Winmark Corporation (WINA): Business Model Canvas [Dec-2025 Updated]

You're digging into business models that truly generate cash without tying up capital, and honestly, the structure Winmark Corporation runs is defintely one of the cleanest I've seen in my two decades analyzing firms. Forget owning the heavy assets; this is a masterclass in asset-light franchising, built almost entirely on recurring royalty streams from over 1,377 stores as of Q3 2025, all while championing the circular economy. With cash reserves topping US$39.7 million and a near-perfect 99% franchise renewal rate, this model isn't just weathering economic shifts-it's built to thrive. Keep reading below to see the precise breakdown of the nine building blocks powering this high-margin machine.

Winmark Corporation (WINA) - Canvas Business Model: Key Partnerships

You're looking at the engine of Winmark Corporation (WINA)'s asset-light model, which is fundamentally built on the strength and satisfaction of its independent operators. As of late 2025, the network is anchored by 1,377 independent franchise owners across North America. This network is the primary source of royalty revenue, which drives the company's high-margin profile, with a franchise renewal rate hitting 99% for the first three quarters of 2025, showing defintely strong operator alignment.

The total franchise count is distributed across Winmark's core brands, which represent the core of these key partnerships:

This structure means Winmark Corporation's success is directly tied to the performance and commitment of these 1,377 entrepreneurs.

The company solidifies its market position and commitment to sustainability through several high-profile strategic alliances:

• Strategic brand partnerships with USA Hockey, where Winmark and its brands serve as the Official Resale Partner.
• Official Resale Partner agreements with Rawlings Sporting Goods, Inc. and Easton bats, primarily through the Play It Again Sports brand, focusing on extending equipment life.
• Official Resale Partner agreements with Elan, the skiing experience brand, supporting circularity for winter sports gear.
• Official Resale Partner agreements with Roland Corporation and BOSS, executed through the Music Go Round retail chain to promote instrument circularity.

Operational consistency across this large, distributed network relies heavily on technology partnerships. Winmark Corporation provides franchisees with its proprietary point-of-sale (POS) and software systems, known as the Data Recycling System software. This system includes essential modules for inventory management, cash management, and customer information management, along with hardware like touch screen monitors and barcode scanners, which franchisees purchase directly from Winmark.

For the Play It Again Sports system, Winmark Corporation also maintains relationships with major vendors for the sale of new product to franchisees, which include Adidas, Wilson Sporting Goods, Champro Sports, Rawlings/Easton, CCM Hockey, and Bauer Hockey.

Regarding physical expansion, the development of new franchise locations is managed internally through dedicated support roles rather than explicitly naming external real estate brokers in recent reports. Once a franchisee secures financing and a lease, they are paired with a New Store Development Manager who assists through the stocking-up and grand opening phases. This internal team manages the critical transition from site selection to operational launch.

Finance: review Q4 2025 franchise award pipeline against 2026 store opening projections by next Tuesday.

Winmark Corporation (WINA) - Canvas Business Model: Key Activities

Developing and protecting five resale retail brand concepts (IP)

Winmark Corporation champions and guides entrepreneurs operating five award-winning resale franchises: Plato's Closet®, Once Upon A Child®, Play It Again Sports®, Style Encore®, and Music Go Round®. The company's asset-light model relies on the strength of these Intellectual Property (IP) brands.

As of September 27, 2025, there were 1,377 franchises in operation across these brands. The company maintains over 2,800 available territories for future expansion. In a specific instance related to IP protection and asset consolidation, Winmark reacquired the franchise rights to eleven Play It Again Sports stores in June 2022, paying consideration of $3.54 million, which are now recorded as intangible assets.

Providing comprehensive training and operational support to franchisees

The company focuses on supporting franchise partners to enhance their revenue generation. Franchisee satisfaction appears high, with the company successfully renewing 60 out of 61 franchise agreements available for renewal in the first six months of 2025, resulting in a renewal rate of 99%.

The operational focus includes supporting franchisees in multi-channel sales strategies. The company has developed proprietary e-commerce platforms for the Music Go Round, Play It Again Sports, and Style Encore brands to elevate business opportunities.

