How does Capriottis Sandwich Shop account for stock-based compensation awards?
Capriottis_Sandwich_Shop Franchise · 2025 FDDAnswer from 2025 FDD Document
As described in Note 6, the Company grants stock options to its employees. The Company's results of operations reflect compensation expense for all stock-based compensation. The Company accounts for stock-based compensation awards granted, modified or settled using the fair value method for recognizing stock-based compensation in which compensation expense is measured at the grant date based on the fair value of the award and is recognized over the requisite service period, which is usually the vesting period, for those stock options that are expected to ultimately vest. Awards under the Company's plan generally vest over a period of five years from date of issue.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 73)
What This Means (2025 FDD)
According to Capriottis Sandwich Shop's 2025 Franchise Disclosure Document, the company grants stock options to its employees. The document states that Capriottis Sandwich Shop's results of operations reflect compensation expenses for all stock-based compensation.
The method used to account for these awards is the fair value method. With this method, the compensation expense is measured at the grant date based on the fair value of the award. This expense is then recognized over the requisite service period, which is typically the vesting period.
The awards under Capriottis Sandwich Shop's plan generally vest over a period of five years from the date of issue. This means that the expense is recognized gradually over the five-year vesting period, assuming the employee remains with the company during that time.