In this FDD Talk post, you’ll learn the following:

• Section I – Estimated initial investment (franchise costs) for a Style Encore franchise, based on Item 7 of the company’s 2022 FDD

• Section II – Initial franchise fee, royalty fee, and marketing fee for a Style Encore franchise, based on Items 5 and 6 of the company’s 2022 FDD

• Section III – Number of franchised and company-owned Style Encore outlets at the start of the year and the end of the year for 2019, 2020, and 2021, based on Item 20 of the company’s 2022 FDD

• Section IV – Background information on the Style Encore franchise opportunity, including relevant news updates

• Section V – Presentation and analysis of Style Encore’s financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2022 FDD, including information on the:

• 2021 average, median, high, and low gross sales and average and median gross profit for the 66 franchised Style Encore Stores in the United States that had been in operation by the same franchisee or owners for the 12-month period ended December 25, 2021, grouped by year opened (2020, 2019, 2018, 2017, 2016, and 2015 and prior)

• 2021 average, median, high, and low gross sales and average and median gross profit for the first, second, third, and fourth quartiles of the 66 franchised Style Encore Stores in the United States that had been in operation by the same franchisee or owners for the 12-month period ended December 25, 2021

• number and percentage of franchised Style Encore Stores in the United States that had been in operation by the same franchisee or owners for the 12-month period ended December 25, 2021, grouped by range of gross sales ($0 to $250,000; $250,001 to $500,000; $500,001 to $1,000,000; $1,000,001 to $2,000,000; and greater than $2,000,000)

• Section VI – Key ratios, comparables, computations, and analyses for the Style Encore franchise opportunity (exclusive content for Platinum subscribers)

Section I – Style Encore Franchise Costs

• Style Encore franchise costs, based on Item 7 of the company’s 2022 FDD:

• Initial Franchise Fee:  $25,000
• Fixtures and Supplies:  $40,000 to $55,000
• Signs:  $8,000 to $12,000
• Security Cameras:  $1,000 to $5,000
• Point-of-Sale (POS) System:  $25,200 to $32,400
• Leasehold Improvements:  $10,500 to $20,000
• Build-Out:  $20,000 to $50,000
• Deposits and Business Licenses:  $3,000 to $12,000
• Opening Inventory:  $60,000 to $80,000
• Miscellaneous Pre-Opening Expenses:  $35,000 to $65,000
• Rent for First 3 Months:  $12,500 to $20,000
• Additional Funds for 3 Months:  $30,000 to $33,000
• Estimated Total Franchise Costs:  $270,200 to $409,400

Section II – Style Encore’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Style Encore’s initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2022 FDD:

• Initial Franchise Fee:  $25,000
• Continuing Fee:  5% of Gross Sales
• Marketing Fee:  $1,500 per year
• Cooperative Advertising:  maximum amount is 5% of Gross Sales
• Local Marketing Expenses:  minimum amount, when combined with cooperative advertising expenses, is 5% of Gross Sales
• Advertising Fee:  if Winmark imposes this fee, you will pay up to 2% of Gross Sales

Section III – Number of Franchised and Company-Owned Style Encore Outlets

Franchised

2019

• Outlets at the Start of the Year:  67
• Outlets at the End of the Year:  68
• Net Change:  +1

2020

• Outlets at the Start of the Year:  68
• Outlets at the End of the Year:  69
• Net Change:  +1

2021

• Outlets at the Start of the Year:  69
• Outlets at the End of the Year:  71
• Net Change:  +2

Company-Owned

2019

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

2020

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

2021

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

Section IV – Background Information on the Style Encore Franchise

16 Things You Need to Know About the Style Encore Franchise

Parent Company Experienced Strong Growth Across All Brands in 2021

1.  At the end of January 2022, Winmark Corporation, franchisor of sustainable resale brands Style Encore, Once Upon A Child, Plato’s Closet, Play It Again Sports, and Music Go Round, said that it experienced strong growth in 2021. Winmark’s franchise locations extended the life of 158 million items, and Winmark expanded its available territories to over 2,800 across all five of its brands throughout the United States and Canada.

2.  Winmark – the Resale Company closed out the year with 46 awarded franchises and had its eyes set on aggressive franchise development leading into 2022 as it focuses on its mission of providing Resale for Everyone.

3.  While the past two years have been challenging for many retail brands, Winmark’s resale brands defied the odds and grew to meet the increasing demand for quality used, secondhand products. In fact, since 2010, Winmark brands have recycled over 1.3 billion items.

