How Much Does a Style Encore Franchise Owner Make?

It measures store-level Operating Income, not an owner’s salary, draw, distribution or after-tax income. The official 2024 P&L table covers 40 franchised stores that submitted complete and valid statements. Its definition starts with sales, deducts cost of goods sold and operating expenses, then stops before interest, taxes, depreciation, amortization and owner salary.

The distinction matters because the same FDD also reports 2025 average Gross Sales of $959,541 and average Gross Profit of $570,465 for 62 stores. Gross Sales is revenue. Gross Profit subtracts only cost of goods sold. Neither number is owner earnings. The official franchise site publishes those revenue and gross-profit figures, but the 2024 Operating Income table is the stronger evidence for the owner-income question.

The official average P&L converts $894,114 of Gross Sales into $65,110 of Operating Income after cost of goods sold and four operating-expense groups. The bridge is official Item 19 data for fiscal 2024, not an independent margin assumption.

Does the $65,110 include every cash demand on the owner?

No. The official Operating Income definition excludes interest, taxes, depreciation, amortization and owner salary. Financing principal payments are also not an operating expense in this measure. Capital expenditures, remodels, working-capital changes and owner distributions are not separately disclosed in Item 19. Winmark does not offer or guarantee financing, so debt service must be modeled from the buyer’s actual loan terms rather than assumed from the FDD.

For a first store, Style Encore is principally an owner-operator model, so the disclosed Operating Income should not be treated as passive income. Item 15 requires an individual franchisee to be the on-site owner/operator and personally manage the store unless Winmark gives prior consent to delegate. The official Winmark franchise FAQ likewise states that an owner-operator must be in the business.

Item 19 creates a second complication: Labor includes hourly payroll, salaried payroll and payroll taxes, but owner salary was excluded if reported. Consequently, an actively managed store’s Operating Income may contain both residual business profit and compensation for the owner’s labor. A manager-run owner must confirm that a full market manager cost is already included in the store’s labor line before treating the remaining Operating Income as owner cash flow.

The recurring fee structure is already reflected in the Item 19 P&L cohort’s “Continuing Fees & Marketing” line, which averaged $83,103, or 9.3% of sales. For a new store, Item 6 separately requires a 5% Continuing Fee, at least 5% of Gross Sales for cooperative and local marketing combined, a $1,500 annual Marketing Fee, and a $295 monthly Software Fee beginning on the later of the first month after opening or September 1, 2026.

The minimum marketing requirement may rise to 6% of Gross Sales with notice, including up to 3% paid into a North American Ad Fund. A technology fee was $0 at issuance, but Winmark reserved the right to establish one, estimated at $500–$2,500 per store annually. These obligations should not be subtracted again from the official Operating Income figures, because the P&L line already reflects reporting stores’ actual continuing fees and marketing spend.

Use the band as a moderate-confidence central reference, not as a forecast. It is based on a current same-brand FDD and a direct earnings measure, which is stronger than a generic retail margin. Confidence is reduced because the operating-income data are one year older than the 2025 sales disclosure, only 40 of 63 eligible stores reported valid P&Ls, the population combines U.S. and Canadian stores, and owner roles are not separated.

Item 20 adds useful context. Style Encore ended 2025 with 67 franchised stores systemwide, including 51 in the United States and 16 in Canada, and no company-owned stores. During 2025 the system opened two stores and recorded four terminations, ending with two fewer stores than it began. The Winmark 2025 Form 10-K also confirms that Winmark did not own or operate corporate stores, so there is no company-operated Style Encore profit benchmark to compare with franchised stores.

• Location economics: verify rent, common-area maintenance, utilities and local wage rates against the Item 19 facility and labor averages.
• Owner labor: identify the weekly hours and functions the owner will perform, then separate labor compensation from residual business profit.
• Inventory productivity: test buying discipline, shrinkage and gross-profit percentage; average Gross Profit was 57.8% in the 2024 P&L cohort and 59.45% in the broader 2025 sales cohort.
• Financing: model interest and principal separately because neither is fully captured by the headline owner-earnings band.
• Capital needs: reserve for remodels, equipment replacement and working-capital swings rather than treating all Operating Income as distributable cash.

Ask for written Item 19 substantiation and test the exact operating model planned for the proposed U.S. store. The FTC explains that an Item 19 claim must have a reasonable basis and that prospective buyers may request written substantiation. The official FDD also lists current and former franchisees who can clarify payroll, owner hours, rent, inventory turns, financing and cash distributions.

• Request the store-by-store substantiation behind the 40-store 2024 P&L table and ask why 23 eligible stores did not submit valid statements.
• Ask how many reporting stores were actively owner-operated, manager-run or multi-unit locations, and how owner salary was recorded.
• Compare the target site’s rent, payroll and marketing plan with the disclosed averages rather than applying the 7.3% margin mechanically.
• Interview both current and former U.S. franchisees, including stores near the proposed sales volume and maturity level.
• Reconcile operating profit to actual owner cash: subtract interest, debt principal, capital expenditures, taxes and retained working capital separately.