# WINMARK CORP (WINA) Informational only - not investment advice. CIK: 0000908315 SIC: 5900 Retail-Miscellaneous Retail SIC breadcrumb: [Retail Trade](/division/G/) > [Miscellaneous Retail](/major-group/59/) > [SIC 5900 Retail-Miscellaneous Retail](/industry/5900/) Latest 10-K filed: 2026-02-25 SEC page: https://www.sec.gov/edgar/browse/?CIK=908315 Filing source: https://www.sec.gov/Archives/edgar/data/908315/000090831526000007/wina-20251227x10k.htm ## Selected Fundamentals | Metric | Value | Unit | FY | Filed | | --- | ---: | --- | ---: | --- | | Revenue | 86055700 | USD | 2025 | 2026-02-25 | | Net income | 41654100 | USD | 2025 | 2026-02-25 | | Assets | 24884100 | USD | 2025 | 2026-02-25 | ## Financials Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-25. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000908315.json. Derived margins are computed from the extracted annual SEC facts. | Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Revenue | 66,519,900 | 69,757,300 | 72,511,100 | 73,298,900 | 66,061,800 | 78,216,200 | 81,410,800 | 83,243,500 | 81,289,100 | 86,055,700 | | Net income | 22,148,400 | 24,580,500 | 30,125,500 | 32,149,300 | 29,823,300 | 39,919,900 | 39,424,900 | 40,178,100 | 39,954,200 | 41,654,100 | | Operating income | 38,209,300 | 38,805,000 | 41,763,800 | 43,131,100 | 40,211,500 | 51,336,200 | 53,612,800 | 53,280,600 | 52,930,600 | 54,593,900 | | Diluted EPS | 5.11 | 5.66 | 7.26 | 7.84 | 7.72 | 10.48 | 10.97 | 11.04 | 10.89 | 11.30 | | Assets | 48,581,600 | 48,842,000 | 46,663,100 | 61,842,200 | 31,343,200 | 26,899,000 | 30,455,700 | 28,967,700 | 26,844,500 | 24,884,100 | | Stockholders' equity | -12,902,700 | -35,713,500 | -4,808,500 | 12,448,300 | -11,378,700 | -39,083,400 | -61,632,100 | -59,156,100 | -51,046,100 | -53,682,400 | | Cash and cash equivalents | 1,252,900 | 1,073,200 | 2,496,000 | 25,130,300 | 6,659,000 | 11,407,000 | 13,615,600 | 13,361,500 | 12,189,800 | 10,295,700 | | Net margin | 33.30% | 35.24% | 41.55% | 43.86% | 45.14% | 51.04% | 48.43% | 48.27% | 49.15% | 48.40% | | Operating margin | 57.44% | 55.63% | 57.60% | 58.84% | 60.87% | 65.63% | 65.85% | 64.01% | 65.11% | 63.44% | ## Quarterly Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-04-15. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000908315.json. Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived. | Quarter | End date | Revenue | Net income | Diluted EPS | Method | | --- | --- | ---: | ---: | ---: | --- | | 2022-Q2 | 2022-06-25 | | | 2.54 | reported discrete quarter | | 2022-Q3 | 2022-09-24 | | | 2.93 | reported discrete quarter | | 2023-Q1 | 2023-04-01 | | | 2.49 | reported discrete quarter | | 2023-Q2 | 2023-07-01 | 20,362,200 | 10,368,800 | 2.85 | reported discrete quarter | | 2023-Q3 | 2023-09-30 | 22,317,800 | 11,149,800 | 3.05 | reported discrete quarter | | 2023-Q4 | 2023-12-30 | 20,039,900 | 9,716,800 | | derived Q4 = FY annual - nine-month YTD | | 2024-Q1 | 2024-03-30 | 20,109,500 | 8,819,000 | 2.41 | reported discrete quarter | | 2024-Q2 | 2024-06-29 | 20,120,500 | 10,431,400 | 2.85 | reported discrete quarter | | 2024-Q3 | 2024-09-28 | 21,510,900 | 11,120,700 | 3.03 | reported discrete quarter | | 2024-Q4 | 2024-12-28 | 19,548,000 | 9,583,000 | | derived Q4 = FY annual - nine-month YTD | | 2025-Q1 | 2025-03-29 | 21,919,700 | 9,956,400 | 2.71 | reported discrete quarter | | 2025-Q2 | 2025-06-28 | 20,416,800 | 10,601,200 | 2.89 | reported discrete quarter | | 2025-Q3 | 2025-09-27 | 22,632,900 | 11,136,500 | 3.02 | reported discrete quarter | | 2025-Q4 | 2025-12-27 | 21,086,300 | 9,959,900 | | derived Q4 = FY annual - nine-month YTD | | 2026-Q1 | 2026-03-28 | 20,849,700 | 9,254,700 | 2.50 | reported discrete quarter | ## Macro Cross-References - [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average - [UNRATE](/indicator/UNRATE/): Unemployment Rate - [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate - [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private - [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit - [DFEDTARL](/indicator/DFEDTARL/): Federal Funds Target Range - Lower Limit - [DGS3MO](/indicator/DGS3MO/): Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity - [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity - [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity - [DGS30](/indicator/DGS30/): Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity - [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity - [CPILFESL](/indicator/CPILFESL/): Consumer Price Index for All Urban Consumers: All Items Less Food and Energy - [CPIUFDSL](/indicator/CPIUFDSL/): Consumer Price Index for All Urban Consumers: Food - [CPIENGSL](/indicator/CPIENGSL/): Consumer Price Index for All Urban Consumers: Energy - [CUSR0000SAH1](/indicator/CUSR0000SAH1/): Consumer Price Index for All Urban Consumers: Shelter - [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index - [PCEPILFE](/indicator/PCEPILFE/): Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index - [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities - [T10YIE](/indicator/T10YIE/): 10-Year Breakeven Inflation Rate - [U6RATE](/indicator/U6RATE/): Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons - [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm - [CIVPART](/indicator/CIVPART/): Labor Force Participation Rate - [EMRATIO](/indicator/EMRATIO/): Employment-Population Ratio - [UNEMPLOY](/indicator/UNEMPLOY/): Unemployed - [CE16OV](/indicator/CE16OV/): Employment Level - [ICSA](/indicator/ICSA/): Initial Claims - [JTSJOL](/indicator/JTSJOL/): Job Openings: Total Nonfarm - [JTSQUR](/indicator/JTSQUR/): Quits: Total Nonfarm - [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product - [A191RL1Q225SBEA](/indicator/A191RL1Q225SBEA/): Real Gross Domestic Product: Percent Change from Preceding Period - [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index - [TCU](/indicator/TCU/): Capacity Utilization: Total Index - [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units - [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units - [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade - [PCE](/indicator/PCE/): Personal Consumption Expenditures - [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income - [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate - [M2SL](/indicator/M2SL/): M2 - [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance - [MSPUS](/indicator/MSPUS/): Median Sales Price of Houses Sold for the United States - [HSN1F](/indicator/HSN1F/): New One Family Houses Sold: United States - [RHORUSQ156N](/indicator/RHORUSQ156N/): Homeownership Rate in the United States - [TTLCONS](/indicator/TTLCONS/): Total Construction Spending: Total Construction in the United States - [RRVRUSQ156N](/indicator/RRVRUSQ156N/): Rental Vacancy Rate in the United States - [TOTALSL](/indicator/TOTALSL/): Total Consumer Credit Owned and Securitized - [REVOLSL](/indicator/REVOLSL/): Revolving Consumer Credit Owned and Securitized - [DRCCLACBS](/indicator/DRCCLACBS/): Delinquency Rate on Credit Card Loans, All Commercial Banks - [GDP](/indicator/GDP/): Gross Domestic Product - [GPDI](/indicator/GPDI/): Gross Private Domestic Investment - [GCE](/indicator/GCE/): Government Consumption Expenditures and Gross Investment - [PCEC](/indicator/PCEC/): Personal Consumption Expenditures - [NETEXP](/indicator/NETEXP/): Net Exports of Goods and Services - [GFDEBTN](/indicator/GFDEBTN/): Federal Debt: Total Public Debt - [GFDEGDQ188S](/indicator/GFDEGDQ188S/): Federal Debt: Total Public Debt as Percent of Gross Domestic Product - [FYFSD](/indicator/FYFSD/): Federal Surplus or Deficit - [FGRECPT](/indicator/FGRECPT/): Federal Government Current Receipts - [FGEXPND](/indicator/FGEXPND/): Federal Government: Current Expenditures - [MANEMP](/indicator/MANEMP/): All Employees, Manufacturing - [USCONS](/indicator/USCONS/): All Employees, Construction - [USTRADE](/indicator/USTRADE/): All Employees, Retail Trade - [USFIRE](/indicator/USFIRE/): All Employees, Financial Activities - [USGOVT](/indicator/USGOVT/): All Employees, Government - [AWHAETP](/indicator/AWHAETP/): Average Weekly Hours of All Employees, Total Private - [DGORDER](/indicator/DGORDER/): Manufacturers' New Orders: Durable Goods - [NEWORDER](/indicator/NEWORDER/): Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft - [BUSINV](/indicator/BUSINV/): Total Business Inventories - [EXPGS](/indicator/EXPGS/): Exports of Goods and Services - [IMPGS](/indicator/IMPGS/): Imports of Goods and Services - [IR](/indicator/IR/): Import Price Index (End Use): All Commodities - [PPIFIS](/indicator/PPIFIS/): Producer Price Index by Commodity: Final Demand ## Latest quarter (10-Q) Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/908315/000090831526000017/wina-20260328x10q.htm Extracted between Part I Item 2 and the next Item 3/4 or Part II heading after HTML sanitization. Confidence: high Filing date: 2026-04-15 Report date: 2026-03-28 ITEM 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations ​ Overview ​ Winmark - the Resale Company is focused on sustainability and small business formation. As of March 28, 2026, we had 1,383 franchises operating under the Plato’s Closet, Once Upon A Child, Play It Again Sports, Style Encore and Music Go Round brands. Our business is