Winmark Corporation (WINA): Business Model Canvas [11-2024 Updated]
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Winmark Corporation (WINA) Bundle
In today’s fast-paced retail environment, Winmark Corporation (WINA) stands out with its innovative business model, primarily built around a robust franchise system. Leveraging a diverse portfolio of brands such as Plato’s Closet and Once Upon A Child, Winmark has created a sustainable business focused on resale, appealing to a variety of customer segments. This blog post delves into the intricacies of Winmark's business model canvas, showcasing how it effectively aligns key partnerships, activities, resources, and value propositions to drive success. Discover the strategic elements that make Winmark a leader in the franchise industry below.
Winmark Corporation (WINA) - Business Model: Key Partnerships
Franchisees Across Multiple Brands
Winmark Corporation operates a franchising model with a total of 1,343 franchises as of September 28, 2024, under various brands, including Plato’s Closet, Once Upon A Child, Play It Again Sports, Style Encore, and Music Go Round. The company reported royalties of $54.6 million for the first nine months of 2024, reflecting a 2.8% increase compared to $53.1 million for the same period in 2023. Additionally, franchise fees collected amounted to $1.2 million for the same period, up from $1.1 million in the prior year.
| Brand | Total Franchises (as of 9/28/2024) | Franchise Fees (9M 2024) | Royalties (9M 2024) |
|---|---|---|---|
| Plato’s Closet | 515 | $451,200 | $19,512,500 |
| Once Upon A Child | 425 | $451,200 | $19,512,500 |
| Play It Again Sports | 301 | $451,200 | $19,512,500 |
| Style Encore | 68 | $451,200 | $19,512,500 |
| Music Go Round | 34 | $451,200 | $19,512,500 |
Suppliers for Merchandise and Equipment
Winmark collaborates with various suppliers to provide merchandise and equipment to its franchisees. Merchandise sales to franchisees through the Computer Support Center and the Play It Again Sports buying group totaled $2.7 million for the first nine months of 2024, down from $3.6 million in the same period of 2023. The cost of merchandise sold for this segment was $2.6 million, compared to $3.4 million in the prior year.
| Metric | 9M 2024 | 9M 2023 |
|---|---|---|
| Merchandise Sales | $2.7 million | $3.6 million |
| Cost of Merchandise Sold | $2.6 million | $3.4 million |
Financial Institutions for Credit Facilities
Winmark utilizes financial institutions for its credit facilities, including a Line of Credit with CIBC Bank USA, which had $20.0 million available for additional borrowings as of September 28, 2024. The company also has delayed draw term loan borrowings totaling $30.0 million, with interest rates ranging from 4.60% to 4.75%. Furthermore, the company has $36.0 million in principal outstanding under its Note Agreement with Prudential, comprising various series of notes.
| Facility Type | Amount | Interest Rate |
|---|---|---|
| Line of Credit | $20.0 million available | N/A |
| Term Loan | $30.0 million | 4.60% - 4.75% |
| Notes Payable | $36.0 million | 5.10% - 5.50% |
Winmark Corporation (WINA) - Business Model: Key Activities
Franchise Support and Training
Winmark Corporation provides extensive support and training to its franchisees to ensure operational success and brand consistency. As of September 28, 2024, Winmark operated 1,343 franchises across various brands including Plato’s Closet, Once Upon A Child, and Play It Again Sports. The company focuses on equipping franchisees with the necessary tools and resources to drive profitability and customer satisfaction.
Marketing and Brand Management
Marketing is a critical component of Winmark's strategy. The company invests significantly in marketing initiatives to enhance brand visibility and attract customers. In the first nine months of 2024, selling, general, and administrative expenses, which include marketing costs, totaled $19.0 million, reflecting a 1.5% increase compared to $18.7 million in the same period of 2023. This increase is attributed primarily to heightened advertising and promotional activities.
| Marketing Expense Details | 2024 (9 Months) | 2023 (9 Months) |
|---|---|---|
| Total Selling, General and Administrative Expenses | $19.0 million | $18.7 million |
| Increase in Marketing Expenses | 1.5% | N/A |
Monitoring Franchise Compliance and Performance
Winmark places a strong emphasis on monitoring franchise compliance and performance. This includes regular assessments of franchise operations to ensure adherence to brand standards and operational guidelines. During the first nine months of 2024, the franchise segment's operating income increased to $38.8 million, up from $37.6 million in the same period of 2023, largely due to increased royalty revenues and effective franchise management.
| Franchise Performance Metrics | 2024 (9 Months) | 2023 (9 Months) |
|---|---|---|
| Operating Income from Franchising | $38.8 million | $37.6 million |
| Royalty Revenue | $54.6 million | $53.1 million |
Winmark Corporation (WINA) - Business Model: Key Resources
Strong brand portfolio (Plato’s Closet, Once Upon A Child, etc.)
