What expected volatility was used in the Black-Scholes model for the Noodles & Company ESPP in 2024?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
ates in-line with the Company's fiscal quarters. A total of 750,000 shares of common stock are available for issuance under the ESPP. The Company has issued a total of 489,989 shares under this plan, of which 151,403 shares were issued during 2024. A total of 260,011 shares remain available for future issuance. For 2024, in accordance with the guidance for accounting for stock compensation, the Company estimated the fair value of the stock purchase plan using the Black-Scholes multiple-option pricing model. The average a
Source: Item 22 — CONTRACTS (FDD pages 98–99)
What This Means (2025 FDD)
According to Noodles & Company's 2025 Franchise Disclosure Document, the company adopted an Employee Stock Purchase Plan (ESPP) in 2013, allowing eligible team members to contribute up to 15% of their salaries to purchase common stock, subject to certain limitations. For 2024, Noodles & Company used the Black-Scholes multiple-option pricing model to estimate the fair value of the stock purchase plan.
The assumptions used in this model included several factors. The risk-free interest rate was 4.41%, and the expected life of the options was 0.25 years. The expected volatility was 77.4%, and the dividend yield was zero percent. Based on these assumptions, the weighted average fair value per share at the grant date was $0.26.
In 2024, Noodles & Company recognized $43,000 of compensation expense related to the ESPP. This information is relevant for prospective franchisees as it provides insight into how Noodles & Company manages employee compensation and benefits, which can affect the overall financial health and stability of the company.