Diversified Royalty Corp. in its royalty transaction with Cheba Hut Franchising Diversified Royalty Corp. in its royalty transaction with Cheba Hut Franchising

On June 17, 2025, Diversified Royalty Corp. (DIV) completed the acquisition of the trademarks and certain other intellectual property (the Cheba Hut Rights) used by Cheba Hut Franchising, Inc. of Fort Collins, Colorado, in its fast casual, toasted sub sandwich restaurants for a purchase price of US$36 million cash. Immediately following the closing of the acquisition, DIV licensed the Cheba Hut Rights in the United States back to Cheba Hut for 50 years, in exchange for an initial royalty payment of US$4 million per annum. The royalty will be automatically increased at a rate equal to the greater of 3.5% and the U.S. CPI + 1.5% per year without any further consideration payable by DIV. Cheba Hut is DIV’s ninth royalty stream and second based in the United States.

DIV is a multi-royalty corporation, engaged in the business of acquiring top-line royalties from well-managed multi-location businesses and franchisors in North America. DIV’s objective is to acquire predictable, growing royalty streams from a diverse group of multi-location businesses and franchisors.

Osler, Hoskin & Harcourt LLP advised DIV with a team consisting of Brad Newby, Trevor Scott, Minji Park and Fraser Love (Corporate).