not capital intensive and is designed to generate consistent, recurring revenue and strong operating margins. ​ The financial criteria that management closely tracks to evaluate current business operations and future prospects include royalties and selling, general and administrative expenses. ​ Our most significant source of revenue is royalties received from our franchisees. During the first three months of 2026, our royalties increased $1.5 million or 8.4% compared to the first three months of 2025. ​ Management continually monitors the level and timing of selling, general and administrative expenses. The major components of selling, general and administrative expenses include compensation and benefits, marketing and advertising, professional services, and occupancy. During the first three months of 2026, selling, general and administrative expenses increased $0.4 million, or 5.8% compared to the first three months of 2025. ​ 11 Table of Contents Management also monitors several nonfinancial factors in evaluating the current business operations and future prospects including franchise openings and closings and franchise renewals. The following is a summary of our net store growth and renewal activity for the first three months ended March 28, 2026: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ AVAILABLE ​ ​ ​ ​ ​ ​ ​ TOTAL ​ ​ ​ ​ ​ TOTAL ​ FOR ​ COMPLETED ​ ​ ​   ​ ​ ​ 12/27/2025   ​ ​ ​ OPENED   ​ ​ ​ CLOSED   ​ ​ ​ 3/28/2026   ​ ​ ​ RENEWAL   ​ ​ ​ RENEWALS   ​ ​ ​ % RENEWED Plato’s Closet 526 3 (1) 528 ​ 8 ​ 8 ​ 100 % Once Upon A Child 441 6 (3) 444 ​ 9 ​ 9 ​ 100 % Play It Again Sports 309 1 (1) ​ 309 ​ 4 ​ 4 ​ 100 % Style Encore 67 — ​ (1) 66 ​ 1 ​ 1 ​ 100 % Music Go Round 35 1 — 36 ​ 1 ​ 1 ​ 100 % Total Franchised Stores 1,378 11 (6) 1,383 23 ​ 23 100 % ​ Renewal activity is a key focus area for management. Our franchisees sign 10-year agreements with us. The renewal of existing franchise agreements as they approach their expiration is an indicator that management monitors to determine the health of our business and the preservation of future royalties. During the first three months of 2026, we renewed 23 of the 23 franchise agreements available for renewal. ​ Our ability to grow our operating income is dependent on our ability to: (i) effectively support our franchise partners so that they produce higher revenues, (ii) open new franchises, and (iii) control our selling, general and administrative expenses. ​ Results of Operations ​ The following table sets forth selected information from our Consolidated Condensed Statements of Operations expressed as a percentage of total revenue: ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​   ​ ​ ​ March 28, 2026   ​ ​ ​ March 29, 2025   ​ ​ ​ ​   ​ ​ ​ ​ ​ ​ ​ Revenue: ​ ​ ​ ​ ​ Royalties 92.4 %   81.1 %   Leasing income — ​ 10.5 ​ Merchandise sales 3.1 ​ 4.3 ​ Franchise fees 1.7 ​ 1.5 ​ Other 2.8 ​ 2.6 ​ Total revenue 100.0 ​ 100.0 ​ ​ ​ ​ ​ ​ ​ Cost of merchandise sold (3.0) ​ (4.1) ​ Selling, general and administrative expenses (37.7) ​ (33.9) ​ Income from operations 59.3 ​ 62.0 ​ Interest expense (3.0) ​ (2.8) ​ Interest and other income 0.6 ​ 0.7 ​ Income before income taxes 56.9 ​ 59.9 ​ Provision for income taxes (12.5) ​ (14.5) ​ Net income 44.4 %   45.4 %   ​ ​ Comparison of Three Months Ended March 28, 2026 to Three Months Ended March 29, 2025 ​ Revenue ​ Revenues for the quarter ended March 28, 2026 totaled $20.8 million compared to $21.9 million for the comparable period in 2025. ​ Royalties and Franchise Fees ​ Royalties increased to $19.3 million for the first three months of 2026 from $17.8 million for the first three months of 2025, an 8.4% increase. The increase is primarily from higher franchise retail sales and, to a lesser extent, having additional franchise stores in the first three months of 2026 compared to the same period in 2025. ​ 12 Table of Contents Franchise fees of $0.3 million for the first three months of 2026 were comparable to $0.3 million for the first three months of 2025. ​ Leasing Income ​ Leasing income decreased to $0.0 million for the first quarter of 2026 compared to $2.3 million for the same period in 2025. Leasing income in the first quarter of 2025 reflected the settlement of customer litigation. As of December 27, 2025, the previously announced run-off of the leasing portfolio was completed and we no longer have any leasing customers or leased assets. ​ Merchandise Sales ​ Merchandise sales include the sale of product to franchisees either through our Computer Support Center or through the Play It Again Sports buying group (together, “Direct Franchisee Sales”). Direct Franchisee