4.  The success achieved by Winmark has been honored by the franchise industry, as Plato’s Closet, Once Upon A Child, and Play It Again Sports made an appearance on Franchise Times’ 2021 Top 500. Amid these prestigious rankings, Once Upon A Child hit a major brand milestone, opening its 400th location in September in Douglasville, GA. Winmark also announced several partnerships, including Blake Bolden’s emBolden her mentorship program; USA Hockey, becoming the Official Resale Partner of USA Hockey and an official partner of the organization; and the LA Kings and Kings Care Foundation as the Official Resale Partner of the LA Kings.

5.  Renae Gaudette, president of franchising for Winmark Corporation, said, “The future of the resale industry remains strong and promising. As we continue to grow, our impact will only strengthen as we aim to further our position as the industry leader in resale and sustainability. We are on a simple mission to provide Resale for Everyone. Our brands are the leaders in the resale space, and our franchisee partners are executing at a high level. Our goal is to find more franchise partners to fill those 2,800+ territories so that every community has the opportunity to benefit from our brands, and similarly those franchisees are awarded the opportunity to be part of a successful network of sustainable resale brands.”

6.  By prioritizing innovation, Winmark has continued enhancing its multichannel offerings and roll-out of its e-commerce system and social selling programs to assist franchisees. This was created in an effort to provide franchisees additional resources for online selling options that has provided tremendous value to their businesses as well as to their customers.

Parent Company Announces Territory Expansion in Wisconsin

7.  At the end of March 2021, Winmark Corporation announced that the Sheboygan, Wisconsin market is now open and available for new Style Encore, Once Upon A Child, Plato’s Closet, and Play It Again Sports franchise locations. Each of the Winmark brands has set the bar high in terms of industry standards to become the most dependable choice as consumers are continuously looking for high-quality, affordable, used retail resale shopping options.

8.  Renae Gaudette, president of franchising for Winmark Brands, said, “While the past year has been challenging for many retail brands, Winmark’s resale retail franchise brands saw growth and with our expansion of franchise opportunities in Sheboygan, Wisconsin, we expect that growth to continue. We continually review potential markets for future expansion of all Winmark brands and are looking forward to adding additional markets to our portfolio.”

Drawing in Women Entrepreneurs

9.  According to Winmark Corporation, women entrepreneurs are drawn to franchising at Style Encore due to their insight into the growing Millennial and Gen Z consumer base and how to mesh professionalism and personality into fashion. Style Encore’s success was built in collaboration with its brilliant women franchise partners. Franchising is an attractive avenue for success for entrepreneurs of all walks of life, but it’s an increasingly appealing option for women in particular; more than 30 percent of all franchises are owned or co-owned by women. Style Encore is unique from other retail franchises in the market since 90% of Style Encore’s franchises are owned by women.

10.  The great resignation is an ongoing concern for some businesses, while for Style Encore it’s an opportunity; there’s a burgeoning population of women on the search for high-quality but affordable clothing options that will suit their professional needs. Women who are Style Encore franchise partners can cater to professional women looking for clothing to match their new career aspirations.

11.  Many women are familiar with how frequently clothing retailers focus on teens and kids over adult women. Tailoring Style Encore’s clothing options to professional women has sealed its success. Style Encore franchisees have a constant stream of customers year-round, year after year, despite the recent resignation trend. Style Encore franchisees are met with high demand in their communities and will find that their investment makes not only a savvy business move but also a way to pay forward their success to other women.

12.  Style Encore’s franchisees are part of a growing portion of women business owners who generate more than $1.4 trillion in sales and employ approximately 8 million people nationally. However, Style Encore’s focus on women doesn’t mean that franchisees only satisfy a specific foothold; according to a recent report, women influence 85% of consumer spending.

Company History

13.  Building on the success of its other resale brands, Winmark Corporation decided to launch its own brand, Style Encore, in 2013. Since Winmark already has a children’s resale brand (Once Upon A Child) and a teen resale clothing brand (Plato’s Closet), Style Encore focuses on buying and reselling gently-used women’s clothing. The first Style Encore store opened in August 2013 in Texas.

14.  Unlike some other resale brands, Style Encore focuses on only buying and selling the latest trends in women’s clothing. Style Encore also tries to stock name brand items across different price points such as Gucci, Louis Vuitton, Old Navy, and Gap.

15.  As the newest brand in Winmark’s portfolio, Style Encore has a smaller presence across North America than its sister brands.