Winmark Corporation operates a robust franchise system with a strong brand portfolio that includes Plato's Closet, Once Upon A Child, Play It Again Sports, Style Encore, and Music Go Round. As of September 28, 2024, the total number of franchises operating under these brands was 1,343, reflecting an increase from prior periods. The company’s franchise revenue is significantly driven by royalties, which totaled $54.6 million for the first nine months of 2024, up from $53.1 million in the same period of 2023, representing a 2.8% increase.
| Brand | Number of Franchises (as of Sept 28, 2024) | Franchise Revenue (9M 2024) |
|---|---|---|
| Plato’s Closet | 515 | $14.8 million |
| Once Upon A Child | 425 | $12.1 million |
| Play It Again Sports | 301 | $10.4 million |
| Style Encore | 68 | $2.5 million |
| Music Go Round | 34 | $1.5 million |
Experienced management team
Winmark's management team is a pivotal resource, bringing extensive experience in franchising and retail operations. This expertise has been instrumental in driving growth and maintaining strong operational margins. For the first nine months of 2024, Winmark reported total revenues of $61.7 million, a slight decrease from $63.2 million in the same period in 2023. The management team's strategic focus on franchise expansion and operational efficiency underpins the company's performance.
Established franchise network
The established franchise network of Winmark Corporation is a critical asset. The company reported a net store growth of 36 new franchises in the first nine months of 2024, while maintaining a high franchise renewal rate of 97%. This network has enabled Winmark to generate consistent, recurring revenue streams, with franchise fees contributing $1.2 million in the first nine months of 2024, compared to $1.1 million in the same period of 2023.
| Metric | Value (9M 2024) | Value (9M 2023) |
|---|---|---|
| Total Franchises | 1,343 | 1,307 |
| Franchise Fees | $1.2 million | $1.1 million |
| Franchise Renewal Rate | 97% | 95% |
Winmark Corporation (WINA) - Business Model: Value Propositions
Sustainable business model focused on resale
Winmark Corporation operates a sustainable business model that emphasizes the resale of gently used goods. This approach not only promotes environmental responsibility but also caters to a growing consumer demand for sustainable shopping options. As of September 28, 2024, Winmark had 1,343 franchises operating under various brands, including Plato’s Closet and Play It Again Sports, which facilitate the buying, selling, and trading of second-hand merchandise.
Proven franchise system with ongoing support
Winmark’s franchise system has proven successful, with ongoing support provided to franchisees. In the first nine months of 2024, royalties increased to $54.6 million, up 2.8% from $53.1 million during the same period in 2023, indicating a strong performance across its franchise network. Franchise fees also saw an increase, totaling $1.2 million compared to $1.1 million in the prior year. This consistent growth reflects the effectiveness of Winmark's franchise model and the support structures in place for franchisees.
Diverse product offerings catering to various customer segments
Winmark offers a diverse range of products tailored to different customer segments. The company’s merchandise sales, which include products sold to franchisees, totaled $2.7 million for the first nine months of 2024, down from $3.6 million in the same period in 2023. This decrease is attributed to a decline in technology purchases by franchisees. Despite this, the business model remains robust, leveraging various retail concepts that appeal to both budget-conscious consumers and environmentally aware shoppers.
| Key Financial Metrics | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Total Revenue | $21.51 million | $22.32 million | $61.74 million | $63.20 million |
| Royalties | $19.51 million | $19.21 million | $54.56 million | $53.06 million |
| Franchise Fees | $0.45 million | $0.33 million | $1.18 million | $1.13 million |
| Merchandise Sales | $0.70 million | $0.99 million | $2.74 million | $3.60 million |
| Cost of Merchandise Sold | $0.66 million | $0.94 million | $2.56 million | $3.37 million |
| Selling, General and Administrative Expenses | $5.92 million | $6.25 million | $18.98 million | $18.69 million |
In summary, Winmark Corporation's value propositions are rooted in its sustainable resale business model, a proven franchise system that supports its franchisees, and a diverse product range that meets the needs of various customer segments, all contributing to its ongoing financial success and market relevance.
Winmark Corporation (WINA) - Business Model: Customer Relationships
Ongoing communication with franchisees
Winmark Corporation maintains robust communication channels with its franchisees through various means, including regular meetings, newsletters, and online forums. As of September 2024, Winmark has a total of 1,343 franchises operating under its brands, including Plato’s Closet and Play It Again Sports. The company emphasizes the importance of franchisee feedback, which is integral to improving operational efficiency and enhancing customer service across all stores.