Managing the collection of royalty and franchise fees

Winmark Corporation recognizes revenue by collecting royalties based on a percentage of retail store gross sales and recognizing initial franchise fees over the estimated life of the franchise once the store opens.

Financial results for fee collection in 2025 show the following:

Royalty revenue showed growth, increasing 2.9% year-over-year in Q1 2025 and rising 6.6% in Q3 2025. Franchise fees saw a slight dip in Q1 2025 from $364,500 to $332,100.

Continuous enhancement of proprietary e-commerce and POS technology

The asset-light model is supported by proprietary technology, though this area also involves expense management. Selling, general, and administrative (SG&A) expenses rose in Q1 2025, partly driven by non-recurring expenses related to software licenses.

The shift away from direct merchandise sales is evident in the Q1 2025 figures:

• Merchandise Sales (Q1 2025): $941,300.
• Merchandise Sales (Prior Period): $1.11 million.

This reduction in merchandise sales is explicitly linked to decreased technology purchases by franchisees.

Strategic capital allocation, including special dividends and share buybacks

Winmark Corporation demonstrates a commitment to returning value to shareholders through dividends and buybacks, funded by strong cash generation from operations. Cash provided by operations was $15.08 million in Q1 2025.

Key capital return activities approved in late 2025 include:

• Quarterly Cash Dividend: Approved at $0.96 per share, payable December 1, 2025.
• Special Cash Dividend: Approved at $10.00 per share, payable December 1, 2025.
• Total Special Dividend Amount: Approximately $35.6 million, financed by cash on hand.
• Share Repurchases: 7,383 shares were repurchased during Q1 2025.

The company has an existing Equity Buyback Plan that was announced on February 24, 2011.

For context on the quarterly dividend progression, here is the recent history:

The quarterly dividend was previously $0.90 per share before being raised to $0.96 per share in Q2/Q3 2025.

Finance: draft 13-week cash view by Friday.

Winmark Corporation (WINA) - Canvas Business Model: Key Resources

The Key Resources for Winmark Corporation center on its intangible assets and the structure of its franchise relationships, which enable a high-margin, asset-light operation.

The foundation is the Portfolio of five nationally recognized resale retail brands, which provide market presence and established consumer trust.

• Plato's Closet®
• Once Upon A Child®
• Play It Again Sports®
• Style Encore®
• Music Go Round®

The scale of this network is significant; as of September 27, 2025, Winmark Corporation had 1,377 franchises in operation across North America and Canada. This network is supported by over 2,800 available territories.

Another critical resource is the Proprietary software and technology platforms for store operations, which support the franchise network.

The legal framework supporting the model is built on Strong intellectual property (IP) and franchise agreements. These agreements are structured with 10-year terms. Franchisee commitment is high, evidenced by an overall franchise renewal rate of 99% for the first three quarters of 2025, and a 10-year renewal rate of 98.7%.

The Experienced management team focused on asset-light model translates directly into financial metrics. The company reported an EBITDA margin of 67%, calculated as $55.1 million divided by $82.3 million. For the first three quarters of 2025, Winmark Corporation posted total revenue of $57.35 million and a resulting profit margin of 55%.

Finally, the balance sheet provides a buffer and funding source in the form of Cash reserves exceeding US$39.7 million as of Q3 2025. This figure is contextualized by the Q1 2025 cash position of $21,968,800 as of March 29, 2025.

Here's a quick look at the franchise network scale and financial strength near the reporting date:

The initial franchise fee for an initial store in the U.S. as of December 28, 2024, was $25,000.

Winmark Corporation (WINA) - Canvas Business Model: Value Propositions

For Franchisees: Proven, high-margin, low-capital-intensity business model

Winmark Corporation offers a business model where franchisees operate the stores, minimizing the capital intensity on the franchisor side, which was further evidenced by the decision in May 2021 to run-off its equipment leasing portfolio, which previously involved capital investment in assets. The structure relies on franchisees paying weekly continuing fees (royalties) generally ranging from 4% to 5% of gross sales. Franchisees also pay an annual marketing fee of $1,500 and are required to spend 5% of their gross sales for local advertising and promotion. As of the first quarter of 2025, Winmark Corporation supported 1,363 franchises operating under its brands.

For Customers: Access to affordable, quality, gently used merchandise

The core value for customers is access to high-quality used merchandise at substantial savings compared to the price of new goods. Winmark Corporation champions a model where customers can buy and sell locally sourced, quality used products across its brands, which include Plato's Closet®, Once Upon A Child®, Play It Again Sports®, Style Encore®, and Music Go Round®.

For Society: Leadership in the circular economy and sustainability

Winmark Corporation is positioned as a leader in the circular economy, providing a tangible way for consumers to reduce waste. The cumulative impact reported is significant:

• 2,049,132,929 items recycled since 2010.
• 185 million items recycled per year.
• 510 thousand items recycled per day.
• 6 items recycled per second.

This resale activity directly counters the environmental impact of new production, as the fashion industry contributes 8% of the world's greenhouse gas emissions, and Americans send about 21 billion pounds of textile waste to landfills annually.

Comprehensive operational support and training for new entrepreneurs

Winmark Corporation emphasizes a high level of support for its franchise partners. Every franchisee must attend the company's training program, regardless of prior experience, and is required to attend new owner orientation training shortly after signing the franchise agreement. The company continues to enhance its model by providing franchisees with the technology and tools to evolve towards being a multi-channel retailer.

Counter-cyclical business appeal during economic downturns

The resale model inherently appeals during periods of economic pressure, as consumers prioritize value and savings. While the company noted lower growth in the second half of 2023, its full-year 2024 revenue was $81,289,100, with net income of $39,954,200. For the first quarter of 2025, the company demonstrated continued financial strength with total revenue at $21.9 million and net income increasing to $9.96 million.

The financial structure supporting the network as of late 2024 and early 2025 is detailed below:

The Canadian franchise fee structure for 2025 also provides a concrete data point for new entrepreneurs considering international expansion, with an initial store fee set at $36,000CAD.

Winmark Corporation (WINA) - Canvas Business Model: Customer Relationships

Winmark Corporation's relationship with its customer base, primarily its franchisees, is built on a foundation of deep, structured support and long-term commitment. This approach is central to maintaining the high-margin, asset-light nature of the business.

The initial engagement involves a high-touch support model. New owners must attend mandatory initial training, which includes new owner orientation training immediately after signing the franchise agreement, regardless of prior business experience. This training occurs at Winmark Headquarters at Resale University 101, covering The Winmark Way™, which focuses on store operations, financial management, and inventory control.

The relationship is designed for longevity, characterized by long-term, contractual relationships. Franchise agreements typically have an initial term of 10 years, with subsequent 10-year renewal periods. Franchisee satisfaction remains exceptionally high, evidenced by a reported franchise renewal rate of 99% for Q1-Q3 2025. This high retention rate underscores the perceived value of the Winmark partnership.

Operational interaction is streamlined through automated, standardized reporting and royalty collection. Franchisees are required to pay weekly continuing fees, or royalties, which are the primary revenue driver for Winmark Corporation. The system relies on standardized processes to ensure consistency across the network.

The model inherently fosters a community-focused, local store ownership model. Franchisees operate their businesses for themselves, their community, and the next generation, playing key roles in their local economies. For example, in the past year alone, Winmark noted that its brands put over $500 million back into local communities from money spent by consumers purchasing items from franchisees.

Support is continuous, involving ongoing operational consulting and marketing guidance. After signing, franchisees are paired with a Marketing Manager who works closely through the grand opening, helping to set up websites and social media. Furthermore, Winmark provides over 3,000 support visits each year to franchisees to help them improve operations and grow their businesses.

Here is a look at key quantitative aspects of the Winmark franchise relationship as of late 2025:

The support structure includes specific training milestones and ongoing resources:

• Mandatory attendance at Resale University 101 for basic training.
• Guidance from a dedicated Training Manager through the buildout process.
• Assistance with business entity setup and store floorplan design.
• Marketing Manager support for grand opening and long-term strategy execution.
• Training on proprietary systems like Winmark Connect reporting.

