What exercise price was used in the Black-Scholes-Merton option-pricing model for Caption By Hyatt in 2024?

According to Caption By Hyatt's 2025 Franchise Disclosure Document, the Item 21 discusses the Black-Scholes-Merton option-pricing model. The document states that the fair value of each SAR (Stock Appreciation Right) was estimated on the date of grant using this model. While the document mentions the use of the Black-Scholes-Merton option-pricing model, it does not specifically state the exercise price used in the model.

Without a stated exercise price, it is difficult to assess the potential value and cost of stock options granted to Caption By Hyatt executives or employees. The exercise price is a critical component in determining the value of an option, as it represents the price at which the option holder can purchase the underlying stock. A higher exercise price generally makes the option less valuable, while a lower exercise price makes it more valuable.

A prospective Caption By Hyatt franchisee should ask the franchisor for more details about the specific inputs and assumptions used in the Black-Scholes-Merton option-pricing model, including the exercise price, when evaluating the financial statements. Understanding these details can provide a clearer picture of the company's financial position and the potential value of its equity-based compensation.

In summary, while the 2025 FDD mentions the use of the Black-Scholes-Merton model for valuing SARs, it omits the specific exercise price used in the calculation. This information gap makes it difficult to fully understand the financial implications of these stock-based awards. A potential franchisee should seek clarification from Caption By Hyatt regarding the exercise price and other key assumptions used in the model.