Entrepreneur’s Franchise 500

16.  Style Encore did not rank on Entrepreneur’s 2022 Franchise 500 list.

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Style Encore Franchise (Item 19, 2022 FDD)

• The following is a financial performance representation titled “Style Encore Unaudited Statement of Average Annual Sales and Gross Profit.”

• The gross profit figures in this Item 19 do reflect the cost of sales but do not reflect the operating expenses that must be deducted from the gross profit figures to obtain your net income or profit.

• The following statement of average annual sales and gross profits includes annual gross sales and gross profits as reported by 66 franchised Style Encore Stores located in the United States and Canada that commenced operations during the years 2013 through 2020.

• This statement includes information from only those franchised Style Encore Stores located in the United States and Canada that had been in operation for the 12-month period ended December 25, 2021, with the understanding that some of these Stores had temporary closures as a result of COVID-19, as further described below.

• There are no material financial and operational characteristics of the U.S. Stores that differ materially from the Canadian Stores included in this financial performance representation.

• No other franchised Style Encore Stores are included in this statement due to insufficient history of operations (not in operation by the same franchisee or owners for the 12-month period ended December 25, 2021 or transferred during this period).

• The financial statements Winmark receives from franchisees for these stores are unaudited, and Winmark does not audit or independently verify, or express an opinion regarding, these statements.

• There were 66 franchised Style Encore Stores which had been in operation by the same franchisee or owners for the 12-month period ended December 25, 2021. All 66 franchised Style Encore Stores are reflected in the average.

• This financial performance representation does not include information for the 5 Style Encore Stores that opened or transferred in 2021. No Stores closed in 2021 after being opened for less than 12 months.

• Due to governmental regulations and other restrictions related to COVID-19 in many jurisdictions during 2021, some Style Encore Stores were forced to temporarily close for extended periods of time during the year. The temporary closures and COVID-19 regulations and restrictions impacted the Stores’ sales.

• During the temporary in-store closures, some Stores continued to operate by offering curbside and/or online sales.

• Despite these temporary closures, as of the date of the current Disclosure Document, Style Encore does not anticipate that COVID-19 has or will significantly change its business model or the way its Business System operates.

• For purposes of clarification, the 66 Stores includes all Stores that were temporarily closed as a result of COVID-19.

Part 1 – Statement of Average Gross Sales and Gross Profit of the 66 Franchised Style Encore Stores for the Fiscal Year Ended December 25, 2021

Year Opened – 2020

• Number of Stores Reported:  4
• Number and Percentage of Stores Attaining or Exceeding Average Gross Sales:  0/0%
• Number and Percentage of Stores Attaining or Exceeding Average Gross Profit:  0/0%
• 2021 Average Gross Sales:  $308,605
• 2021 Median Gross Sales:  $325,298
• 2021 Average Gross Profit:  $178,383
• 2021 Median Gross Profit:  $186,500
• Average Gross Profit Percentage:  57.80%
• Sales Range:  $157,572 to $426,253

Year Opened – 2019

• Number of Stores Reported:  7
• Number and Percentage of Stores Attaining or Exceeding Average Gross Sales:  1/14%
• Number and Percentage of Stores Attaining or Exceeding Average Gross Profit:  1/14%
• 2021 Average Gross Sales:  $512,435
• 2021 Median Gross Sales:  $462,882
• 2021 Average Gross Profit:  $279,046
• 2021 Median Gross Profit:  $273,553
• Average Gross Profit Percentage:  54.45%
• Sales Range:  $197,878 to $1,057,325

Year Opened – 2018

• Number of Stores Reported:  8
• Number and Percentage of Stores Attaining or Exceeding Average Gross Sales:  1/13%
• Number and Percentage of Stores Attaining or Exceeding Average Gross Profit:  1/13%
• 2021 Average Gross Sales:  $468,042
• 2021 Median Gross Sales:  $476,857
• 2021 Average Gross Profit:  $277,393
• 2021 Median Gross Profit:  $279,330
• Average Gross Profit Percentage:  59.27%
• Sales Range:  $173,621 to $740,871

Year Opened – 2017

• Number of Stores Reported:  9
• Number and Percentage of Stores Attaining or Exceeding Average Gross Sales:  2/22%
• Number and Percentage of Stores Attaining or Exceeding Average Gross Profit:  2/22%
• 2021 Average Gross Sales:  $571,546
• 2021 Median Gross Sales:  $472,758
• 2021 Average Gross Profit:  $344,385
• 2021 Median Gross Profit:  $278,182
• Average Gross Profit Percentage:  60.25%
• Sales Range:  $161,887 to $1,397,485

