1. Organization and Business:

Winmark Corporation and subsidiaries (the Company) offers licenses to operate franchises using the service marks Plato’s Closet®, Play It Again Sports®, Once Upon A Child®, Music Go Round® and Style Encore®. In addition, the Company sells point-of-sale system hardware to its franchisees and certain merchandise to its Play It Again Sports franchisees. The Company also operates both middle market and small-ticket equipment leasing businesses under the Winmark Capital® and Wirth Business Credit® marks. The Company has a 52/53-week fiscal year that ends on the last Saturday in December. Fiscal years 2013 and 2012 were a 52-week fiscal years and fiscal year 2011 was a 53-week fiscal year.

Following is a summary of our franchising activity for the fiscal year ended December 28, 2013:

	12/29/12	OPENED	CLOSED		12/28/13
Plato’s Closet Franchises - US and Canada	354	39	(2	)	391
Once Upon A Child Franchises - US and Canada	266	20	(4	)	282
Play It Again Sports Franchises - US and Canada	315	6	(21	)	300
Music Go Round Franchises - US	33	1	(5	)	29
Style Encore Franchises - US	—	3	—		3
Total Franchised Stores	968	69	(32	)	1,005