Winmark Corporation (WINA) - Canvas Business Model: Channels

You're looking at how Winmark Corporation (WINA) gets its value proposition-a sustainable, value-oriented resale experience-out to its customers and how it manages its franchise network. The channels are heavily weighted toward physical locations, but the digital layer is definitely growing in importance for marketing and sales support.

The primary channel remains the physical store footprint, which is substantial and geographically diverse across North America. This brick-and-mortar presence is the core transaction point for the buy, sell, and trade model. The corporate structure supports this by focusing on brand development and providing the tools for franchisees to operate effectively.

The company is actively enhancing its multi-channel capabilities. For instance, three of the five resale franchise brands-Play It Again Sports, Music Go Round, and Style Encore-have expanded into e-commerce platforms over the last decade. This digital push isn't just about direct sales; it's positioned as a marketing function to increase brand visibility and drive consumers into the local stores.

Here's a quick look at the scale of the physical channel as of the latest reported quarter:

The direct franchise development team is crucial for expanding this channel. They focus on recruiting owners who meet specific criteria, such as having sufficient net worth and prior business experience, and who intend to be integrally involved in management. The health of this recruitment pipeline is reflected in the franchise fees, which were reported at $332,100 for Q1 2025, a slight dip from the prior period's $364,500.

Franchisees are also key distributors of digital outreach, which feeds back into the physical channel. They use various digital tools to connect with local customers. This decentralized digital effort complements the corporate-level e-commerce platforms.

The corporate channels primarily serve two groups: franchisees needing support and financial stakeholders needing transparency. For franchisees, the corporate website provides access to technology, tools, and training to evolve into multi-channel retailers. For investors, the corporate website hosts investor relations, detailing financial performance.

Consider the financial data flowing through the corporate channel in Q3 2025:

• Total Revenue: $22.63M (+5.2% Year-over-Year)
• Royalty Revenue: $20.91M (+7.2% Year-over-Year)
• Income from Operations: $14.92M (maintaining an ~66% EBIT margin)
• Regular Quarterly Dividend: $0.96 per share maintained
• Special Dividend Approved: $10.00 per share (~$35.6M total) payable December 1, 2025

Franchisees actively use these digital methods to drive local traffic:

• Social media platforms like Facebook and Instagram.
• Third-party e-commerce platforms, such as Shopify.
• Marketplaces like eBay.

Winmark Corporation continues to enhance its franchise model by providing technology and training to support multi-channel operations.

Winmark Corporation (WINA) - Canvas Business Model: Customer Segments

Winmark Corporation targets aspiring entrepreneurs and small business owners looking to enter the resale market through franchising. As of the third quarter of 2025, the network included 1,377 stores operating under its various brands, up from 1,350 stores at the beginning of the year. The company supports this growth by highlighting over 2,800 available territories across the United States and Canada for new franchisees. Franchisee satisfaction remains high, with a renewal rate of 99% reported for the first three quarters of 2025.

The core of the customer base for the franchise side is the entrepreneur seeking a proven model. Here's a look at the scale of the existing business units as of late 2025, based on the latest reported data from 2024 and Q3 2025 figures:

The end-consumer segments are diverse, united by the value proposition of the resale model across the five distinct retail niches. These customers are drawn to the company's mission to provide Resale for Everyone®.

• Aspiring entrepreneurs and small business owners (franchisees) looking to start a business with established brand support.
• Value-conscious consumers seeking high-quality apparel and gear at substantial savings from new merchandise prices.
• Millennials and Gen Z prioritizing sustainable and secondhand shopping, contributing to the circular economy; by August 2025, Winmark brands reached 2 Billion items recycled.
• Parents, teens, and athletes who utilize the specific offerings of Plato's Closet, Once Upon A Child, Play It Again Sports, Style Encore, and Music Go Round.
• Existing franchisees seeking to open additional units, supported by over 2,800 available territories.

For the consumer, the appeal is tangible savings; for example, the average store in 2024 generated average gross sales of $1,291,903. The top quartile of stores achieved average gross sales of $1,998,918 in 2024.

Winmark Corporation (WINA) - Canvas Business Model: Cost Structure

You're looking at the core expenses Winmark Corporation incurs to keep its franchise support engine running and manage its transition away from legacy business lines. Honestly, for a franchisor, the biggest costs are usually people and technology to support the network.

