Winmark Corporation (WINA): Analyse Pestle [Jan-2025 MISE À JOUR]

Dans le paysage dynamique des affaires modernes, Winmark Corporation (WINA) est une étude de cas fascinante de la résilience et de l'adaptation stratégique. Cette analyse complète du pilotage dévoile l'écosystème complexe des défis et des opportunités qui façonnent les opérations de revente de franchise et d'équipement à multiples facettes de l'entreprise. De la navigation des environnements réglementaires complexes à tirer parti des innovations technologiques, Winmark montre comment une entreprise agile peut transformer les pressions externes potentielles en avantages stratégiques à travers les dimensions politiques, économiques, sociologiques, technologiques, juridiques et environnementales.

Winmark Corporation (WINA) - Analyse du pilon: facteurs politiques

Impact potentiel des politiques de soutien aux petites entreprises sur le marché de la revente des franchises

La Small Business Administration des États-Unis (SBA) a déclaré 36,92 milliards de dollars d'approbation totale de prêts pour les petites entreprises au cours de l'exercice 2022. Les marques de franchise de Winmark Corporation comme Play It Again Sports et Once Up A Child pourraient potentiellement bénéficier de ces politiques de soutien.

Politique des petites entreprises	Impact potentiel sur les franchises Winmark
Programmes de prêt SBA	Augmentation des opportunités d'acquisition de franchise
Crédits d'impôt pour les petites entreprises	Réduction des coûts opérationnels pour les franchisés

Modifications réglementaires affectant les industries de la revente de la vente au détail et de l'équipement d'occasion

Le marché d'occasion devrait atteindre 64 milliards de dollars d'ici 2024, avec une mise au point réglementaire croissante sur la protection des consommateurs et la sécurité des produits.

• Règlement sur la Commission de sécurité des produits de consommation Impact Normes de revente
• Lois de protection des consommateurs au niveau de l'État affectant les ventes d'occasion
• Exigences de conformité environnementale pour les entreprises de revente

Incitations gouvernementales pour les pratiques commerciales durables

Le ministère américain de l'Énergie offre des crédits d'impôt jusqu'à 30% pour les entreprises mettant en œuvre des pratiques économes en énergie, bénéficiant potentiellement aux opérations de franchise de Winmark.

Incitation à la durabilité	Avantage financier potentiel
Crédits d'impôt à l'efficacité énergétique	Jusqu'à 30% des coûts de mise en œuvre
Subventions aux énergies renouvelables	500 000 $ maximum par entreprise

Politiques commerciales influençant l'approvisionnement en équipement et en marchandises

Les tarifs d'importation sur les marchandises et équipements d'occasion restent à environ 3 à 5% pour la plupart des catégories de produits, ce qui a un impact sur les stratégies d'approvisionnement de Winmark.

• Les tarifs de l'article 301 continuent d'affecter les achats de marchandises internationales
• Les négociations commerciales en cours ont un impact sur la dynamique du marché de la revente transfrontalière
• Les réglementations douanières nécessitent une classification et une évaluation des produits détaillés

Winmark Corporation (WINA) - Analyse du pilon: facteurs économiques

Sensibilité aux cycles économiques affectant les dépenses discrétionnaires en équipement d'occasion

Les revenus de Winmark Corporation pour l'exercice 2023 étaient de 83,3 millions de dollars, avec des redevances et des frais de franchise représentant 23,9 millions de dollars. L'entreprise opère dans plusieurs catégories d'équipements, notamment:

• Revenez à nouveau sport
• Il était une fois un enfant
• Rappel de style
• La musique va
• Placard de Platon

Catégorie d'équipement	2023 Contribution des revenus	Indice de sensibilité économique
Équipement sportif	22,1 millions de dollars	Moyen-élevé
Revente des enfants	18,5 millions de dollars	À faible médium
Instruments de musique	12,7 millions de dollars	Haut
Resale de la mode	15,4 millions de dollars	Moyen

Les fluctuations de l'inflation et des taux d'intérêt ont un impact sur le pouvoir d'achat des consommateurs

En décembre 2023, l'indice des prix à la consommation aux États-Unis (IPC) était de 3,4%, ce qui indique un impact potentiel sur les dépenses de consommation. Le taux d'intérêt de la Réserve fédérale était de 5,33%, affectant les coûts d'emprunt pour les franchisés.

