Is the audit of Alloy intended to express an opinion on the effectiveness of Alloy Personal Training, LLC's internal control?

According to Alloy's 2025 Franchise Disclosure Document, the audit performed on Alloy Personal Training, LLC's financial statements is not intended to express an opinion on the effectiveness of its internal control. The purpose of the audit is to obtain reasonable assurance that the financial statements are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes an opinion on the financial statements.

The auditor's responsibilities include identifying and assessing the risks of material misstatement of the financial statements, examining evidence regarding the amounts and disclosures in the financial statements, and obtaining an understanding of internal control relevant to the audit. However, this understanding of internal control is only for the purpose of designing audit procedures and not for expressing an opinion on the effectiveness of Alloy's internal control.

Therefore, prospective franchisees should understand that the audit provides an opinion on the fairness of the financial statements but does not provide assurance about the effectiveness of Alloy's internal controls. If a franchisee wants to assess the effectiveness of Alloy's internal controls, they would need to conduct a separate assessment specifically for that purpose.