The Keg Royalties Income Fund announces third quarter 2004 results

Vancouver, November 10, 2004 - The Keg Royalties Income Fund (the “Fund”) today reported its third quarter financial results for the three months ended September 30, 2004. Gross sales and same store sales reported by Keg restaurants, royalty income, earnings and distributable cash all increased from the comparable quarter of the prior year. 

Total system sales of Keg Restaurants Ltd. for the quarter were $80,670,000, an increase of $8,397,000 or 11.6% over the same quarter in 2003. “We continue to see strong overall sales growth in Canada, and are beginning to see the resumption of growth in the US market,” said David Aisenstat, President & CEO of Keg Restaurants Ltd. 

The Keg’s same store sales in its core Canadian market increased by 6.4% and The Keg’s US restaurants saw sales grow by 1.2% for the quarter. Total same store sales for The Keg increased by 4.1% for the quarter, in spite of the continuing negative effect of the exchange rate between the Canadian and U.S. dollars on the translation of U.S. sales into their Canadian dollar equivalent. 

The Fund generated earnings of $2,169,000 (26.6 cents/unit) compared with $2,072,000 (25.4 cents/unit) for the same quarter of the prior year, an increase of $97,000 or 4.7%. Distributable cash available to pay distributions to unitholders increased by $75,000 or 3.6% to $2,174,000 (26.7 cents/unit), from $2,099,000 (25.8 cents/unit) for the third quarter of the prior year. The Fund continues to generate distributions to unitholders in the expected amount of 9 cents per unit per month, or $1.08 per unit on an annual basis. 

A copy of the complete financial results are available at www.sedar.com or on the Fund’s website www.kegincomefund.com. 

Vancouver-based Keg Restaurants Ltd. is the leading operator and franchisor of steakhouse restaurants in Canada and has a substantial presence in select markets in the United States. In May 2002, Keg Restaurants Ltd. launched The Keg Royalties Income Fund on the Toronto Stock Exchange. This publicly traded trust (KEG.UN-TSX) receives a royalty of 4% of gross sales of all Keg restaurants in the royalty pool. Keg Restaurants Ltd. was named “Restaurant Company of the Year” by Foodservice and Hospitality Magazine, and one of the “50 Best Employers in Canada” by the Globe and Mail’s Report on Business Magazine. 

This press release may contain certain “forward looking” statements reflecting the Keg Royalties Income Fund’s current expectations in the casual dining segment of the restaurant food industry. Investors are cautioned that all forward looking statements involve risks and uncertainties, including changes in market and competition, competitive developments, and potential downturns in economic conditions generally. Additional information on these and other potential factors that could affect the Fund’s financial results are detailed in documents filed from time to time with the provincial securities commissions in Canada. 

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

For further information: Karyn Byrne, Manager, Investor Relations, tel: (416) 646-4960, karynb@kegrestaurants.com