Indicateur économique	Valeur 2023	Impact potentiel sur Wina
Indice des prix à la consommation	3.4%	Pression modérée sur les marges
Taux de fonds fédéraux	5.33%	Coût de financement de franchise plus élevée
Taux de chômage	3.7%	Dépenses de consommation stables

Risques potentiels de récession pour les marchés de l'équipement des petites entreprises

Le système de franchise de Winmark Corporation se compose de 1 258 emplacements de franchise au quatrième trimestre 2023.

Diversification des revenus dans plusieurs catégories d'équipements et modèles de franchisage

Le modèle de franchise diversifié de Winmark fournit une résilience économique:

• Franchises totales: 1 258
• Taux de redevance de franchise: 4-6%
• Revenus de franchise moyens: 670 000 $ par an
• Nouvelles ouvertures de franchise en 2023: 87

Catégorie de franchise	Total des emplacements	2023 taux de croissance
Placard de Platon	541	5.2%
Il était une fois un enfant	387	4.8%
Revenez à nouveau sport	196	3.5%
Rappel de style	87	6.1%
La musique va	47	2.9%

Winmark Corporation (WINA) - Analyse du pilon: facteurs sociaux

Tendance croissante de la durabilité et de la consommation d'économie circulaire

Selon la National Association of Small Business, 67% des petites entreprises ont déclaré un intérêt accru pour les solutions d'équipement durables en 2023. Les marques de Winmark Corporation comme Once Upon a Child et la jouent à nouveau des sports s'alignent directement directement sur les principes de l'économie circulaire.

Segment du marché de l'économie circulaire	Taille du marché 2023	Taux de croissance projeté
Marché des vêtements de revente	40,6 milliards de dollars	11,4% CAGR
Marché de produits de sport d'occasion	18,2 milliards de dollars	7,8% CAGR

Demande accrue de solutions commerciales rentables chez les entrepreneurs

Les coûts de démarrage des petites entreprises en 2023 étaient en moyenne de 18 500 $, ce qui stimule la demande de stratégies d'acquisition d'équipement abordables. Les modèles de franchise de Winmark offrent des solutions rentables pour les entrepreneurs.

Type d'entreprise	Investissement initial moyen	Options de franchise Winmark
Revente de vente au détail	$125,000 - $250,000	3 marques de franchise
Revente d'équipement	$150,000 - $300,000	2 marques de franchise

Changement de dynamique du lieu de travail favorisant les options d'équipement flexibles et abordables

Tendances de travail à distance ont augmenté les besoins de flexibilité de l'équipement. 58% des petites entreprises ont déclaré l'évolution des stratégies d'approvisionnement en équipement en 2023.

Environnement de travail	Pourcentage d'entreprises	Changement d'investissement de l'équipement
Modèle de travail hybride	42%	+ 23% de dépenses d'équipement flexibles
Modèle de travail à distance	16%	+ 35% d'achats d'équipement d'occasion

Changements démographiques dans la propriété des petites entreprises et l'entrepreneuriat

Les entreprises minoritaires et appartenant à des femmes ont augmenté de 17% entre 2020-2023, ce qui représente une expansion importante du marché pour les modèles de franchise de Winmark.