Sales decreased to $0.7 million for the first quarter of 2026 compared to $0.9 million in the same period of 2025. The decrease is due to a decrease in technology and buying group purchases by our franchisees. ​ Cost of Merchandise Sold ​ Cost of merchandise sold includes in-bound freight and the cost of merchandise associated with Direct Franchisee Sales. Cost of merchandise sold decreased to $0.6 million for the first quarter of 2026 compared to $0.9 million in the same period of 2025. The decrease was due to the decrease in Direct Franchisee Sales discussed above. Cost of merchandise sold as a percentage of Direct Franchisee Sales for the first quarter of 2026 and 2025 was 94.6% and 94.4%, respectively. ​ Selling, General and Administrative ​ Selling, general and administrative expenses increased 5.8% to $7.9 million in the first quarter of 2026 from $7.4 million in the same period of 2025. The increase was primarily due to an increase in compensation related expenses. ​ Income Taxes ​ The provision for income taxes was calculated at an effective rate of 22.0% and 24.2% for the first quarter of 2026 and 2025, respectively. The decrease is due to tax benefits on the exercise of non-qualified stock options during the first quarter of 2026. ​ Segment Comparison of Three Months Ended March 28, 2026 to Three Months Ended March 29, 2025 ​ Franchising Segment Operating Income ​ The franchising segment’s operating income for the first quarter of 2026 of $12.4 million was up from $11.4 million for the first quarter of 2025. The increase in segment contribution was due to an increase in royalty revenue, partially offset by an increase in selling, general and administrative expenses. ​ Other Operating Segment Income ​ The other operating segment income for the first quarter of 2026 was $0.0 million compared to $2.3 million in the first quarter of 2025. The segment contribution in the first quarter of 2025 reflected the settlement of customer litigation. ​ Liquidity and Capital Resources ​ Our primary sources of liquidity have historically been cash flow from operations and borrowings. The components of the consolidated condensed statements of operations that reduce our net income but do not affect our liquidity include non-cash items for depreciation and amortization and compensation expense related to stock options. ​ We ended the first quarter of 2026 with $19.9 million in cash, cash equivalents and restricted cash compared to $22.0 million in cash, cash equivalents and restricted cash at the end of the first quarter of 2025. ​ Operating activities provided $11.9 million of cash during the first three months of 2026 compared to $15.1 million provided during the first three months of last year. The decrease in cash provided by operating activities in the first three months of 2026 compared to 2025 was primarily due to an increase in non-cash working capital and a decrease in net income. ​ 13 Table of Contents Investing activities used minimal cash during the first three months of 2026. The 2026 activities consisted of the purchase of property and equipment. ​ Financing activities used $2.4 million of cash during the first three months of 2026. Our financing activities during the first three months of 2026 consisted of $3.4 million for the payment of dividends; partially offset by $1.0 million of proceeds from the exercise of stock options. (See Note 8 — “Shareholders’ Equity (Deficit)). ​ As of March 28, 2026, our debt facilities include a Line of Credit with CIBC Bank USA and a Note Agreement with Prudential. These facilities have been and will continue to be used for general corporate purposes, are secured by a lien against substantially all of our assets, contain customary financial conditions and covenants, and require maintenance of minimum levels of debt service coverage and maximum levels of leverage (all as defined within the agreements governing the facilities). As of March 28, 2026, we were in compliance with all of the financial covenants under the Line of Credit and the Note Agreement. ​ The Line of Credit provides for up to $20.0 million in revolving loans and $30.0 million in delayed draw term loans. As of March 28, 2026, we had no revolving loans outstanding, and had delayed draw term loan borrowings totaling $30.0 million that mature in 2029. ​ ​ See Part I, Item 1, Note 9 – “Debt” for more information regarding the Line of Credit and Note Agreement. We expect to generate the cash necessary to pay our expenses and to pay the principal and interest on our outstanding debt from cash flows provided by operating activities and by opportunistically using other means to repay