Financial Analysis

12. Commitments and Contingencies: Employee Benefit Plan The Company provides a 401(k) Savings Incentive Plan which covers substantially all employees. The plan provides for matching contributions and optional profit-sharing contributions at the discretion of the Board of Directors. Employee contributions are fully vested; matching and profit sharing contributions are subject to a five-year service vesting schedule. Company contributions to the plan for 2025, 2024 and 2023 were $369,800 , $364,900 and $371,200 , respectively. Litigation From time to time, the Company is exposed to asserted and unasserted legal claims encountered in the normal course of business. Management believes that the ultimate resolution of these matters will not have a material adverse effect on the consolidated financial position or results of operations of the Company. …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

7. Debt: Line of Credit/Term Loan The Company has a Line of Credit with CIBC Bank USA (the Line of Credit) that provides for a $20.0 million revolving loan facility and a $30.0 million delayed draw term facility.The termination date for revolving loans under the Line of Credit is April 12, 2027, and the final maturity of all delayed draw loans under the Line of Credit is April 12, 2029 (with all payments of principal due on such date). As of December 27, 2025, there were no revolving loans outstanding under the Line of Credit, leaving $20.0 million available for additional revolving borrowings. As of December 27, 2025, the Company had delayed draw term loan borrowings totaling $30.0 million under the Line of Credit bearing interest ranging from 4.60% to 4.75%. The Line of Credit has been and will continue to be used for general corporate purposes. The Line of Credit is secured by a lien against substantially all of the Companys assets, contains customary financial conditions and covenants, and requires maintenance of minimum levels of debt service coverage and maximum levels of leverage (all as defined within the Line of Credit). As of December 27, 2025, the Company was in compliance with all of its financial covenants. The Line of Credit allows the Company to choose between two interest rate options in connection with its borrowings on revolving loans. The interest rate options are the Base Rate (as defined) and the SOFR Rate (as defined) plus an applicable margin of 0% and …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

11. Income Taxes: Income from continuing operations before income taxes included the following components: Year Ended December 27, 2025 December 28, 2024 December 30, 2023 Domestic $ 45,313,700 $ 43,982,300 $ 44,672,200 Foreign 7,821,900 7,241,700 6,689,100 Income from continuing operations before taxes $ 53,135,600 $ 51,224,000 $ 51,361,300 Income tax expense in the accompanying consolidated financial statements differed from the expected expense as follows: Year Ended December 27, 2025 (1) December 28, 2024 (2) December 30, 2023 (3) Amount Percent Amount Percent Amount Percent U.S. Federal income tax expense at statutory rate $ 11,158,500 21.0 % $ 10,757,000 21.0 % $ 10,785,900 21.0 % Increase (decrease) attributed to: State and local income taxes 1,326,300 2.4 1,294,200 2.5 1,293,500 2.7 Foreign tax effects Canada: Withholding tax 759,500 1.4 706,100 1.4 665,200 1.3 Effect of cross-border tax laws (369,400) (0.7) (360,900) (0.7) (369,000) (0.7) Tax credits Foreign tax credits (759,500) (1.4) (706,100) (1.4) (665,200) (1.3) Changes in valuation allowances 374,500 0.7 180,000 0.4 (485,700) (0.9) Nontaxable or nondeductible items Stock compensation (1,384,500) (2.6) (1,109,200) (2.2) (958,800) (1.9) Other 252,500 0.5 242,900 0.5 245,600 0.5 Changes in unrecognized tax benefits 186,500 0.4 258,500 0.5 240,100 0.5 Other reconciling items (62,900) (0.1) 7,300 431,600 0.8 Total income tax expense, Effective income tax rate $ 11,481,500 21.6 % $ 11,269,800 22.0 % $ 11,183,200 22.0 …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

