WINMARK CORP
For the period ended Sep 27, 2025. Filed Oct 15, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 27, 2025 · Filed Oct 15, 2025
WINA$265.23-1.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-28; filed 2025-07-15.
0000908315-25-000028
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-27; filed 2025-10-15.
0000908315-25-000034
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 72 previous paragraphs and 72 current paragraphs.
38 unchanged; 31 reworded; 3 added; 3 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 2 previous and 2 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (3)
Current report
Comparison of Nine Months Ended September 27, 2025 to Nine Months Ended September 28, 2024
Current report
Franchise fees of $1.1 million for the first nine months of 2025 were comparable to $1.2 million for the first nine months of 2024.
Current report
Segment Comparison of Nine Months Ended September 27, 2025 to Nine Months Ended September 28, 2024
Removed paragraphs (3)
Previous report
Comparison of Six Months Ended June 28, 2025 to Six Months Ended June 29, 2024
Previous report
Franchise fees of $0.7 million for the first six months of 2025 were comparable to $0.7 million for the first six months of 2024.
Previous report
Segment Comparison of Six Months Ended June 28, 2025 to Six Months Ended June 29, 2024
Reworded paragraphs (31)
Previous wording
Winmark – the Resale Company is focused on sustainability and small business formation. As of June 28, 2025, we had 1,371 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.
Current wording
Winmark – the Resale Company is focused on sustainability and small business formation. As of September 27, 2025, we had 1,377 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.
Previous wording
Our most significant source of franchising revenue is royalties received from our franchisees. During the first six months of 2025, our royalties increased $1.4 million or 4.0% compared to the first six months of 2024.
Current wording
Our most significant source of franchising revenue is royalties received from our franchisees. During the first nine months of 2025, our royalties increased $2.8 million or 5.1% compared to the first nine months of 2024.
Previous wording
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 six months of 2025, selling, general and administrative expenses increased $1.0 million, or 7.4% compared to the first six months of 2024.
Current wording
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 nine months of 2025, selling, general and administrative expenses increased $2.1 million, or 11.0% compared to the first nine months of 2024.
Previous wording
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 six months ended June 28, 2025:
Current wording
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 nine months ended September 27, 2025:
Previous wording
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 six months of 2025, we renewed 60 of the 61 franchise agreements available for renewal.
Current wording
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 nine months of 2025, we renewed 89 of the 90 franchise agreements available for renewal.
Previous wording
In May 2021, we made the decision to no longer solicit new leasing customers and pursue an orderly run-off of our middle-market leasing portfolio. Leasing income net of leasing expense for the first six months of 2025 was $2.4 million compared to $1.3 million in the first six months of 2024. $2.2 million of the $2.4 million of leasing income for the first six months of 2025 was related to the settlement of outstanding customer litigation. The run-off of our leasing portfolio is now substantially complete and we anticipate that leasing income net of leasing expense will be lower during the remaining quarters of 2025 compared to the last two quarters of 2024.
Current wording
In May 2021, we made the decision to no longer solicit new leasing customers and pursue an orderly run-off of our middle-market leasing portfolio. Leasing income net of leasing expense for the first nine months of 2025 was $2.4 million compared to $1.6 million in the first nine months of 2024. $2.2 million of the $2.4 million of leasing income for the first nine months of 2025 was related to the settlement of outstanding customer litigation. The run-off of our leasing portfolio is now substantially complete and we anticipate that we will have no leasing income to recognize after the fourth quarter of 2025.
Previous wording
Revenues for the quarter ended June 28, 2025 totaled $20.4 million compared to $20.1 million for the comparable period in 2024.
Current wording
Revenues for the quarter ended September 27, 2025 totaled $22.6 million compared to $21.5 million for the comparable period in 2024.
Previous wording
Royalties increased to $18.7 million for the second quarter of 2025 from $17.8 million for the second quarter of 2024, a 5.0% increase. The increase is primarily from having additional franchise stores and from higher franchise retail sales in the second quarter of 2025 compared to the same period in 2024.
Current wording
Royalties increased to $20.9 million for the third quarter of 2025 from $19.5 million for the third quarter of 2024, a 7.2% increase. The increase is primarily from higher franchise retail sales and from having additional franchise stores in the third quarter of 2025 compared to the same period in 2024.
Previous wording
Franchise fees of $0.3 million for the second quarter of 2025 were comparable to $0.4 million for the second quarter of 2024.
Current wording
Franchise fees of $0.4 million for the third quarter of 2025 were comparable to $0.5 million for the third quarter of 2024.
Previous wording
Leasing income decreased to $46,600 for the second quarter of 2025 compared to $524,400 for the same period in 2024. The decrease is primarily due to a decrease in operating lease income when compared to last year.
Current wording
Leasing income decreased to $46,600 for the third quarter of 2025 compared to $316,200 for the same period in 2024. The decrease is due to our nearing completion of the portfolio runoff.
Previous wording
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 $0.8 million for the second quarter of 2025 compared to $0.9 million in the same period of 2024. The decrease is due to a decrease in buying group and technology purchases by our franchisees.
Current wording
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 of $0.7 million for the third quarter of 2025 were comparable to $0.7 million in the same period of 2024.
Previous wording
Cost of merchandise sold includes in-bound freight and the cost of merchandise associated with Direct Franchisee Sales. Cost of merchandise sold decreased to $0.8 million for the second quarter of 2025 compared to $0.9 million in the same period of 2024. The decrease is due to a decrease in Direct Franchise Sales discussed above. Cost of merchandise sold as a percentage of Direct Franchisee Sales for the second quarter of 2025 and 2024 was 95.4% and 93.0%, respectively.
Current wording
Cost of merchandise sold includes in-bound freight and the cost of merchandise associated with Direct Franchisee Sales. Cost of merchandise sold of $0.7 million for the third quarter of 2025 was comparable to $0.7 million in the same period of 2024. Cost of merchandise sold as a percentage of Direct Franchisee Sales for the third quarter of 2025 and 2024 was 95.6% and 94.3%, respectively.
Previous wording
Selling, general and administrative expenses increased 5.6% to $6.6 million in the second quarter of 2025 compared to $6.2 million in the same period of 2024. The increase was primarily due to an increase in technology and compensation related expenses.
Current wording
Selling, general and administrative expenses increased 19.0% to $7.0 million in the third quarter of 2025 compared to $5.9 million in the same period of 2024. The increase was primarily due to an increase in compensation related expenses and the timing of advertising production expense.
Previous wording
Interest expense decreased to $0.6 million for the second quarter of 2025 compared to $0.7 million for the second quarter of 2024. The decrease is primarily due to lower average borrowing when compared to the same period last year.
Current wording
Interest expense decreased to $0.6 million for the third quarter of 2025 compared to $0.7 million for the third quarter of 2024. The decrease is primarily due to lower average borrowing when compared to the same period last year.
Previous wording
The provision for income taxes was calculated at an effective rate of 16.6% and 17.1% for the second quarter of 2025 and 2024, respectively. The rate for both periods were impacted by tax benefits on the exercise of non-qualified stock options.
Current wording
The provision for income taxes was calculated at an effective rate of 23.8% and 23.9% for the third quarter of 2025 and 2024, respectively.
Previous wording
Revenues for the first six months of 2025 totaled $42.3 million compared to $40.2 million for the comparable period in 2024.
Current wording
Revenues for the first nine months of 2025 totaled $65.0 million compared to $61.7 million for the comparable period in 2024.
Previous wording
Royalties increased to $36.4 million for the first six months of 2025 from $35.0 million for the first six months of 2024, a 4.0% increase. The increase is primarily from having additional franchise stores and from higher franchise retail sales in the first six months of 2025 compared to the same period in 2024.
Current wording
Royalties increased to $57.3 million for the first nine months of 2025 from $54.6 million for the first nine months of 2024, a 5.1% increase. The increase is primarily from higher franchise retail sales and from having additional franchise stores in the first nine months of 2025 compared to the same period in 2024.
Previous wording
Leasing income increased to $2.4 million for the first six months of 2025 compared to $1.4 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.
Current wording
Leasing income increased to $2.4 million for the first nine months of 2025 compared to $1.7 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.
Previous wording
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 $1.7 million for the first six months of 2025 compared to $2.0 million in the same period of 2024. The decrease is primarily due to a decrease in technology purchases by our franchisees.
Current wording
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 $2.4 million for the first nine months of 2025 compared to $2.7 million in the same period of 2024. The decrease is primarily due to a decrease in technology purchases by our franchisees.
Previous wording
Cost of merchandise sold includes in-bound freight and the cost of merchandise associated with Direct Franchisee Sales. Cost of merchandise sold decreased to $1.7 million for the first six months of 2025 compared to $1.9 million in the same period of 2024. The decrease is due to a decrease in Direct Franchise Sales discussed above. Cost of merchandise sold as a percentage of Direct Franchisee Sales for the first six months of 2025 and 2024 was 94.8% and 93.3%, respectively.
Current wording
Cost of merchandise sold includes in-bound freight and the cost of merchandise associated with Direct Franchisee Sales. Cost of merchandise sold decreased to $2.3 million for the first nine months of 2025 compared to $2.6 million in the same period of 2024. The decrease is due to a decrease in Direct Franchise Sales discussed above. Cost of merchandise sold as a percentage of Direct Franchisee Sales for the first nine months of 2025 and 2024 was 95.1% and 93.6%, respectively.
Previous wording
Selling, general and administrative expenses increased 7.4% to $14.0 million in the first six months of 2025 compared to $13.1 million in the same period of 2024. The increase was primarily due to a non-recurring expense related to third party software licenses for franchisees and an increase in technology and compensation related expenses.
Current wording
Selling, general and administrative expenses increased 11.0% to $21.1 million in the first nine months of 2025 compared to $19.0 million in the same period of 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.
Previous wording
Interest expense was $1.2 million for the first six months of 2025 compared to $1.5 million for the first six months of 2024. The decrease is primarily due to lower average borrowings when compared to the same period last year.
Current wording
Interest expense was $1.8 million for the first nine months of 2025 compared to $2.2 million for the first nine months of 2024. The decrease is primarily due to lower average borrowings when compared to the same period last year.
Previous wording
The provision for income taxes was calculated at an effective rate of 20.4% and 20.6% for the first six months of 2025 and 2024, respectively.
Current wording
The provision for income taxes was calculated at an effective rate of 21.7% and 21.8% for the first nine months of 2025 and 2024, respectively.
Previous wording
The franchising segment’s operating income for the second quarter of 2025 increased to $13.0 million from $12.6 million for the second quarter of 2024. The increase in segment contribution was due to increased royalty revenues, partially offset by an increase in selling, general, and administrative expenses.
Current wording
The franchising segment’s operating income for the third quarter of 2025 increased to $14.9 million from $14.8 million for the third quarter of 2024. The increase in segment contribution was due to increased royalty revenues, partially offset by an increase in selling, general, and administrative expenses.
Previous wording
The other operating segment income for the second quarter of 2025 decreased to $42,400 from $428,300 for the second quarter of 2024. The decrease in segment contribution was due to a decrease in leasing income net of leasing expense.
Current wording
The other operating segment income for the third quarter of 2025 decreased to $42,900 from $165,600 for the third quarter of 2024. The decrease in segment contribution was due to a decrease in leasing income.
Previous wording
The franchising segment operating income for the first six months of 2025 increased to $24.4 million from $24.1 million for the first six months of 2024. The increase in segment contribution was due to increased royalty revenues, partially offset by an increase in selling, general and administrative expenses.
Current wording
The franchising segment operating income for the first nine months of 2025 increased to $39.3 million from $38.8 million for the first nine months of 2024. The increase in segment contribution was due to increased royalty revenues, partially offset by an increase in selling, general and administrative expenses.
Previous wording
The other operating segment income for the first six months of 2025 increased to $2.3 million from $1.2 million for the first six months of 2024. The increase in segment contribution was due to the settlement of outstanding customer litigation in the Company’s equipment leasing business.
Current wording
The other operating segment income for the first nine months of 2025 increased to $2.3 million from $1.3 million for the first nine months of 2024. The increase in segment contribution was due to the settlement of outstanding customer litigation in the Company’s equipment leasing business.
Previous wording
We ended the second quarter of 2025 with $28.9 million in cash, cash equivalents and restricted cash compared to $29.4 million in cash, cash equivalents and restricted cash at the end of the second quarter of 2024.
Current wording
We ended the third quarter of 2025 with $39.9 million in cash, cash equivalents and restricted cash compared to $37.3 million in cash, cash equivalents and restricted cash at the end of the third quarter of 2024.
Previous wording
Operating activities provided $24.1 million of cash during the first six months of 2025, compared to $21.6 million provided during the same period last year. The increase in cash provided by operating activities during the first six months of 2025 compared to 2024 was primarily due to an increase in net income and a decrease in non-cash working capital.
Current wording
Operating activities provided $36.4 million of cash during the first nine months of 2025, compared to $33.7 million provided during the same period last year. The increase in cash provided by operating activities during the first nine months of 2025 compared to 2024 was primarily due to an increase in net income and a decrease in non-cash working capital.
Previous wording
Investing activities used $0.1 million of cash during the first six months of 2025, compared to $0.2 million used during the same period last year. The 2025 activities consisted of the purchase of property and equipment.
Current wording
Investing activities used $0.2 million of cash during the first nine months of 2025, compared to $0.2 million used during the same period last year. The 2025 activities consisted of the purchase of property and equipment.
Previous wording
Financing activities used $7.4 million of cash during the first six months of 2025. Our most significant financing activities during the first six months of 2025 consisted of $6.6 million for the payment of dividends and $2.4 million to repurchase 7,944 shares of our common stock; partially offset by $1.6 million of proceeds from exercise of stock options. (See Note 8 — “Shareholders’ Equity (Deficit).”
Current wording
Financing activities used $8.7 million of cash during the first nine months of 2025. Our most significant financing activities during the first nine months of 2025 consisted of $10.0 million for the payment of dividends and $2.4 million to repurchase 7,944 shares of our common stock; partially offset by $3.8 million of proceeds from exercise of stock options. (See Note 8 — “Shareholders’ Equity (Deficit).”