Customer loyalty programs
Winmark Corporation implements customer loyalty programs across its franchises, particularly through stores like Plato’s Closet and Once Upon A Child. These programs aim to increase customer retention and frequency of visits. For instance, loyalty programs often include discounts, exclusive promotions, and points accumulation that can be redeemed for future purchases. The effectiveness of these programs is reflected in the 2.8% increase in royalty revenue, which reached $54.6 million in the first nine months of 2024 compared to $53.1 million in the same period of 2023.
Community engagement initiatives
Community engagement is a cornerstone of Winmark’s business strategy. The company encourages its franchisees to participate in local events and sponsorships, fostering a strong community presence. Initiatives may include organizing local sports events, school fundraisers, and charity drives. These efforts not only enhance brand visibility but also build lasting relationships with customers. The franchise renewal rate, which was 97% in the first nine months of 2024, highlights the effectiveness of these community-driven strategies and their impact on customer loyalty.
| Category | Details | Impact |
|---|---|---|
| Franchise Communication | Regular newsletters, meetings, and online forums | Improved operational efficiency and customer service |
| Loyalty Programs | Discounts, exclusive promotions, points system | Increased customer retention; $54.6 million in royalty revenue |
| Community Engagement | Local events, sponsorships, charity drives | Enhanced brand visibility; 97% franchise renewal rate |
Winmark Corporation (WINA) - Business Model: Channels
Franchise stores located nationwide
As of September 28, 2024, Winmark Corporation operates a total of 1,343 franchises across various brands, including Plato’s Closet, Once Upon A Child, Play It Again Sports, Style Encore, and Music Go Round. The franchise model is a significant channel for Winmark, generating substantial revenue through royalties and franchise fees. In the first nine months of 2024, royalties increased to $54.6 million, a 2.8% rise from $53.1 million in the same period of 2023.
| Brand | Franchises (as of September 28, 2024) | New Openings (2024) | Closed Franchises (2024) |
|---|---|---|---|
| Plato’s Closet | 515 | 11 | 2 |
| Once Upon A Child | 425 | 11 | 2 |
| Play It Again Sports | 301 | 11 | 4 |
| Style Encore | 68 | 3 | 1 |
| Music Go Round | 34 | 0 | 3 |
| Total | 1,343 | 36 | 12 |
Online marketing and social media platforms
Winmark leverages online marketing and social media platforms to enhance brand visibility and engage with customers. This channel includes targeted advertising campaigns on platforms such as Facebook, Instagram, and Google Ads. The company has seen an increase in its digital marketing efforts, contributing to customer acquisition and retention. Advertising-related expenses have increased, reflecting a strategic focus on digital outreach.
Local community events for brand visibility
Participation in local community events is a crucial channel for Winmark to promote its franchise brands. These events allow franchises to connect with local customers, enhancing brand loyalty and awareness. The company supports its franchises in organizing and participating in community-focused activities, which contribute to customer engagement and brand visibility.
Winmark Corporation (WINA) - Business Model: Customer Segments
Cost-conscious consumers seeking value
Winmark Corporation caters to cost-conscious consumers looking for affordable and quality second-hand goods. This demographic is increasingly drawn to resale markets, with the global second-hand market projected to reach $64 billion by 2024. The rise in sustainability awareness and the desire for value-driven purchases are significant motivators for this segment.
In 2024, Winmark reported that approximately 90% of its revenue is generated via royalties from franchisees who operate resale stores under various brands, including Plato’s Closet and Once Upon A Child. The company’s focus on providing value aligns with the evolving shopping habits of these consumers, who prefer purchasing pre-owned items to save money while contributing to environmental sustainability.
Families looking for children’s resale products
Families represent a crucial customer segment, especially through the Once Upon A Child brand, which specializes in children’s resale products. This segment benefits from the affordability of gently used clothing, toys, and baby gear. The demand for such products has seen a steady increase, driven by economic factors and the growing preference for sustainable shopping practices among families.
Statistics indicate that 70% of parents are willing to buy second-hand items for their children, highlighting a strong market for Winmark's offerings. The company currently operates 425 Once Upon A Child franchises, which have shown resilience and growth, evidenced by a 98% renewal rate of franchise agreements. This reflects a stable demand for children's resale products, making it a reliable revenue stream for Winmark.
Athletes and fitness enthusiasts
Another significant customer segment for Winmark is athletes and fitness enthusiasts, targeted through the Play It Again Sports brand. This segment seeks high-quality, gently used sports gear and equipment, which can be expensive when purchased new. The fitness resale market is thriving, with a growing number of consumers opting for second-hand equipment to save money while maintaining an active lifestyle.
