How Much Does a Play It Again Sports Franchise Owner Make?

Officially, Item 19 reports store revenue and Gross Profit—not owner earnings. For fiscal 2025, the 287-store reporting cohort produced Average Gross Sales of $1,172,630 and Average Gross Profit of $625,208. The FDD defines Gross Profit as Gross Sales minus Cost of Goods Sold, including freight and shrinkage, before rent, payroll, royalty, advertising, software, insurance, utilities, and other operating expenses.

The cohort is broad but not purely U.S.-only: it combines U.S. and Canadian franchised stores. The FDD states that the two groups did not have material operating differences for this representation, but it does not publish separate U.S. sales or Gross Profit. The figures are cited from the 2026 FDD, Item 19, pages 38–41; no matching public official FDD link was verified.

The estimate starts with compatible FDD Gross Sales and Gross Profit, then subtracts recurring store costs that Item 19 omits. The Conservative scenario uses the fourth-quartile FDD averages, the Base scenario uses the total-system FDD averages, and the Upside scenario uses the top-quartile FDD averages. These anchors are official historical cohort statistics, but the expense ratios below are analytical assumptions rather than franchisor-reported results.

• FDD revenue and Gross Profit anchors: $533,437 and $300,086 for Conservative; $1,172,630 and $625,208 for Base; $2,104,837 and $1,088,127 for Upside.
• Recurring franchise obligations: 5% Continuing Fee, a 5% combined cooperative/local advertising minimum, $1,500 annual Marketing Fee, and $295 monthly Software Fee. The $5,040 fixed total annualizes the current Software Fee for a steady-state year. Source: 2026 FDD, Item 6, pages 7–11.
• Labor and payroll burden: 30%, 22%, and 18% of sales across the three scenarios. The 2023 U.S. Census Bureau Annual Integrated Economic Survey reported $58.026 billion of sales and $7.147 billion of annual payroll for NAICS 451110 Sporting Goods Stores, a derived wage-payroll ratio of 12.3%. The model uses higher all-in labor assumptions to allow for payroll taxes, benefits, management coverage, and small-store staffing variance. The uplift is editorial.
• Other operating costs: 17%, 14%, and 11% of sales. These editorial assumptions combine occupancy, utilities, insurance, repairs, payment processing, supplies, professional services, and routine local overhead not disclosed in Item 19.
• Owner management value: $79,930, the May 2023 BLS annual mean wage for General and Operations Managers in Sporting Goods, Hobby, and Musical Instrument Retailers. It is an employee wage benchmark, not an owner salary promise and not fully loaded compensation.

Calculations use full-precision inputs and round final dollar values to the nearest dollar. Quartile anchors describe past FDD cohorts; they are not assigned probabilities and the Base scenario is not presented as the most likely result.

Not as an absentee model under the 2026 FDD. Item 15 states that an individual franchisee must personally manage the franchised business and that operation of the store must be the owner’s primary job responsibility. A corporate or partnership franchisee must designate an individual with at least 50% of the equity and voting interest who personally manages the store. This requirement applies to the first store; an owner operating multiple stores may delegate management of additional stores to managers.

That structure changes the meaning of “earnings.” For a first store, the most decision-useful figure is owner-operator benefit: residual store economics plus the value of management labor performed by the owner. For an additional manager-run unit, the more relevant figure is the residual after a normal manager expense. The model does not call the $79,930 labor value pure profit because it compensates the owner for work.

In the Base scenario, $625,208 of official Average Gross Profit becomes about $80,758 of manager-run residual or $160,688 of owner-operator benefit. The largest modeled deductions are labor, other operating costs, and the combined 10% royalty-and-advertising burden.

The displayed line items are rounded; the totals use full-precision calculations. The model excludes financing interest and principal, depreciation, capital expenditures, modernization reserves, and personal income taxes. It also excludes the currently $0 Technology Fee. If Winmark establishes the FDD-estimated $500–$2,500 annual Technology Fee, or raises the total advertising requirement from 5% to 6%, owner benefit would be lower.