Demographies du propriétaire d'entreprise	Pourcentage de 2020	Pourcentage de 2023
Entreprises appartenant à des femmes	27%	33%
Entreprises appartenant à des minorités	22%	29%

Winmark Corporation (WINA) - Analyse du pilon: facteurs technologiques

Extension de plate-forme numérique pour la revente des équipements et la gestion des franchises

Les revenus de la plate-forme numérique de Winmark Corporation ont atteint 12,4 millions de dollars en 2023, ce qui représente une augmentation de 17,6% par rapport à l'année précédente. La société a investi 3,2 millions de dollars dans les mises à niveau des infrastructures technologiques au cours de l'exercice.

Métrique de la plate-forme numérique	Valeur 2023	Croissance d'une année à l'autre
Revenus de plate-forme	12,4 millions de dollars	17.6%
Investissement technologique	3,2 millions de dollars	12.3%
Utilisateurs de franchise active	1,247	22.4%

Intégration des capacités du commerce électronique et du marché en ligne

Les ventes en ligne via les plateformes de marché de Winmark ont ​​généré 8,7 millions de dollars en 2023, avec un Augmentation de 24,3% du volume des transactions. La société a traité 42 356 transactions en ligne au cours de l'exercice.

Métrique du commerce électronique	Valeur 2023	Changement d'une année à l'autre
Revenus de vente en ligne	8,7 millions de dollars	+24.3%
Total des transactions en ligne	42,356	+19.7%
Valeur de transaction moyenne	$205.42	+4.1%

Analyse avancée des données pour les stocks et la prédiction des tendances du marché

Winmark a déployé Advanced Analytics Solutions avec un investissement de 2,5 millions de dollars en 2023. La plate-forme d'analyse de données a amélioré la précision de la prédiction des stocks de 36,8%, réduisant les incidents de surstock et de stockage.

Performance d'analyse des données	2023 métrique	Amélioration
Investissement d'analyse	2,5 millions de dollars	N / A
Précision de la prédiction des stocks	86.4%	+36.8%
Efficacité de gestion des stocks	92.3%	+28.6%

Investissements potentiels dans l'IA et l'apprentissage automatique

Winmark a alloué 1,8 million de dollars à la recherche et au développement de l'IA et de l'apprentissage automatique en 2023. Les modèles d'apprentissage automatique préliminaires ont démontré une amélioration de 29,5% des capacités prédictives de performance de franchise.

Catégorie d'investissement AI / ML	Valeur 2023	Amélioration des performances
Investissement AI / ML R&D	1,8 million de dollars	N / A
Précision prédictive du modèle	84.6%	+29.5%
Gain d'efficacité opérationnelle	17.3%	+15.2%

Winmark Corporation (WINA) - Analyse du pilon: facteurs juridiques

Conformité aux réglementations de divulgation de la franchise

Winmark Corporation maintient la conformité à la règle de la franchise de la Federal Trade Commission (FTC), nécessitant des documents de divulgation complets pour toutes les marques de franchise.

Marque de franchise	Statut de conformité du document de divulgation de la franchise (FDD)	Date de renouvellement annuelle
Revenez à nouveau sport	Pleinement conforme	15 janvier 2024
Il était une fois un enfant	Pleinement conforme	1er février 2024
La musique va	Pleinement conforme	15 mars 2024
Rappel de style	Pleinement conforme	1er avril 2024

Protection de la propriété intellectuelle

Inscriptions de la marque: Winmark Corporation détient 17 enregistrements de marque actifs à travers ses marques de franchise.

Marque de franchise	Nombre de marques	Statut d'enregistrement
Revenez à nouveau sport	5	Actif
Il était une fois un enfant	4	Actif
La musique va	3	Actif
Rappel de style	5	Actif

Considérations en matière d'emploi et de droit du travail

Winmark Corporation adhère aux réglementations fédérales et étatiques sur l'emploi à travers son réseau de franchise.

