic and and check? Yeah.

It’s a good question, Derek. I mean, I think so first of all, you know, the macro environment is concerning, I think, and that would be pretty clear to everyone anyone out there. So, you know, who knows what it’s gonna look like for the rest of this year, the general economic climate. That’s probably the the biggest factor. But I do think even at that’s where the end of last year, although, you know, our results weren’t, you know, stellar last year, I we could really feel that what we’re starting to do really around q four, even what’s really starting to to work.

And a lot of that was really just a lot of the novel marketing items for the new innovations. It’s a hockey box or the XXL, you know, the wraps, things like that out west, the tots. And so I thought a of it, I think, was the the new product intros. And I think the tone that we took as well with the the tariff ads and things really got the, you know, a real sort of cultural buzz, I think, aside from specific promos There’s sort of a specific promo product intro piece that the overall brand arching message under the everyone deserves pizza sort of theme, I think just resonated. You know?

And I think we did also see with that increase in delivery that I said in my comments, you know, the average check is up on that, and so that helps pull us up as well. And that’s those are not heavily or sorry. Not easily won battles. The organic delivery side, it is tough. I mean, we generally, in the recent years, see more growth in pickup, and we still do see good growth in pickup, but it’s been harder to grow that organic delivery channel.

And others in the market have also had this tough trouble. It’s just the reality of the market and, you know, growing third party platforms and things. But I think we’re pretty happy with how people have have really taken advantage of that. And things like our, you know, special code, for instance, let’s say it’s the least or in the Habs market, there’ll be a Habs delivery or a least Dell code, on game day, for instance, it saves on delivery charge. And so things like that really do nudge people towards our own organic apps or web and drive organic delivery.

So that helps boost check and, you know, which is nice. But the traffic side, I think, it’s just really been compelling, I think, compelling specials more than anything and just the overarching marketing messages really resonating. Thanks for that color, congratulations. That’s it’s it really shot Sean through in in in that same store sales number. The you know, I I think the step the pizza seven eight three was particularly strong.

And and and know you, you know, you talked about the the signature wrap and the stuffed crust. Is and do you think that would be you know, I guess, was that the biggest driver that that new innovation, was that the biggest driver of that outperformance there? I think so. I mean, Christine might have more thoughts, but I think, you know, the reverse tariff, the the XXL did very well there. Stuffed crust did very well there.

That’s why we we, you know, extended it. So, I mean, the Skinner dinner was also a factor, but, you know, not maybe as significant as some others, but it still was definitely relevant. And then with the boilers making the playoffs and continuing, and that’s that’s helping as well. So I think it was was good to see that, you know, on and our organic delivery with us as well. It’s kinda sales, like I said, similar to pizza.

So that those are probably the biggest factors.

Christine DeSilva, CFO, Pizza Pizza Royalty Corp: Oh, and to add on it, Derek, I think you might remember, Pizza seventy three used to be thought of as, you know, like, you get two pizzas for a certain price. But with us introducing a lot of single pizza offerings, we’ve been able to attract another level of customers as well. So the Skinner Dinner is a single pizza offering at a $19 price point. The double XL pizza, again, at a sub $20 price point. So those have really helped us as we continue to lean to value at that brand too.

Paul Goddard, Chief Executive Officer, Pizza Pizza Limited: Okay. That’s that’s helpful. And then, you know, maybe just just hitting along the same theme on the sort of the that consumer backdrop. Have you, you know, have you noticed any changes, I guess, in in the consumer behavior from from last quarter? Has it, you know, as it deteriorated.

I I know I know it’s tough to to get a beat on sort of that given the the economic challenges, but just wondering if you’ve seen any change in that that behavior. I you know, overall, I mean, we’ve seen we’ve, you been happy that our traffic’s gone up at both brands along with Trek, but I I haven’t sensed anything dramatically deteriorating. I’m I’m honestly more, I guess, concerned about the rest of this year based on the geopolitical situation, I think. So I I wouldn’t say it isn’t too dramatic. I just think our message is gonna resonate more.

We do do see a lot of competitor discounting that we think is not sustainable for some. But overall, I think, you know, we feel like it’s it’s working overall. And I mean, people are still, in some cases, in some demographics, not ordering as many add on dip, drink sides, like I mentioned on our last call. But then on on the other hand, we are you know, we’re getting good success with our creamy garlic. We’ve been really trying to create that.