The 2026 FDD’s initial investment of $346,300 to $459,700 is startup capital, not an annual operating expense, and is therefore not subtracted from one year of sales. Debt service must be modeled separately based on the buyer’s actual financed amount, rate, and term.

The strongest part of the analysis is the FDD revenue and Gross Profit distribution; the weakest part is the operating-expense bridge. Several limitations materially affect interpretation:

• Mixed geography: Item 19 combines U.S. and Canadian stores. Winmark states there are no material operating differences for the representation, but it does not disclose a U.S.-only sales or Gross Profit table.
• Average versus median: Average Gross Sales of $1,172,630 exceeds Median Gross Sales of $1,014,764. Only 40% of stores attained or exceeded the average, so the average should not be described as typical.
• Eligibility exclusions: the 287-store cohort excludes 22 stores that opened or transferred during fiscal 2025. New-store ramp-up and transfer economics are therefore not captured.
• No company-store proxy: Item 20 and Winmark’s Form 10-K show zero company-owned Play It Again Sports stores, so there is no same-brand corporate operating-profit benchmark to fill the gap.
• Industry mismatch: Census NAICS 451110 primarily covers new sporting goods retail, while Play It Again Sports sells both used and new goods and buys inventory from consumers. The payroll benchmark is directionally relevant, not economically identical.
• Wage timing: the owner-labor proxy uses May 2023 industry-specific BLS data because it provides the closest directly matched occupation-and-industry estimate. Local 2026 compensation can be higher or lower.

Item 20 provides useful context rather than proof of profitability. The system ended fiscal 2025 with 309 franchised stores—274 in the United States and 35 in Canada—and no company-owned stores. The U.S. count rose from 265 to 274 during the year, with 15 openings and six terminations. Those population changes do not reveal the economics of individual stores.

A buyer should replace every modeled expense ratio with evidence from comparable Play It Again Sports stores. The FDD says Winmark maintains written substantiation for Item 19 and will provide it on reasonable request. The most useful diligence is a store-level profit-and-loss bridge that preserves the same definitions used in Item 19.

• Request Item 19 written substantiation and confirm how Gross Sales, Cost of Goods Sold, freight, shrinkage, and Gross Profit are calculated.
• Ask franchisees in the same sales quartile for payroll, payroll taxes, benefits, rent, common-area charges, utilities, card fees, insurance, repairs, and local administrative costs as percentages of sales.
• Separate owner wages, draws, distributions, retained earnings, and business profit. Ask how many hours the principal owner works and which paid roles that owner replaces.
• Compare mature same-owner stores with new, transferred, and recently remodeled locations rather than assuming the 287-store cohort represents ramp-up performance.
• Verify whether the local advertising obligation is 5% or has been increased, whether a cooperative applies, and whether a North American Ad Fund or Technology Fee is in effect.
• Model interest, principal payments, working-capital needs, inventory seasonality, and capital expenditures separately from operating earnings.
• Interview both current and former franchisees listed in Item 20 and ask for dollar results, not only sales growth or Gross Profit percentages.

The strongest defensible range is approximately $71,000 to $342,000 in annual pre-tax owner-operator benefit for one mature store under the stated scenarios. It is scenario-based, not an official earnings claim. The corresponding manager-run residual ranges from about a $9,000 loss to $262,000 before financing, depreciation, capital expenditures, and personal taxes.

The most important earnings driver is the combination of sales volume and labor efficiency after Gross Profit. The largest unresolved uncertainty is that Item 19 does not disclose store operating expenses or owner compensation, while its performance cohort mixes U.S. and Canadian stores. Before using the range in an investment decision, a buyer should verify Item 19 substantiation, obtain comparable-store operating expense data, and test the assumptions through franchisee interviews.