10. Operating Leases : As of December 27, 2025, the Company leases its Minnesota corporate headquarters in a facility with an operating lease that expires in December 2029. Our lease includes both lease (fixed payments including rent) and non-lease components (common area or other maintenance costs and taxes) which are accounted for as a single lease component as we have elected the practical expedient to group lease and non-lease components for all leases. The lease provides us the option to extend the lease for two additional five year periods. The lease renewal option is at our sole discretion; therefore, the renewals to extend the lease term are not included in our right of use asset and lease liabilities as they are not reasonably certain of exercise. The weighted average remaining lease term for this lease is 4.0 years and the discount rate is 5.5% . As our lease does not provide an implicit rate, we use our incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments. The Company recognized $1,038,300 , $1,067,400 and $1,171,100 of rent expense for the periods ended December 27, 2025, December 28, 2024 and December 30, 2023, respectively. Maturities of operating lease liabilities is as follows as of December 27, 2025: Operating Lease Liabilities expected to be recognized in Amount 2026 $ 828,200 2027 851,100 2028 874,600 2029 898,700 2030 Thereafter Total lease payments 3,452,600 Les …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

Recently Issued Accounting Pronouncements Disaggregation Income Statement Expenses In November 2024, the Financial Accounting Standards Board (FASB) issued guidance requiring additional disclosure of the nature of expenses included in the income statement in response to requests from investors for more information about an entitys expenses. The new standard requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as disclosures about selling expenses. The guidance is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods within annual reporting periods beginning after December 15, 2027. The requirements will be applied prospectively with the option for retrospective application. Early adoption is permitted. The Company is currently evaluating the impact this new guidance will have on its financial statements and disclosures. Recently Adopted Accounting Pronouncements Improvements to Income Tax Disclosures In December 2023, the FASB issued guidance that expands income tax disclosures for public entities, including requiring enhanced disclosures related to the rate reconciliation and income taxes paid information. The guidance is effective for annual disclosures for fiscal years beginning after December 15, 2024, with early adoption permitted. The guidance should be applied on a prospective basis, with retrospective application to all prior periods present …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

13. Segment Reporting: The Company currently has one reportable business 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 the Companys equipment leasing business. Segment reporting is intended to give financial statement users a better view of how the Company manages and evaluates its businesses. The Companys CODM is its Chief Executive Officer. Our CODM primarily reviews revenue and income from operations for purposes of allocating resources and evaluating financial performance. Expenses are reviewed on a consolidated basis. The Companys internal management reporting is the basis for the information disclosed for its 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 December 30, 2023 Revenue: Franchising $ 83,423,900 $ 79,477,300 $ 78,477,300 Other 2,631,800 1,811,800 4,766,200 Total revenue $ 86,055,700 $ 81,289,100 $ 83,243,500 Franchising segment operating expenses: Merchandise COGS $ 3,104,400 $ 3,379,200 $ 4,461,500 Selling, general and administrative expenses 28,262,100 24,504,800 24,639,900 Total franchising segment expenses $ 31,366,500 $ 27,884,000 $ 29,101,400 Reconciliation to operating income: Franchising segment income from operations $ …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

2. Significant Accounting Policies: Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Winmark Capital Corporation, Wirth Business Credit, Inc. and Grow Biz Games, Inc. All material inter-company transactions have been eliminated in consolidation. Cash Equivalents Cash equivalents consist of highly liquid investments with an original maturity of three months or less when purchased. Cash equivalents are stated at cost, which approximates fair value. As of December 27, 2025 and December 28, 2024, the Company had $191,500 and $73,800 , respectively, of cash located in Canadian banks. The Company holds its cash and cash equivalents with financial institutions and at times, such balances may be in excess of insurance limits. Receivables The beginning balance at December 31, 2023 for accounts receivable arising from contracts with customers was $1,475,300 with ending balances included in Receivables, net in the Consolidated Balance Sheets. The Company provides an allowance for credit losses on trade receivables. The allowance for credit losses was $500 and $500 at December 27, 2025 and December 28, 2024 respectively. If receivables in excess of the provided allowance are determined uncollectible, they are charged to expense in the year the determination is made. Trade receivables are written off when they become uncollectible (which generally occurs when the franchise terminates and there is no re …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