or refinance our obligations as we determine appropriate. Our ability to pay our expenses and meet our debt service obligations depends on our future performance, which may be affected by financial, business, economic, and other factors including the risk factors described under Item 1A of our Form 10-K for the fiscal year ended December 27, 2025 and under Item 1A below. If we do not have enough money to pay our debt service obligations, we may be required to refinance all or part of our existing debt, sell assets, borrow more money or raise equity. In such an event, we may not be able to refinance our debt, sell assets, borrow more money or raise equity on terms acceptable to us or at all. Also, our ability to carry out any of these activities on favorable terms, if at all, may be further impacted by any financial or credit crisis which may limit access to the credit markets and increase our cost of capital. ​ As of the date of this report we believe that the combination of our cash on hand, the cash generated from our business and our Line of Credit will be adequate to fund our planned operations through 2026. ​ Critical Accounting Policies ​ A discussion of our critical accounting policies is contained in our annual report on Form 10-K for the year ended December 27, 2025. There have been no changes to our critical accounting policies from those disclosed on our Form 10-K for the year ended December 27, 2025. ​ Forward Looking Statements ​ The statements contained in this Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” that are not strictly historical fact, including without limitation, the Company’s belief that it will have adequate capital and reserves to meet its current and contingent obligations and operating needs, as well as its disclosures regarding market rate risk are forward looking statements made under the safe harbor provision of the Private Securities Litigation Re [Excerpt truncated for page length; source filing is linked above.] ## Latest 10-K MD&A Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high ITEM 7:     MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ​ The following is management’s discussion and analysis of certain significant factors which have affected our financial position and operating results during the periods included in the accompanying consolidated financial statements and should be read in conjunction with those consolidated financial statements. This section of this 10-K generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. Discussions of 2023 items and year-to-date comparisons between 2024 and 2023 that are not included in this Form 10-K, can be found in ‘Management’s Discussion and Analysis of Financial Condition and Results of Operations’ in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 28, 2024. ​ Overview ​ Winmark – the Resale Company is focused on sustainability and small business formation. As of December 27, 2025, we had 1,378 franchises operating under the Plato’s Closet, Once Upon A Child, Play It Again Sports, Style Encore and Music Go Round brands. Our business is not capital intensive and is designed to generate consistent, recurring revenue and strong operating margins. ​ The financial criteria that management closely tracks to evaluate current business operations and future prospects include royalties and selling, general and administrative expenses. ​ Our most significant source of franchising revenue is royalties received from our franchisees. During 2025, our royalties increased $4.2 million or 5.8% compared to 2024. ​ Management continually monitors the level and timing of selling, general and administrative expenses. The major components of selling, general and administrative expenses include compensation and benefits, marketing & advertising, professional services, and occupancy. During 2025, selling, general and administrative expense increased $3.4 million, or 13.7%, compared to the same period last year. ​ Management also monitors several nonfinancial factors in evaluating the current business operations and future prospects including franchise openings and closings and franchise renewals. The following is a summary of our net store growth and renewal activity for the fiscal year ended December 27, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ AVAILABLE ​ ​ ​ ​ ​ ​ ​ TOTAL ​ ​ ​ ​ ​ TOTAL ​ FOR ​ COMPLETED ​ ​ ​ 12/28/2024 ​ OPENED ​ CLOSED ​ 12/27/2025   ​ RENEWAL ​ RENEWALS ​ % RENEWED ​ Plato’s Closet 515 18 (7) 526 42 41 98 % Once Upon A Child 430 17 (6) 441 44 ​ 44 100 % Play It Again Sports 302 15 (8) 309 18 ​ 17 94 % Style Encore 69 2 (4) 67 8 8 100 % Music Go Round 34 3 (2) 35 4 4 100 % Total Franchised Stores(1) 1,350 55 (27) 1,378 116 114 98 % ​ (1) All stores are owned and operated by franchisees. Winmark does not own or operate any corporate stores. ​ Renewal activity is a key focus area for management. Our franchisees sign 10-year agreements with us. The renewal of existing franchise agreements as they approach their expiration is an indicator that management monitors to determine the health of our business and the preservation of future royalties. In 2025, we renewed 98% of franchise agreements up for renewal. This percentage of renewal has ranged between 98% and 99% during the last three years. ​ Our ability to grow our operating income is dependent on our ability to: (i) effectively support our franchisees so that they produce higher revenues, (ii) open new franchises, and (iii) control our selling, general and administrative expenses. A detailed description of the risks to our business along with other risk factors can be found in Item 1A “Risk Factors”. ​ 14 Table of Contents In May 2021, we made the decision to no longer solicit new leasing customers and will pursue an orderly run-off of our leasing portfolio. Leasing income net of leasing expense for the fiscal year of 2025 was $2.6 million compared to $1.8 million in 2024. $2.2 million of the $2.5 million of leasing income for the fiscal year of 2025 was related to the settlement of outstanding customer litigation. As of December 27, 2025, the run-off of the portfolio was completed as we no longer had any leasing customers or leased assets. See Note 3 – “Leasing Operations” for information regarding the lease portfolio. ​ Results of Operations ​ The following table sets forth selected information from our Consolidated Statements of Operations expressed as a percentage of total revenue and the percentage change in the dollar amounts from the prior period: ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended Fiscal 2025 ​ ​ December 27, ​ December 28, ​ over (under) ​ ​ 2025   ​ ​ ​ 2024   ​ ​ ​ 2024   ​ ​ ​ Revenue: ​ ​ ​ ​ ​ ​ Royalties 88.7 %   88.8 %   5.8 %   Leasing income 3.1 ​ 2.2 ​ 45.3 ​ Merchandise sales 3.8 ​ 4.4 ​ (8.8) ​ Franchise fees 1.8 ​ 1.9 ​ (1.3) ​ Other 2.6 ​ 2.7 ​ 6.1 ​ Total revenue 100.0 ​ 100.0 ​ 5.9 ​ ​ ​ ​ ​ ​ ​ ​ Cost of merchandise sold (3.6) ​ (4.2) ​ (8.1) ​ Selling, general and administrative expenses (33.0) ​ (30.7) ​ 13.7 ​ Income from operations 63.4 ​ 65.1 ​ 3.1 ​ Interest expense (2.8) ​ (3.5) ​ (14.4) ​ Interest and other income 1.1 ​ 1.4 ​ (14.1) ​ Income before income taxes 61.7 ​ 63.0 ​ 3.7 ​ Provision for income taxes (13.3) ​ (13.9) ​ 0.6 ​ Net income 48.4 %   49.1 %   4.6 %   ​ Revenue ​ Revenues for the year ended December 27, 2025 totaled $86.1 million compared to $81.3 million in 2024. ​ Royalties and Franchise Fees ​ Royalties increased to $76.4 million for 2025 from $72.2 million for the same period in 2024, a 5.8% increase. The increase is primarily from higher franchise retail sales and from having additional franchise stores in 2025 compared to 2024. ​ Franchise fees of $1.5 million for 2025 were comparable to $1.5 million for 2024. Franchise fees include initial franchise fees from the sale of new franchises and transfer fees related to the transfer of existing franchises. Franchise fee revenue is recognized over the estimated life of the franchise, beginning when the franchise opens. An overview of retail brand franchise fees is presented in the Operations subsection of the Business section (Item 1). ​ Leasing Income ​ Leasing income increased to $2.6 million in 2025 compared to $1.8 million for the same period in 2024. The increase is primarily due to the settlement of outstanding customer litigation when compared to the same period last year. ​ Merchandise Sales ​ Merchandise sales include the sale of product to franchisees either through our Computer Support Center or through the Play It Again Sports buying group (together, “Direct Franchisee Sales”). Direct Franchisee Sales decreased to $3.3 million in 2025 from $3.6 million in 2024. The decrease is due to a decrease in technology purchases by our franchisees. ​ 15 Table of Contents Cost of Merchandise Sold ​ Cost of merchandise sold includes in-bound freight and the cost of merchandise associated with Direct Franchisee Sales. Cost of merchandise sold decreased to $3.1 million in 2025 from $3.4 million in 2024. The decrease was due to a decrease in Direct Franchisee Sales discussed above. Cost of merchandise sold as a percentage of Direct Franchisee Sales for 2025 and 2024 was 94.6% and 93.8%, respectively. ​ Selling, General and Administrative Expenses ​ Selling, general