Year Opened – 2016

• Number of Stores Reported:  10
• Number and Percentage of Stores Attaining or Exceeding Average Gross Sales:  8/80%
• Number and Percentage of Stores Attaining or Exceeding Average Gross Profit:  8/80%
• 2021 Average Gross Sales:  $923,517
• 2021 Median Gross Sales:  $907,699
• 2021 Average Gross Profit:  $562,994
• 2021 Median Gross Profit:  $545,736
• Average Gross Profit Percentage:  60.96%
• Sales Range:  $510,254 to $1,686,904

Year Opened – 2015 and Prior

• Number of Stores Reported:  28
• Number and Percentage of Stores Attaining or Exceeding Average Gross Sales:  17/61%
• Number and Percentage of Stores Attaining or Exceeding Average Gross Profit:  16/57%
• 2021 Average Gross Sales:  $876,726
• 2021 Median Gross Sales:  $795,392
• 2021 Average Gross Profit:  $517,087
• 2021 Median Gross Profit:  $483,029
• Average Gross Profit Percentage:  58.98%
• Sales Range:  $330,339 to $2,310,311

Total

• Number of Stores Reported:  66
• Number and Percentage of Stores Attaining or Exceeding Average Gross Sales:  29/44%
• Number and Percentage of Stores Attaining or Exceeding Average Gross Profit:  28/42%
• 2021 Average Gross Sales:  $719,594
• 2021 Median Gross Sales:  $628,993
• 2021 Average Gross Profit:  $425,664
• 2021 Median Gross Profit:  $379,271
• Average Gross Profit Percentage:  59.15%

• “Gross Sales” means all revenues the franchisee receives from the sale of goods and services, whether by cash or by check, credit card or trade, in connection with the Store, less sales tax and customer refunds and returns.

• Average Gross Profit equals Gross Sales less Cost of Goods Sold. Gross Profit does not reflect any expenses related to the operation of a Style Encore Store other than Cost of Goods Sold.

Part 2 – Statement of Sales Ranges by Quartile for the 66 Franchised Style Encore Stores Open on December 25, 2021 That Had Been in Operation for at Least 12 Months by the Same Franchisee or Owners for the 12-Month Period Ended December 25, 2021

• Quartile refers to that portion of the total number of Stores open that represents 25%. For example, the first Quartile identifies those Stores that were in the top 25% of all Stores in Gross Sales.

• These results relate to specific Style Encore Stores located in the United States. Your individual results may differ.

1st Quartile

• Number of Stores:  16
• 2021 Gross Sales Range by Quartile:  $1,002,986 to $2,310,311
• 2021 Quartile Average Gross Sales:  $1,257,631
• 2021 Quartile Median Gross Sales:  $1,134,449
• Number and Percentage of Stores Attaining or Exceeding Quartile Average Gross Sales:  5/31%
• 2021 Quartile Average Gross Profit:  $732,150
• 2021 Quartile Median Gross Profit:  $676,775
• Number and Percentage of Stores Attaining or Exceeding Quartile Average Gross Profit:  5/31%
• Quartile Average Gross Profit Percentage:  58.22%

2nd Quartile

• Number of Stores:  16
• 2021 Gross Sales Range by Quartile:  $649,054 to $967,398
• 2021 Quartile Average Gross Sales:  $805,079
• 2021 Quartile Median Gross Sales:  $772,661
• Number and Percentage of Stores Attaining or Exceeding Quartile Average Gross Sales:  7/44%
• 2021 Quartile Average Gross Profit:  $486,873
• 2021 Quartile Median Gross Profit:  $475,411
• Number and Percentage of Stores Attaining or Exceeding Quartile Average Gross Profit:  7/44%
• Quartile Average Gross Profit Percentage:  60.48%

3rd Quartile

• Number of Stores:  17
• 2021 Gross Sales Range by Quartile:  $436,473 to $638,487
• 2021 Quartile Average Gross Sales:  $520,911
• 2021 Quartile Median Gross Sales:  $517,241
• Number and Percentage of Stores Attaining or Exceeding Quartile Average Gross Sales:  7/41%
• 2021 Quartile Average Gross Profit:  $312,243
• 2021 Quartile Median Gross Profit:  $306,745
• Number and Percentage of Stores Attaining or Exceeding Quartile Average Gross Profit:  7/41%
• Quartile Average Gross Profit Percentage:  59.94%