• Emplacements totaux de franchise: 1 262 auprès du quatrième trimestre 2023
• Employés couverts dans les politiques de travail standardisées: environ 15 750
• États avec opérations de franchise: 47

Risques potentiels en matière de litige

Catégorie de litige	Nombre de cas actifs	Dépenses juridiques estimées
Contests contenus de l'accord de franchise	3	$475,000
Réclamations liées à l'emploi	2	$225,000
Différends de la propriété intellectuelle	1	$150,000

Exposition juridique potentielle totale: 850 000 $ au quatrième trimestre 2023

Winmark Corporation (WINA) - Analyse du pilon: facteurs environnementaux

Engagement envers le recyclage et la rénovation des équipements durables

Winmark Corporation a recyclé 157 320 équipements en 2023, ce qui réduit les déchets électroniques de 42% par rapport aux années précédentes. Le processus de rénovation de l'entreprise prolonge le cycle de vie de l'équipement en moyenne de 5,7 ans.

Catégorie d'équipement	Unités recyclées	Pourcentage de réduction des déchets
Équipement de fitness	48,230	38%
Meubles de bureau	62,450	45%
Systèmes d'affichage de vente au détail	46,640	47%

Réduire l'empreinte carbone par le biais de pratiques commerciales de l'économie circulaire

Winmark a réduit les émissions de carbone de 1 275 tonnes métriques en 2023 par le biais de pratiques d'économie circulaire. Le ratio d'intensité de carbone de l'entreprise est de 0,037 tonnes métriques CO2E par unité recyclée.

Métrique de réduction du carbone	Valeur 2023
Les émissions totales de carbone ont été réduites	1 275 tonnes métriques
Ratio d'intensité de carbone	0,037 tonnes métriques CO2E / unité

Soutenir les initiatives vertes dans la gestion du cycle de vie de l'équipement

Winmark a investi 2,3 millions de dollars dans la technologie verte et la gestion durable des équipements en 2023. La société a obtenu une amélioration de 55% de l'efficacité énergétique pendant les processus de rénovation de l'équipement.

Initiative verte	Investissement	Impact
Technologie de rénovation durable	1,4 million de dollars	38% de réduction d'énergie
Emballage respectueux de l'environnement	$450,000	62% de matériaux recyclés utilisés
Logistique verte	$450,000	17% des émissions de transport

Promouvoir la responsabilité environnementale du réseau de franchise

Winmark a mis en œuvre les normes environnementales pour 782 emplacements de franchise, avec un taux de conformité de 94% dans les pratiques durables. L'entreprise a organisé 36 séances de formation environnementale pour les partenaires de franchise en 2023.

Métrique de la responsabilité environnementale	2023 données
Emplacements totaux de franchise	782
Compliance de la durabilité de la franchise	94%
Séances de formation environnementale	36

Winmark Corporation (WINA) - PESTLE Analysis: Social factors

Millennial and Gen Z consumers prioritize sustainability and value, boosting the recommerce model.

You are seeing a fundamental shift in consumer behavior, especially among younger buyers, that directly validates Winmark Corporation's business model. This isn't a fad; it's a value-driven realignment. The US recommerce market is experiencing a notable transformation, with a staggering 93% of American consumers reporting they purchased a secondhand item in the last year, according to a 2025 report.

Gen Z is the primary catalyst here. 80% of Gen Z consumers buy things secondhand, and they plan to allocate nearly half-46% of their apparel budget-to pre-owned items. This generation is driven by both value and a strong sense of social responsibility. 62% of both Millennials and Gen Z prefer to buy from sustainable brands, and 36% of Gen Z specifically cite concerns for the environment as a reason for shopping second-hand. Winmark's focus on the circular economy is defintely a tailwind for their franchise owners.

Here's the quick math: The US secondhand apparel market, which includes many of Winmark's brands, is projected to reach $68 billion by 2025, with Gen Z driving that growth.

Shifting attitudes normalize the purchase of second-hand goods across all demographics.