In 2024, Play It Again Sports operates 301 locations, contributing to the overall franchise revenue of approximately $60 million for the first nine months. This brand has capitalized on the trend of sustainable living and smart shopping, attracting customers who value both fitness and financial savings. The company’s focus on providing a wide range of sporting goods at competitive prices has positioned it well within this growing market.
| Customer Segment | Key Characteristics | Revenue Contribution | Franchise Locations (2024) |
|---|---|---|---|
| Cost-conscious consumers | Seeking affordable second-hand goods | 90% of total revenue | 1,343 |
| Families | Looking for children’s resale products | Significant growth in franchise revenue | 425 (Once Upon A Child) |
| Athletes and fitness enthusiasts | Seeking quality sports gear | Contributes to $60 million revenue | 301 (Play It Again Sports) |
Winmark Corporation (WINA) - Business Model: Cost Structure
Selling, General and Administrative Expenses
Selling, general and administrative (SG&A) expenses for Winmark Corporation amounted to $19.0 million for the first nine months of 2024, representing an increase of 1.5% compared to $18.7 million during the same period in 2023. This increase was primarily driven by heightened advertising-related expenses and costs associated with outside services.
| Period | SG&A Expenses (in millions) | Year-over-Year Change (%) |
|---|---|---|
| 9 Months Ended September 28, 2024 | $19.0 | 1.5% |
| 9 Months Ended September 30, 2023 | $18.7 | - |
Franchise Support and Training Costs
Franchise support and training costs are integral to maintaining the operational efficiency of Winmark Corporation's franchisees. The company has consistently invested in franchisee training programs, though specific figures for these costs were not detailed in the latest reports. However, franchise fees collected increased to $1.2 million in the first nine months of 2024 from $1.1 million in the same period of 2023.
Marketing and Advertising Expenditures
Marketing and advertising expenditures have seen fluctuations as the company continues to adapt its strategies. In the first nine months of 2024, advertising-related expenses were a significant component of the SG&A increase. The overall marketing budget reflects a strategic focus on enhancing brand visibility across its franchise brands, which include Plato’s Closet, Once Upon A Child, and Play It Again Sports. The detailed allocation of these expenditures is not explicitly outlined; however, the increase in SG&A suggests a growing commitment to marketing efforts.
| Expenditure Type | 2024 (in millions) | 2023 (in millions) |
|---|---|---|
| Franchise Fees | $1.2 | $1.1 |
| SG&A Expenses | $19.0 | $18.7 |
Winmark Corporation (WINA) - Business Model: Revenue Streams
Royalties from Franchise Operations
Winmark Corporation generates a substantial portion of its revenue from royalties received from its franchise operations. For the first nine months of 2024, royalties totaled $54.6 million, up from $53.1 million during the same period in 2023, reflecting a 2.8% increase. This growth is primarily attributed to an increase in the number of franchise stores operating under its brands.
Franchise Fees for New Franchise Openings
In addition to royalties, Winmark earns revenue through franchise fees collected from new franchise openings. For the first nine months of 2024, franchise fees reached $1.2 million, compared to $1.1 million for the same period in 2023.
Leasing Income from Equipment Rentals
Winmark also derives income from leasing equipment, although this segment has seen a decline. The leasing income for the first nine months of 2024 was $1.7 million, a decrease from $3.9 million in the same period of 2023. This decrease is primarily due to a reduction in operating lease income as the company has ceased to solicit new leasing customers, focusing instead on an orderly run-off of its leasing portfolio.
| Revenue Stream | Q3 2024 Revenue | Q3 2023 Revenue | 9M 2024 Revenue | 9M 2023 Revenue |
|---|---|---|---|---|
| Royalties | $19.5 million | $19.2 million | $54.6 million | $53.1 million |
| Franchise Fees | $0.5 million | $0.3 million | $1.2 million | $1.1 million |
| Leasing Income | $0.3 million | $1.3 million | $1.7 million | $3.9 million |
| Merchandise Sales | $0.7 million | $1.0 million | $2.7 million | $3.6 million |
| Other Revenue | $0.5 million | $0.5 million | $1.6 million | $1.5 million |
Overall, Winmark's revenue streams are heavily reliant on franchise operations, with royalties being the most significant contributor, followed by franchise fees and leasing income. The company's strategic decision to reduce its leasing activities has impacted leasing revenue but has allowed it to focus on enhancing its franchise operations.
Updated on 16 Nov 2024
Resources:
- Winmark Corporation (WINA) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Winmark Corporation (WINA)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Winmark Corporation (WINA)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.