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® and Music Go Round®. In addition, the Company sells inventory to its Play It Again Sports franchisees through its buying group. 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 year 2012 was a 52-week fiscal year and 2011 was 53-week fiscal year.

Following is a summary of our franchising activity for the fiscal year ended December 29, 2012:

	12/31/11	OPENED	CLOSED		12/29/12
Plato’s Closet Franchises - US and Canada	324	30	(0	)	354
Play It Again Sports Franchises - US and Canada	325	3	(13	)	315
Once Upon A Child Franchises - US and Canada	247	20	(1	)	266
Music Go Round Franchises - US	34	1	(2	)	33
Total Franchised Stores	930	54	(16	)	968