4th Quartile

• Number of Stores:  17
• 2021 Gross Sales Range by Quartile:  $157,572 to $427,079
• 2021 Quartile Average Gross Sales:  $331,433
• 2021 Quartile Median Gross Sales:  $355,409
• Number and Percentage of Stores Attaining or Exceeding Quartile Average Gross Sales:  11/65%
• 2021 Quartile Average Gross Profit:  $103,019
• 2021 Quartile Median Gross Profit:  $207,255
• Number and Percentage of Stores Attaining or Exceeding Quartile Average Gross Profit:  12/71%
• Quartile Average Gross Profit Percentage:  58.24%

Part 3 – Number of Stores, Average and Median Gross Sales, Lowest and Highest Gross Sales Amount in Each Range, and Percentage of Total Number of Stores That Fell Within Certain Ranges of Gross Sales for 2021

• Based on information reported by the 66 Style Encore Stores which had been in operation by the same franchisee or owner for the 12-month period ended December 25, 2021, the following chart sets forth the number of Stores, average and median Gross Sales, the lowest and highest Gross Sales amount in each range, and the percentage of total number of Stores that fell within certain ranges of Gross Sales for 2021:

2021 Range of Gross Sales:  $0 to $250,000

• Number of Stores Falling Within Range:  4
• Average Gross Sales for Stores Within Range:  $172,739
• Number and Percent of Stores Exceeding Average Gross Sales for Stores Within Range:  2/50%
• Gross Sales for Lowest Store Within Range:  $157,572
• Gross Sales for Highest Store Within Range:  $197,878
• Median Gross Sales for Stores Within Range:  $167,754
• Percent of Total Number of Stores (66) Within Range:  6.06%

2021 Range of Gross Sales:  $250,001 to $500,000

• Number of Stores Falling Within Range:  19
• Average Gross Sales for Stores Within Range:  $405,610
• Number and Percent of Stores Exceeding Average Gross Sales for Stores Within Range:  11/58%
• Gross Sales for Lowest Store Within Range:  $295,186
• Gross Sales for Highest Store Within Range:  $472,758
• Median Gross Sales for Stores Within Range:  $408,344
• Percent of Total Number of Stores (66) Within Range:  28.79%

2021 Range of Gross Sales:  $500,001 to $1,000,000

• Number of Stores Falling Within Range:  27
• Average Gross Sales for Stores Within Range:  $702,725
• Number and Percent of Stores Exceeding Average Gross Sales for Stores Within Range:  13/48%
• Gross Sales for Lowest Store Within Range:  $510,254
• Gross Sales for Highest Store Within Range:  $967,398
• Median Gross Sales for Stores Within Range:  $686,577
• Percent of Total Number of Stores (66) Within Range:  40.91%

2021 Range of Gross Sales:  $1,000,001 to $2,000,000

• Number of Stores Falling Within Range:  15
• Average Gross Sales for Stores Within Range:  $1,187,452
• Number and Percent of Stores Exceeding Average Gross Sales for Stores Within Range:  5/33%
• Gross Sales for Lowest Store Within Range:  $1,002,986
• Gross Sales for Highest Store Within Range:  $1,686,904
• Median Gross Sales for Stores Within Range:  $1,125,859
• Percent of Total Number of Stores (66) Within Range:  22.73%

2021 Range of Gross Sales:  $2,000,000 to $3,000,000

• Number of Stores Falling Within Range:  1
• Average Gross Sales for Stores Within Range:  $2,310,311
• Number and Percent of Stores Exceeding Average Gross Sales for Stores Within Range:  1/100%
• Gross Sales for Lowest Store Within Range:  $2,310,311
• Gross Sales for Highest Store Within Range:  $2,310,311
• Median Gross Sales for Stores Within Range:  $2,310,311
• Percent of Total Number of Stores (66) Within Range:  1.52%

2021 Range of Gross Sales:  Greater Than $3,000,000

• Number of Stores Falling Within Range:  0
• Average Gross Sales for Stores Within Range:  $0
• Number and Percent of Stores Exceeding Average Gross Sales for Stores Within Range:  0/0%
• Gross Sales for Lowest Store Within Range:  $0
• Gross Sales for Highest Store Within Range:  $0
• Median Gross Sales for Stores Within Range:  $0
• Percent of Total Number of Stores (66) Within Range:  0%

Section VI – Style Encore Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️