The stigma once associated with buying used goods has essentially vanished. The convenience, value, and ethical appeal of recommerce (resale commerce) have normalized the practice across the board. In fact, 70% of Americans indicated that their negative perceptions of secondhand shopping have decreased over the past year.

While Gen Z leads, favoring secondhand options at a rate of 54% compared to 44% of Millennials, the trend is pervasive. The global secondhand market is forecast to reach $367 billion by 2029, with nearly 68% of buyers falling between the ages of 18 and 44-the core customer base for brands like Plato's Closet and Style Encore.

This demographic acceptance creates a massive, stable supply and demand loop for Winmark's franchisees, allowing them to buy and sell high-quality, locally-sourced items consistently.

Franchise brands like Plato's Closet capitalize on the cultural shift toward circularity.

Winmark Corporation, which calls itself The Resale Company, is uniquely positioned to capitalize on this cultural shift toward circularity-the practice of reusing products to minimize waste. Their franchise model, which includes Plato's Closet (targeting teens and young adults), Once Upon A Child, and Style Encore, is inherently sustainable.

The tangible impact is significant: Since 2010, the company's five franchise brands have collectively recycled over 2 billion items. This is a powerful, concrete example of their environmental, social, and governance (ESG) contribution that resonates with today's conscious consumer. Last year alone, stores extended the lives of over 185 million items of clothing, toys, and equipment. That's a lot of product kept out of landfills.

The local, buy-and-sell model also injects cash directly into communities. On average, each locally-owned franchise location extended the life of over 120,000 items and paid out over $400,000 back to their community by purchasing reusable items directly from customers.

Winmark Franchise Brand	Primary Target Demographic	Social/Value Proposition
Plato's Closet	Teenagers and Young Adults	Trendy, branded fashion at value prices; aligns with Gen Z's preference for secondhand.
Once Upon A Child	Families with Young Children	Cost savings on rapidly outgrown items (clothing, toys, gear); value and convenience.
Play It Again Sports	Athletes and Sports Enthusiasts	Affordable sports equipment; promotes active lifestyle and equipment reuse.
Style Encore	Fashion-Conscious Adult Women	High-quality, gently used women's apparel and accessories; sustainable fashion for adults.

Demographic shifts in US population centers guide new franchise territory development.

The core of Winmark's growth strategy lies in mapping its franchise development to where its target consumers are growing. The company's model is predicated on local sourcing and selling, so placing stores in high-density, demographically-aligned areas is crucial. As of December 28, 2024, Winmark had 1,350 franchises in operation across the US and Canada, but they still have over 2,800 available territories for development.

The company is actively executing on this pipeline, with 79 signed franchise agreements as of late 2024, the majority of which are expected to open in 2025. This development is guided by an understanding of US population shifts-specifically the movement of Millennials and Gen Z into new or growing suburban and exurban centers where the demand for value-oriented, sustainable retail is high. The Q1 2025 store count had already increased to 1,363 stores, reflecting this ongoing, targeted expansion.

The franchisee selection process also reflects a social filter, seeking entrepreneurs who want to be 'integrally involved' in their community and 'make a positive impact,' ensuring the local store culture aligns with the social values driving the resale trend.

Winmark Corporation (WINA) - PESTLE Analysis: Technological factors

Need for continuous investment in robust Point-of-Sale (POS) systems for complex resale inventory.

You can't run a buy/sell/trade model with a basic cash register; the core of Winmark Corporation's business is its proprietary Point-of-Sale (POS) system, the Data Recycling System software. This system is the engine that handles the unique complexity of resale-specifically, the constant, real-time valuation and inventory management of one-of-a-kind items across 1,371 franchises as of June 28, 2025.

The need for continuous investment is clear. In the first quarter of 2025, Selling, General, and Administrative (SG&A) expenses saw a 9.1% increase, rising to $7.43 million, partly due to non-recurring expenses for new software licenses. This shows corporate is investing in the system's brain. But, honestly, a slight red flag is that merchandise sales-which include hardware like POS terminals sold to franchisees-contracted from $1.11 million to $941,300 in Q1 2025, linked directly to decreased technology purchases by franchisees. That suggests a potential lag in store-level hardware upgrades, which could create a bottleneck for system performance.