9. Debt: Line of Credit/Term Loan As of June 27, 2026, there were no revolving loans outstanding under the Companys credit facility with CIBC Bank USA (the Line of Credit), leaving $20.0 million available for additional borrowings. As of June 27, 2026, the Company had delayed draw term loan borrowings totaling $30.0 million under the Line of Credit bearing interest ranging from 4.60% to 4.75%. The Line of Credit has been and will continue to be used for general corporate purposes. The Line of Credit is secured by a lien against substantially all of the Companys assets, (as the Line of Credit ranks pari passu with the Prudential facilities described below) contains customary financial conditions and covenants, and requires maintenance of minimum levels of debt service coverage and maximum levels of leverage (all as defined within the Line of Credit). As of June 27, 2026, the Company was in compliance with all of its financial covenants. Notes Payable As of June 27, 2026, the Company had aggregate principal outstanding of $30.0 million under its Note Agreement (the Note Agreement) with PGIM, Inc (formerly Prudential Investment Management, Inc.) its affiliates and managed accounts (collectively, Prudential) consisting of $30.0 million in principal outstanding from the $30.0 million Series C notes issued in September 2021. The final maturity of the Series C notes is 7 years from the issuance date. For the Series C notes, interest at a rate of 3.18% per annum on the outstanding pr …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

4. Fair Value Measurements: The Company defines fair value as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company uses three levels of inputs to measure fair value: Level 1 quoted prices in active markets for identical assets and liabilities. Level 2 observable inputs other than quoted prices in active markets for identical assets and liabilities. Level 3 unobservable inputs in which there is little or no market data available, which require the reporting entity to develop its own assumptions. Due to their nature, the carrying value of cash equivalents, receivables, payables and debt obligations approximates fair value. …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

10. Operating Leases: As of June 27, 2026, the Company leases its Minnesota corporate headquarters in a facility with an operating lease that expires in December 2029. The remaining lease term for this lease is 3.5 years and the discount rate is 5.5% . The Company recognized $557,400 and $484,800 of rent expense for the periods ended June 27, 2026 and June 28, 2025, respectively. Maturities of operating lease liabilities is as follows for the remainder of fiscal 2026 and full fiscal years thereafter as of June 27, 2026: Operating Lease Liabilities expected to be recognized in Amount 2026 $ 417,900 2027 851,100 2028 874,600 2029 898,600 2030 Thereafter Total lease payments 3,042,200 Less imputed interest (278,400) Present value of lease liabilities $ 2,763,800 Of the $2.8 million operating lease liability outstanding at June 27, 2026, $0.7 million is included in Accrued liabilities in the Current liabilities section of the Consolidated Condensed Balance Sheets. Supplemental cash flow information related to our operating leases is as follows for the period ended June 27, 2026: Six Months Ended June 27, 2026 June 28, 2025 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flow outflow from operating leases $ 410,400 $ 399,300 …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

11. Segment Reporting: The Company currently has 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 the Companys equipment leasing business. Segment reporting is intended to give financial statement users a better view of how the Company manages and evaluates its businesses. The Companys chief operating decision maker (CODM) is its Chief Executive Officer. The Companys CODM primarily reviews revenue and income from operations for purposes of allocating resources and evaluating financial performance. Expenses are reviewed on a consolidated basis. The Companys internal management reporting is the basis for the information disclosed for its operating segments. The following tables summarize financial information by segment and provide a reconciliation of segment contribution to income from operations: Three Months Ended Six Months Ended June 27, 2026 June 28, 2025 June 27, 2026 June 28, 2025 Revenue: Franchising $ 21,966,000 $ 20,370,200 $ 42,815,700 $ 39,981,900 Other 46,600 2,354,500 Total revenue $ 21,966,000 $ 20,416,800 $ 42,815,700 $ 42,336,400 Franchising segment operating expenses: Merchandise COGS $ 818,500 $ 766,500 $ 1,437,000 $ 1,654,800 Selling, general and administrative expenses 7,506,400 6,585,000 15,376,000 13,936,300 Total franchising segment expenses $ 8,324,900 $ 7,351 …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing