WINMARK CORP Debt Disclosure

7.     Debt:

Line of Credit/Term Loan

The Company has a Line of Credit with CIBC Bank USA (the “Line of Credit”) that provides for a $20.0 million revolving loan facility and a $30.0 million delayed draw term facility.The termination date for revolving loans under the Line of Credit is April 12, 2027, and the final maturity of all delayed draw loans under the Line of Credit is April 12, 2029 (with all payments of principal due on such date).

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As of December 27, 2025, there were no revolving loans outstanding under the Line of Credit, leaving $20.0 million available for additional revolving borrowings. As of December 27, 2025, the Company had delayed draw term loan borrowings totaling $30.0 million under the Line of Credit bearing interest ranging from 4.60% to 4.75%.

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The Line of Credit has been and will continue to be used for general corporate purposes. The Line of Credit is secured by a lien against substantially all of the Company’s assets, contains customary financial conditions and covenants, and requires maintenance of minimum levels of debt service coverage and maximum levels of leverage (all as defined within the Line of Credit). As of December 27, 2025, the Company was in compliance with all of its financial covenants.

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The Line of Credit allows the Company to choose between two interest rate options in connection with its borrowings on revolving loans. The interest rate options are the Base Rate (as defined) and the SOFR Rate (as defined) plus an applicable margin of 0% and 1.75%, respectively. Interest periods for SOFR borrowings can be one month. The Line of Credit also provides for non-utilization fees of 0.25% per annum on the daily average of the unused revolving loan commitment.

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Notes Payable

The Company has a Note Agreement (the ”Note Agreement”) with PGIM, Inc. (formerly Prudential Investment Management, Inc.) (collectively, “Prudential”).

As of December 27, 2025, the Company had aggregate principal outstanding of $30.0 million under the Note Agreement; consisting of the principal outstanding from the $30.0 million Series C notes issued in September 2021.

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The final maturity of the Series C notes is 7 years from the issuance date. For the Series C notes, interest at a rate of 3.18% per annum on the outstanding principal balance is payable quarterly until the principal is paid in full. The Series Series C notes may be prepaid, at the option of the Company, in whole or in part (in a minimum amount of $1.0 million), but prepayments require payment of a Yield Maintenance Amount, as defined in the Note Agreement.

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The Company’s obligations under the Note Agreement are secured by a lien against substantially all of the Company’s assets (as the notes rank pari passu with the Line of Credit), and the Note Agreement contains customary financial conditions and covenants, and requires maintenance of minimum levels of fixed charge coverage and maximum levels of leverage (all as defined within the Note Agreement). As of December 27, 2025, the Company was in compliance with all of its financial covenants.

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In connection with the Note Agreement, the Company incurred debt issuance costs, of which unamortized amounts are presented as a direct deduction from the carrying amount of the related liability.

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The Company had a Private Shelf Agreement (the “Shelf Agreement”) with Prudential that permitted the Company, for a period of three years from April 2022 and subject to customary conditions, to issue up to $100.0 million of privately negotiated senior notes, reduced by the amount of notes already outstanding under the existing Prudential Note Agreement. The Shelf Agreement expired in April of 2025 and was not extended or replaced. No notes were issued under the agreement.

As of December 27, 2025, required payments of the notes payable and term loans for each of the next five years and thereafter are as follows:

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