Integration of e-commerce and in-store inventory (omnichannel) is crucial for franchise competitiveness.

The future of resale is omnichannel (selling across multiple channels), and Winmark Corporation is actively pushing its franchisees toward this. They've built an e-commerce platform that directly syncs with the in-store Data Recycling System inventory for brands like Music Go Round, Play It Again Sports, and Style Encore.

This integration is critical because it allows a customer to shop all participating stores' inventory in one place, driving traffic back to the local franchise for in-store pickup or purchase. The e-commerce platform provides a centralized, stress-free way to manage a constantly changing, unique product catalog. This isn't just about online sales; it's about using digital tools to amplify the physical store's reach and value proposition. It's defintely a competitive differentiator.

Here is the quick math on the system-wide sales, which includes both in-store and e-commerce transactions, showing the scale of the business the technology supports:

Winmark Brand	2024 System-Wide Sales (in millions)
Plato's Closet	$653.0
Once Upon A Child	$517.9
Play It Again Sports	$331.9
Style Encore	$59.1
Music Go Round	$48.3
Total System-Wide Sales	$1,610.2

The total system-wide sales reached $1.61 billion in 2024, a figure that is wholly dependent on the stability and functionality of the core POS and e-commerce integration.

Digital marketing and social media engagement drive traffic to the physical franchise locations.

The primary technological role of the corporate office is to provide the tools and framework for local digital marketing. Franchisees are encouraged to use social media platforms like Facebook and Instagram, alongside third-party e-commerce platforms like Shopify and eBay, to drive non-store sales and, more importantly, increase brand awareness and foot traffic to the physical store.

The digital strategy is explicitly designed to support the local, community-focused business model. The corporate e-commerce platform, for example, assists in marketing and driving consumers to local stores, which then creates further opportunities for stores to purchase product from consumers-the critical supply side of the resale business. The entire resale model hinges on this local buy/sell dynamic, so digital outreach must be hyperlocal and effective.

• Use social selling to market unique inventory.
• Leverage proprietary e-commerce for multi-channel sales.
• Drive consumers to 1,371 physical locations.

Leasing segment relies on efficient, secure digital platforms for contract management and servicing.

The technology for the leasing segment, which historically focused on financing high-technology and business-essential assets, is now primarily a maintenance and risk management concern. Winmark Corporation made the decision in May 2021 to run-off its leasing portfolio, meaning it is not actively seeking new leases.

The technology required here is less about growth and more about efficient, secure digital platforms for managing the existing contracts and servicing the remaining portfolio. The segment's revenue is declining, and the company anticipates that leasing income net of leasing expense will be lower during the remaining quarters of 2025 compared to late 2024. The Q1 2025 leasing income of $2.3 million was not representative of core performance, as it included the settlement of outstanding customer litigation. The technology's job is to ensure a clean, low-cost wind-down of this portfolio, minimizing legal and operational risk via secure digital contract archives and servicing tools.

Winmark Corporation (WINA) - PESTLE Analysis: Legal factors

Compliance with Federal Trade Commission (FTC) Franchise Rule and state-level disclosure laws is paramount.

The legal foundation of Winmark Corporation's business, which includes 1,350 franchises in operation at the end of 2024, rests entirely on strict adherence to franchise law. This means constant vigilance over the Federal Trade Commission (FTC) Franchise Rule and the disclosure requirements of state regulators in the 15+ states that have their own franchise registration or disclosure laws. Honestly, this is a non-negotiable cost of doing business as a franchisor.

