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Notes toConsolidatedFinancial Statements (Unaudited) (Expressed in Canadian dollars) 

Year ended December 31, 2014 

## 6. Deferred income taxes (continued): 

The Company has recognized a deferred tax asset in the amount of $10,328,049, including the tax benefit of non-capital losses carried forward of $9,455,525, as a result of the acquisition of the FW Rights described in note 7. The Company believes it is probable that it will have sufficient taxable profits in the future carry forward period in order to realize the deferred tax asset it has recogniz ed as at December 31, 2014. The Company did not recognize deferred tax assets in respect of $401,300 of net capital loss carry forwards. 

As at December 31, 2014, the Company has non -capital loss carry forwards of $36,412,000, which can be carried forward and applied against future taxable income and expires as follows: 

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## 7. Intangible assets: 

On September 26, 2014, the Company acquired theFW Rightsfroma wholly owned subsidiary of Franworks for $ 108,755,000 of which $88,072,970 was paid in cash and $20,682,030 was paid by the issuance of8,992,187 common shares of the Company. The Company, throughits wholly- owned subsidiary, the FW LP, issued 100,000,000 million of each Class B, Class C, and Class D LP Units. These units will become exchangeable into common shares of the Company through the Exchange Agreement upon satisfaction of certain criteria. The Class B LP Un its become exchangeable on the contribution of additional Franworks’ restaurants into the Royalty Pool as defined in the License and Royalty Agreement. The Class C LP Units and Class D LP Units become exchangeable on the increase in royalty rate from 6% to  7% and from 7% to 8%, respectively, as defined in the License and Royalty Agreement.  Concurrent with the acquisition of theFW Rights, the Company granted Franworks ’ wholly owned subsidiary a license to use theFW Rights for a period of 99 years. As cons ideration, Franworks pays the Company a royalty of 6% of system sales reported by Franworksrestaurantsincluded in the RoyaltyPool (note 4). 

