Winmark Corporation has 87 employees.
Last year the stores it franchises sold $1.682 billion worth of used clothing, toys, sporting goods and musical instruments.
Winmark owns none of those stores. Its own annual report says so in a footnote, flatly: all stores are owned and operated by franchisees. Winmark does not own or operate any corporate stores.
Out of $86.1 million of revenue, it kept $54.6 million as operating profit. That is a 63.4 percent operating margin, a figure the company prints in its own filing.
And its shareholders’ equity is negative $53.7 million.
All three of those things are true at the same time. The third one is not a warning sign. It is the design.