and administrative expenses increased 13.7% to $28.4 million in 2025 from $24.9 million in 2024. The increase was primarily due to an increase in compensation related expenses and a non-recurring expense related to third-party software licenses for franchisees. ​ Interest Expense ​ Interest expense was $2.4 million in 2025 compared to $2.9 million in 2024. The decrease is primarily due to lower average corporate borrowings when compared to last year. ​ Income Taxes ​ The provision for income taxes was calculated at an effective rate of 21.6% and 22.0% for 2025 and 2024, respectively. The decrease is primarily due to higher tax benefits on the exercise of non-qualified stock options. ​ Segment Comparison of Fiscal Years 2025 and 2024 ​ As of December 27, 2025, we have one reportable operating segment, franchising, and one non-reportable operating segment. The franchising segment franchises value-oriented retail store concepts that buy, sell and trade merchandise. The non-reportable operating segment includes our equipment leasing business. Segment reporting is intended to give financial statement users a better view of how we manage and evaluate our businesses. Our internal management reporting is the basis for the information disclosed for our operating segments. The following tables summarize financial information by segment and provide a reconciliation of segment contribution to income from operations: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​   ​ ​ ​ December 27, 2025   ​ ​ ​ December 28, 2024 Revenue: ​ ​ ​ ​ ​ ​ ​ Franchising ​ $ 83,423,900 ​ $ 79,477,300 ​ Other ​ 2,631,800 ​ 1,811,800 ​ Total revenue ​ $ 86,055,700 ​ $ 81,289,100 ​ ​ ​ ​ ​ ​ ​ ​ ​ Reconciliation to income from operations: ​ ​ ​ ​ ​ ​ ​ Franchising segment contribution ​ $ 52,057,400 ​ $ 51,593,300 ​ Other operating segment contribution ​ 2,536,500 ​ 1,337,300 ​ Total income from operations ​ $ 54,593,900 ​ $ 52,930,600 ​ ​ Revenues are all generated from United States operations other than franchising revenue from Canadian operations of $7.8 million and $7.3 million in each of fiscal 2025 and 2024, respectively. ​ Franchising Segment Operating Income ​ The franchising segment’s 2025 operating income increased by $0.5 million, or 0.9%, to $52.1 million from $51.6 million for 2024. The increase in segment contribution was primarily due to increased royalty revenues, partially offset by an increase in selling, general, and administrative expenses. ​ Other Segment Operating Income ​ The other segment operating income for 2025 increased by $1.2 million, or 89.7%, to $2.5 million from $1.3 million for 2024. The increase in segment contribution was due to the settlement of outstanding customer litigation in the Company’s equipment leasing business. ​ 16 Table of Contents Liquidity and Capital Resources ​ Our primary sources of liquidity have historically been cash flow from operations and borrowings. The components of the Consolidated Statements of Operations that reduce our net income but do not affect our liquidity include non-cash items for depreciation and amortization and compensation expense related to stock options. ​ We ended 2025 with $10.5 million in cash, cash equivalents and restricted cash compared to $12.3 million in cash, cash equivalents and restricted cash at the end of 2024. ​ Operating activities provided $44.9 million of cash during 2025 compared to $42.2 million provided during 2024. The increase in cash provided by operating activities in 2025 was due to an increase in net income and a decrease in non-cash working capital. ​ Investing activities used $0.2 million of cash during 2025 compared to $0.2 million used during 2024. ​ Financing activities used $46.6 million of cash during 2025 compared to $43.0 million used during 2024. During 2025, we paid $49.1 million in cash dividends (including a $10.00 per share special cash dividend), and paid $2.4 million to repurchase 7,944 shares of our common stock; partially offset by $5.0 million of proceeds from the exercise of stock options. (See Note 6 — “Shareholders’ Equity (Deficit)”. ​ We have debt obligations and future operating lease commitments for our corporate headquarters. As of December 27, 2025, we had no other material outstanding commitments. (See Note 12 — “Commitments and Contingencies”). The following table summarizes our significant future contractual obligations at December 27, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payments due by period ​ ​ ​ ​ ​ Less than 1 ​ ​ ​ ​ ​ ​ ​ More than 5 ​ ​   ​ ​ ​ Total   ​ ​ ​ year   ​ ​ ​ 1-3 years   ​ ​ ​ 3-5 years   ​ ​ ​ years Contractual