And it really just turned into almost like a cult phenomenon, the creamy garlic sauce itself. Right? I mean, our social media right now, I think there’s kind of an influencer doing an ad with this massive creamy garlic sauce as he’s eating pizza on the leash jersey. Unfortunately, not a haves jersey for you, but, you know, stuff like that. Yeah.

Something that really helps. So I think creamy garlic and creamy garlic pots, for instance, that helps kind of strategy different product products because we are famous for that. And in some cases, that’s an order winner, the fact that the people love our creamy garlic sauce. Even if they’re indifferent about, well, you know, these chicken wings are comparable to another leading chain, let’s say, their mind, or our pizza is similar to another leading chain. Well, only we have the creamy garlic.

So we are successful with that, and we are always trying to work with partners like Coke, for instance, who, you know, helps with our hockey box to promote more drinks, more beverages as well. So I think it’s been a bit patchy, I would say. In some cases, we’ve had a little more success recently as our results. But, overall, I still think the consumer climate is very challenged. In my sense, it’s probably worse it.

Right. Okay. And and I guess, you know, the what I did notice is that your expectations, and this is on network expansion. So your expectations for, I think, the 3% network expansion is is still in place. Have you you know, just given the environment, you know, I guess, what’s the level of franchise interest that you have currently?

I think our pipeline has been pretty solid overall. I mean, we and as I mentioned, we’ve we’ve had some success even in Ontario, which is, you know, fairly mature for us, but we do see parts of Ontario, for instance, that have been good and also, you know, recently, Newfoundland, places like that, which went off to a great start. And and there we have had in places like Quebec. It’s a little bit more been a little more challenging as we move eastward to Quebec City where we I think we are still looking to fill in a couple stores, looking for the franchisees, and then we have the store built. So that’s that shows a bit of headwind there.

But, you know, we’re we’re pretty confident that’s gonna get resolved very quickly. But so that’s a little bit weaker there. But we do have, for instance, in British Columbia where we’re still quite new and still climb climb climbing up the growth curve there, we’ve got some franchisees there. They’re actually asking for another restaurant, and we’re saying, no. No.

Hang on. It’s a little early for that. But even though they’re actually still in a real growth mode to grow their sales up, some of them are very enthusiastic to get another store. So I I we’ve always been pretty happy with our franchisees like, the franchisee pipeline in the in recent years, and it it still looks good. And I think I’m gonna mention on our call last month, we also, you know, won the elite franchise award out of, you know, a hundred franchises in Canada, leading franchises, and we’re picked number one.

And that type of thing helps our franchise sales team when we can say, look, an independent group from Europe came and rated us the number one franchise. So all the other factors and just, you know, obviously, kind of success begets success. So we never take it for granted. There’s always a few disgruntled franchisees out there. But I think overall, the mood is good.

And then when they’re in a better mood, they also talk to their friends, family members, etcetera. And that’s part of our organic franchise sales, you know, new prospect network are those people. And if they’re happy ambassadors, then we tend to have a pretty good health pipeline. Absolutely. So then maybe, you know, along the same lines, Mexico, we’ve noticed that you started to report the royalties.

It’s small from but from the from the Mexican market. Yeah. We just thought we would. And and, obviously, it’s still early days in Mexico. We really like our partner down there.

It has gone slower than expected for sure. I mean, we’ve had cases where leases take, you know, many months where, you know, think we could do it much quicker in Canada. You think, well, why? But, you know, there’s some benefits because labor is so cheap there. Construction costs are cheaper, but, you know, there it’s just that you can’t control the flow of things down there.

It’s just not as quick. But our our partners there are looking to, I think, you know, back the envelope, get probably five or six more this year. We’ve got our four performing well there that exists right now in Guadalajara. And so I’m, you know, quite confident we’ll be getting five or six more, and hopefully, to to 10 by the end of the year. You know, they’ve they’ve already got sites at leases, I think, pretty close on most of them.

So we’re we’re excited that it’ll be faster this year, but it’s still quite early. Okay. That’s for me. Congratulations on on on the quarter, and good luck. No.

Thanks a lot, Derek. Thanks for your great questions as always. Appreciate it.

Conference Operator: There are no further questions. Please continue.

Christine DeSilva, CFO, Pizza Pizza Royalty Corp: Thank you, everyone, for joining us on the call this afternoon. If you have any further questions, you can reach us after the call. Our information is on the ready to list. Thank you, and then you may disconnect your lines now.

Conference Operator: Ladies and gentlemen, this concludes today’s conference call. Thank you for your participation. You may now disconnect.

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