Where can I find more details regarding Remax's equity-based compensation plans in the Consolidated Statements of Income (Loss)?
Remax Franchise · 2025 FDDAnswer from 2025 FDD Document
ion*
The Company recognizes compensation expense associated with equity-based compensation as a component of "Selling, operating and administrative expenses" in the accompanying Consolidated Statements of Income (Loss). All equity-based compensation is required to be measured at fair value on or just prior to the date of grant and is expensed over the requisite service, generally over a three-year period, and forfeitures are accounted for as they occur. The Company recognizes compensation expense on awards on a straight-line basis over the requisite service period for the entire award. See Note 10*, Equity-Based Compensation*, for additional discussion regarding details of the Company's equity-based compensation plans.
Source: Item 1 — Business and Organization (FDD pages 334–464)
What This Means (2025 FDD)
According to Remax's 2025 Franchise Disclosure Document, details regarding the company's equity-based compensation plans can be found in two specific locations within the Consolidated Statements of Income (Loss). First, the document states that Remax recognizes compensation expenses associated with equity-based compensation as a component of "Selling, operating and administrative expenses". This means that when reviewing the income statement, franchisees should look for this line item to understand the impact of equity-based compensation on the company's expenses.
Second, Note 10, titled "Equity-Based Compensation", provides additional discussion and details regarding Remax's equity-based compensation plans. This note would likely include information on the types of equity awards offered, vesting schedules, and other relevant terms. The FDD also mentions that during the second quarter of 2023, Holdings shareholders approved a new Holdings 2023 Omnibus Incentive Plan (the "2023 Incentive Plan"), that became effective immediately upon approval, superseding the prior 2013 Incentive Plan (the "2013 Incentive Plan").
For a prospective Remax franchisee, understanding these compensation plans is crucial as they can impact the financial health and stability of the company. Equity-based compensation is a common practice in many companies, including franchises, as it aligns the interests of employees and executives with those of the company's shareholders. By referring to both the "Selling, operating and administrative expenses" line item and Note 10, franchisees can gain a more comprehensive understanding of how Remax manages and accounts for equity-based compensation.