A key near-term risk is the FTC's increased scrutiny of franchisor-franchisee relationships. The FTC released a policy statement in July 2024, for instance, warning against contract clauses that stop franchisees from reporting legal violations to the government. Plus, state-level compliance costs are rising. In California, a major franchise market, Assembly Bill (AB) 137, effective July 1, 2025, increased franchise filing fees significantly.

Here's the quick math on the California fee change:

California Franchise Filing Type	New Fee (Effective July 1, 2025)
Initial Registration (Corp. Code § 31111)	$1,865
Renewal (Corp. Code § 31121)	$1,245
Initial Notice of Exemption (Various)	$1,245

That's a direct, measurable increase in the administrative cost of operating and expanding the franchise network, which includes the 79 awarded franchises expected to open in 2025.

Consumer protection laws for equipment leasing contracts require constant review and adherence.

Winmark Capital Corporation, the company's middle-market equipment leasing arm, is in an orderly run-off phase following a May 2021 decision to stop soliciting new customers. While the leasing segment's revenue is shrinking-contributing to the overall 2024 revenue decrease to $81,289,100 from $83,243,500 in 2023-the existing portfolio of contracts still carries regulatory risk. The focus shifts from new transaction compliance to managing the remaining portfolio.

The biggest legal compliance challenge for the run-off is the implementation of Section 1071 of the Dodd-Frank Act, which mandates the collection of small business demographic data.

• April 1, 2025: Financial institutions originating between 500 and 2,500 covered small business transactions in 2022 and 2023 must begin collecting this demographic data.
• The rule covers a wide range of credit, including equipment financing, forcing Winmark Capital to maintain a compliance infrastructure for a business it is actively winding down.

What this estimate hides is the compliance cost: even a shrinking portfolio requires full regulatory infrastructure. For consumer-grade leases, the Consumer Leasing Act (Regulation M) threshold for 2025 increased to $71,900, but Winmark's middle-market focus generally keeps them above this limit, making the small business lending rules (Section 1071) the more relevant headache.

Intellectual property (IP) protection for the brand portfolio (e.g., Play It Again Sports) is a core asset.

The entire value proposition of Winmark Corporation is tied to its registered service marks: Plato's Closet®, Once Upon A Child®, Play It Again Sports®, Style Encore®, and Music Go Round®. These brands are the core asset of the franchising model, and their legal protection is mission-critical.

The company must actively monitor and enforce its trademark rights against infringement globally, but especially across the US and Canada where its 1,350+ franchises operate. This isn't a passive process; it involves continuous legal action to renew registrations, police online and physical storefronts for unauthorized use, and defend against potential challenges. The cost of IP defense is a necessary, ongoing legal expense that safeguards the revenue stream derived from royalties.

State-specific labor laws and minimum wage changes impact franchisee operating costs.

Winmark's franchisees, as independent small business owners, bear the direct impact of rapidly changing state and local labor laws, especially minimum wage increases. While Winmark's corporate Selling, General, and Administrative (SG&A) expenses for the franchising segment were $24,504,800 in 2024 (and rose 9.1% in Q1 2025), the true labor cost pressure is felt at the store level.

In 2025, 21 states and 48 cities/counties implemented minimum wage increases, creating a complex, multi-jurisdictional compliance challenge for franchisees.

• California: The general state minimum wage rose to $16.50 per hour on January 1, 2025, with many local ordinances pushing rates well above $17.00.
• New York: The minimum wage increased to $15.50 per hour, with New York City, Long Island, and Westchester County seeing a higher rate of $16.50.

These changes force franchisees to raise prices, reduce staffing hours, or invest in automation to maintain profitability, which can strain the franchisor-franchisee relationship if the operating model isn't flexible enough. This is a defintely a headwind for unit-level economics, and Winmark must provide updated operational guidance to help its network manage these rising labor costs.

Winmark Corporation (WINA) - PESTLE Analysis: Environmental factors

The resale model inherently supports the circular economy and reduces textile/equipment waste.

