What is the auditor's responsibility regarding internal controls when auditing Alloy Personal Training, LLC's financial statements?

According to Alloy's 2025 Franchise Disclosure Document, the auditor's responsibility regarding internal controls is to obtain an understanding of internal control relevant to the audit. This understanding is used to design audit procedures that are appropriate for the circumstances. However, the audit is not performed for the purpose of expressing an opinion on the effectiveness of Alloy's internal control, and therefore, no such opinion is expressed.

In simpler terms, the auditor reviews Alloy's internal controls to plan the audit effectively, but they don't provide a separate assessment or guarantee about how well those controls work. This is a standard practice in financial auditing, where the focus is on the accuracy and reliability of the financial statements themselves.

For a prospective Alloy franchisee, this means that the financial statements have been examined by an independent auditor, but the FDD does not offer any assurance about the strength of Alloy's internal systems and processes. If a franchisee is concerned about the internal controls, they may want to ask Alloy for more information or conduct their own due diligence.