The Selling, General, and Administrative (SG&A) expenses are a key area to watch. For the first quarter of 2025, these expenses rose 9.1% to $7.43 million. This increase was noted as being driven by non-recurring expenses related to software licenses, which you'll want to track to see if it normalizes. For context on the scale, the full year 2024 SG&A was $24,944,200.

Capital expenditures (CapEx) are minimal, which is typical for an asset-light franchisor model. The figure you noted for 2024 was only $195,000. This low level of investment in fixed assets suggests the primary capital deployment is focused on intangible assets like technology and brand development, rather than physical plant.

The cost structure is heavily influenced by supporting the franchise network. This includes the costs associated with franchisee support, training, and technology development. For example, franchisees are required to pay an annual marketing fee of $1,500, and they must spend 5% of their gross sales for advertising and promoting their franchised store. Furthermore, every new owner must attend training, which is a direct cost to Winmark Corporation.

Financing costs are relatively controlled. Interest expense on corporate borrowings decreased to $613,900 in Q1 2025, down from $737,700 in the prior year period, reflecting lower average corporate borrowings.

A significant, but fading, cost factor relates to the run-off of the legacy equipment leasing portfolio. The company made the decision in May 2021 to stop soliciting new leasing customers and pursue an orderly run-off. By mid-2025, the company anticipated that leasing income net of leasing expense would be lower during the remaining quarters of 2025 compared to the last two quarters of 2024, as the run-off is substantially complete.

Here's a quick look at some of the key expense line items for comparison:

You should also keep an eye on the ongoing operational support costs, which include:

• Ongoing small business consulting via field operations managers.
• Tech support for proprietary and third-party software.
• Providing professional marketing and merchandising materials.
• Costs associated with new owner orientation training.

Finance: draft 13-week cash view by Friday.

Winmark Corporation (WINA) - Canvas Business Model: Revenue Streams

You're looking at how Winmark Corporation brings in its money, which is heavily weighted toward its asset-light franchise model. Honestly, the structure is designed for high margins, which is why you see those impressive profitability numbers, even as the legacy leasing business winds down.

The primary engine for Winmark Corporation is definitely the recurring revenue from its established franchise network. For the first quarter of 2025, royalty revenues hit $17.8 million. That number reflects the health of the system, which, as of the end of Q1 2025, included 1,363 stores operating under its brands. By the end of Q3 2025, that royalty stream had grown to $22.59 million for that single quarter.

New store growth feeds the top line through initial franchise fees. For Q1 2025, the income from these new store openings was $332,100. That was a slight dip from the prior period, suggesting you should watch the pace of new unit development closely as a leading indicator.

The legacy equipment leasing portfolio is nearing its end, but it still contributed. Income from the run-off of this portfolio for the first half of 2025 (H1 2025) amounted to $2.3 million. It's important to note that a significant portion of the Q1 2025 leasing income, about $2.2 million of the $2.3 million recognized, was a one-time boost from settling customer litigation. Management has signaled this run-off is substantially complete, so you shouldn't expect this stream to contribute much going forward.

Other revenue sources include merchandise sales and software license fees paid by franchisees. For instance, merchandise sales in Q1 2025 were $941,300, down from $1.11 million the year prior, often tied to technology purchases by the store owners. Software license fees are bundled into contract liabilities along with initial franchise fees.

Looking at the cumulative performance, the total revenue for the first three quarters of 2025 reached $57.35 million. This compares to $54.56 million for the same period in 2024. Here's a quick breakdown of the key revenue components we have data for across the first half of the year:

The reliance on the franchise model means that the revenue mix is heavily skewed toward recurring royalties. You can see that in the structure of the business, which prioritizes high-margin, predictable cash flow over transactional sales.

• Royalty revenues are the primary stream, representing the core economic engine.
• Initial franchise fees fund new unit expansion and are inherently lumpy.
• Leasing income is actively being run off, reducing its future impact.
• Merchandise sales and software fees are secondary, supporting franchisee operations.

To be fair, the Q1 2025 total revenue of $21.92 million included that one-time leasing benefit, so the underlying royalty growth rate is what you really need to track for sustainable performance.