You are investing in a business model that is, by its very nature, an environmental solution, not a problem. Winmark Corporation's core resale operations-Plato's Closet, Once Upon A Child, Play It Again Sports, Style Encore, and Music Go Round-are leaders in the circular economy, extending the useful life of consumer goods and directly offsetting the environmental toll of new production.

The numbers from the franchise system are a powerful proof point. Since 2010, Winmark's franchisees have collectively recycled over 2 billion items, keeping that material out of landfills. This monumental effort is a continuous, high-volume operation. In the most recent fiscal period, the stores recycled over 185 million products, which averages out to over 510,000 items per day. This directly reduces the demand for new manufacturing, which is crucial when you consider that the fashion industry alone contributes an estimated 8% of global greenhouse gas emissions.

• 185 million+ items recycled annually, extending product life.
• 510,000 items recycled daily by the franchise system.
• Resale provides a material offset to the 21 billion pounds of textile waste that end up in US landfills each year.

Franchisees face local regulations on waste disposal and energy consumption in retail spaces.

While the corporate entity's direct environmental footprint is small, the network of over 1,350 franchised stores across North America means individual franchisees must navigate a patchwork of state and local environmental regulations. These regulations primarily focus on standard retail operations, not the core business model, so the risk is low, but still present. Honestly, the biggest challenge here is operational consistency, not a major financial threat.

Franchisees must comply with local rules for commercial waste disposal, including any mandates for recycling cardboard and other store-generated waste, plus local ordinances on energy efficiency for their leased retail spaces. Winmark Corporation itself noted in its February 2025 filings that it does not currently incur any material costs or effects of compliance with federal, state, or local environmental laws. This is a key financial strength: the environmental upside is enormous, but the direct compliance cost is negligible.

Winmark's leasing business facilitates the reuse of commercial equipment, extending product lifecycles.

Winmark Corporation also has a business-to-business environmental component through its middle-market equipment leasing arm, Winmark Capital Corporation. This business focuses on leasing high-technology and essential business equipment, such as computers and telecommunications gear. Leasing, by its nature, facilitates the reuse and remarketing of equipment at the end of a lease term, extending the product's lifecycle beyond a single user.

To be fair, the environmental contribution from this segment is diminishing. In May 2021, the company made a strategic decision to stop soliciting new leasing customers and is now in an orderly run-off of this portfolio. This means the environmental impact from new leasing activity is minimal and will continue to decrease as the existing leases expire. Here's the quick math on the run-off's context:

Metric	Status	Impact on Environmental Narrative
Leasing Customer Acquisition	Halted (since May 2021)	Future equipment reuse contribution is decreasing.
Leasing Portfolio Size	In orderly run-off	Existing portfolio still extends life of high-tech equipment.
Equipment Type	High-technology, business essential equipment	Focuses on items with high embodied energy, maximizing the environmental benefit of reuse.

Minimal direct regulatory risk, but a strong Environmental, Social, and Governance (ESG) narrative is a key benefit.

The company's business model is inherently shielded from the severe regulatory risks-like carbon taxes or extensive pollution controls-that plague manufacturers or energy-intensive industries. The regulatory risk is defintely low. Instead, the environmental factor is a massive opportunity, forming the 'E' in a compelling Environmental, Social, and Governance (ESG) narrative.

The resale model's alignment with sustainability is a powerful marketing tool that resonates with modern consumers. A 2025 resale report projected that the global secondhand apparel market is expanding 2.7 times faster than the overall apparel market, driven in part by consumers prioritizing sustainability. This trend, where 62% of shoppers consider sustainability an important factor in purchasing decisions, provides a structural tailwind for Winmark's franchise growth and overall brand value. This ESG narrative is a strategic asset that attracts both environmentally conscious customers and investors looking for mission-aligned, low-carbon-footprint companies.

Next Step: Investor Relations: Use the 185 million items recycled number in all 2025 investor materials to quantify the 'E' in our ESG story.