VANCOUVER, BRITISH COLUMBIA–(EMWNews – July 31, 2008) –

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE U.S.

The Keg Royalties Income Fund (the “Fund”) (TSX:KEG.UN) has reported its financial results for the three and six months ended June 30, 2008. Gross sales and same stores sales reported by Keg Restaurants Ltd. (“KRL”), royalty income, earnings before income taxes, and distributable cash all increased from the comparable periods of the prior year.

As previously announced, gross sales reported by Keg restaurants in the Royalty Pool increased by $6,706,000 or 6.6% to $107,690,000 during the quarter and by $13,016,000 or 6.3% to $219,240,000 year to date. The increase in gross sales reflects the net impact of the addition of net new sales to the Royalty Pool at the beginning of the year and an increase in same store sales.

KRL’s same store sales (sales of restaurants that operated during the entire period of both the current and prior years) increased by 4.7% in Canada and declined by 7.5% in the United States for the 13-week period ended June 29, 2008, and increased by 5.5% in Canada and declined by 5.5% in the U.S. for the 26-week period ended June 29, 2008. After translating the sales of the U.S. restaurants into their Canadian dollar equivalent, consolidated same store sales increased by 1.7% for the 13-week period and by 1.9% for the 26-week period, despite the continuing negative effect of the exchange rate between Canadian and US dollars.

“We continue to be extremely pleased with our strong sales results in Canada,” said David Aisenstat, President and CEO of The Keg. “The strength of The Keg brand and the guest experience we provide continue to offer stability and growth in our core market. The economic downturn in the U.S. has obviously had a negative effect on the U.S. casual dining industry and The Keg is not immune to that. However, relative to our competitors in the U.S., we remain satisfied with our position though the current difficulties and believe we are well positioned for the future.”

Royalty income increased by $224,000 or 5.5% to $4,334,000 for the quarter and by $452,000 or 5.4% to $8,822,000 year to date, as a result of the increase in gross sales.

Earnings before income taxes increased by 2.6% to 32.0 cents/Fund unit from 31.2 cents/Fund unit during the quarter and by 1.3% to 64.8 cents/Fund unit from 64.0 cents/Fund unit year to date. Distributable cash available to pay distributions to Fund unitholders increased by 1.6% to 31.6 cents/Fund unit from 31.1 cents/Fund unit for the quarter, and by 1.3% to 64.6 cents/Fund unit from 63.8 cents/Fund unit year to date. The Fund has paid distributions of 32.0 cents/Fund unit during the quarter and 63.3 cents/Fund unit year to date.

FINANCIAL HIGHLIGHTS

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                              Apr. 1        Apr.1       Jan. 1        Jan.1
($000's except            to Jun. 30,  to Jun. 30,  to Jun. 30,  to Jun. 30,
 per unit amounts)              2008         2007         2008         2007
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Restaurants in the
 Royalty Pool                     96           95           96           95

Gross sales reported by
 Keg restaurants in the
 Royalty Pool              $ 107,690    $ 100,984    $ 219,240    $ 206,224
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Royalty income               $ 4,334      $ 4,110      $ 8,822      $ 8,370
Partnership expenses             (81)         (93)        (180)        (195)
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Partnership earnings           4,253        4,017        8,642        8,175
KRL's interest                (2,033)      (1,835)      (4,090)      (3,761)
                         ---------------------------------------------------
Equity income                  2,220        2,182        4,552        4,414
Interest income                1,075        1,077        2,152        2,137
                         ---------------------------------------------------
Total income                   3,295        3,259        6,704        6,551
Interest and
 financing expenses             (192)        (232)        (412)        (460)
                         ---------------------------------------------------
Earnings before
 income taxes                $ 3,103      $ 3,027      $ 6,292      $ 6,091
                         ---------------------------------------------------
                         ---------------------------------------------------
Net earnings                 $ 2,903      $ 1,252      $ 6,442      $ 4,316
                         ---------------------------------------------------
                         ---------------------------------------------------
Distributable cash           $ 3,065      $ 3,022      $ 6,264      $ 6,075
                         ---------------------------------------------------
                         ---------------------------------------------------
Distributions paid           $ 3,100      $ 2,881      $ 6,142      $ 5,563
                         ---------------------------------------------------
                         ---------------------------------------------------

Earnings before income
 taxes per Fund unit          $ .320       $ .312       $ .648       $ .640
                         ---------------------------------------------------
                         ---------------------------------------------------
Earnings per Fund unit(1)     $ .299       $ .129       $ .664       $ .453
                         ---------------------------------------------------
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Distributable cash
 per Fund unit(1)             $ .316       $ .311       $ .646       $ .638
                         ---------------------------------------------------
                         ---------------------------------------------------
Distributions paid per
 Fund unit(2)                 $ .320       $ .297       $ .633       $ .585
                         ---------------------------------------------------
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Payout Ratio(1)                101.2%        95.3%        98.1%        91.5%
                         ---------------------------------------------------
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(1) All per unit amounts are calculated based on the weighted average number
    of Fund units outstanding, which are those units held by public
    unitholders during the respective period.

(2) Net earnings for the three months ended June 30, 2008, reflect the
    non-cash future income tax expense of $200,000 and for the six months 
    ended June 30, 2008, the non-cash future income tax recovery of 
    $150,000.

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

The Keg Royalties Income Fund (TSX:KEG.UN) is a limited purpose, open-ended trust established under the laws of the Province of Ontario that, through The Keg Rights Limited Partnership, owns certain trademarks and other related intellectual property used by Keg Restaurants Ltd. (“KRL”). In exchange for use of those trademarks, KRL pays the Fund a royalty of 4% of gross sales of Keg restaurants included in the royalty pool. Vancouver-based Keg Restaurants Ltd. is the leading operator and franchisor of the steakhouse restaurants in Canada and has a substantial presence in select regional markets in the United States.

Vancouver-based Keg Restaurants Ltd. is the leading operator and franchisor of steakhouse restaurants in Canada and has a substantial presence in select regional markets in the United States. KRL continues to operate The Keg restaurant system and expand that system through the addition of both corporate and franchised Keg steakhouses. Keg Restaurants Ltd. has been named one of the “50 Best Employers in Canada” for the past six years by the Globe and Mail’s Report on Business Magazine. For more information on our brand, visit www.kegsteakhouse.com

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 those relating to the Keg’s ability to continue to realize historical same store sales growth, changes in market and existing competition, new 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 may not be offered or sold in the United States absent registration or an application for exemption from the registration requirement under U.S. securities laws.

The Trustees of the Fund have approved the contents of this press release.