Obligations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Line of Credit/Term loan(1)(3) ​ $ 34,581,900 ​ $ 1,395,500 ​ $ 2,791,000 ​ $ 30,395,400 ​ $ — ​ Notes Payable(2)(3) ​ 32,623,500 ​ ​ 954,000 ​ ​ 31,669,500 ​ ​ — ​ ​ — ​ Operating Lease Obligations ​ 3,452,600 ​ ​ 828,200 ​ ​ 1,725,700 ​ ​ 898,700 ​ ​ — ​ Total Contractual Obligations ​ $ 70,658,000 ​ $ 3,177,700 ​ $ 36,186,200 ​ $ 31,294,100 ​ $ — ​ (1) Includes interest payable monthly at rates ranging from 4.60% to 4.75%. (2) Includes interest payable quarterly at 3.18%. (3) Refer to Part II, Item 8 in this report under Note 7 — “Debt” for additional information regarding long-term debt. ​ Our debt facilities include a Line of Credit with CIBC Bank USA and a Note Agreement with Prudential. These facilities have been and will continue to be used for general corporate purposes, are secured by a lien against substantially all of our assets, contain customary financial conditions and covenants, and require maintenance of minimum levels of debt service coverage and maximum levels of leverage (all as defined within the agreements governing the facilities). As of December 27, 2025, we were in compliance with all of the financial covenants under the Line of Credit and the Note Agreement. ​ The Line of Credit provides for up to $20.0 million in revolving loans and $30.0 million in delayed draw term loans. As of December 27, 2025, we had no revolving loans outstanding, and had delayed draw term loan borrowings totaling $30.0 million that mature in 2029. ​ See Part II, Item 8, Note 7 – “Debt” for more information regarding the Line of Credit and Note Agreement. ​ We expect to generate the cash necessary to pay our expenses and to pay the principal and interest on our outstanding debt from cash flows provided by operating activities and by opportunistically using other means to repay or refinance our obligations as we determine appropriate. Our ability to pay our expenses and meet our debt service obligations depends on our future performance, which may be affected by financial, business, economic, and other factors including the risk factors described under Item 1A of this report. If we do not have enough money to pay our debt service obligations, we may be required to refinance all or part of our existing debt, sell assets, borrow more money or raise equity. In such an event, we may not be able to refinance our debt, sell assets, borrow more money or raise equity on terms acceptable to us or at all. Also, our ability to carry out any of these activities on favorable terms, if at all, may be further impacted by any financial or credit crisis which may limit access to the credit markets and increase our cost of capital. 17 Table of Contents As of the date of this report we believe that the combination of our cash on hand, the cash generated from our business and our Line of Credit and will be adequate to fund our planned operations through 2026. ​ Critical Accounting Policies ​ The Company prepares the consolidated financial statements of Winmark Corporation and Subsidiaries in conformity with accounting principles generally accepted in the United States of America. As such, the Company is required to make certain estimates, judgments and assumptions that it believes are reasonable based on information available. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the periods presented. There can be no assurance that actual results will not differ from these estimates. The critical accounting policies that the Company believes are most important to aid in fully understanding and evaluating the reported financial results include the following: ​ Revenue Recognition — Royalty Revenue and Franchise Fees ​ The Company collects royalties from each retail franchise based on a percentage of retail store gross sales. The Company recognizes royalties as revenue when earned. At the end of each accounting period, royalty amounts due are based on franchisee sales information. As of December 27, 2025, the Company’s royalty receivable was $1,279,600. ​ The Company collects initial franchise fees when franchise agreements are signed and recognizes the initial franchise fees as revenue over the estimated life of the franchise, beginning when the franchise is opened. Franchise fees collected from franchisees but not yet recognized as income are recorded as deferred revenue in the liability section of the consolidated balance sheet. As of December 27, 2025, deferred franchise fee revenue was $7,929,600. ​ Recent Accounting Pronouncements ​ See Note 2, “Significant Accounting Policies — Recently Issued Accounting Pronouncements and Recently Adopted Accounting Pronouncements”. ​