Can Alloy require that the annual financial statements be reviewed by a certified public accountant?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
You must furnish to us, at least 60 days prior to the earlier of (i) the date set forth in the Development Schedule by which you must execute a Franchise Agreement or (ii) the actual date on which the Franchise Agreement would be executed, a franchise application for the proposed Facility, financial statements and other information regarding you, the operation of any of your other Facilities within the Development Territory and the development and operation of the proposed Facility (including, without limitation, investment and financing plans for the proposed Facility) as we may reasonably require.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
Based on the 2025 FDD, it is not explicitly stated whether Alloy requires franchisees to have their annual financial statements reviewed by a certified public accountant (CPA). However, the FDD does state that prospective franchisees must furnish Alloy with financial statements as part of their franchise application.
Item 23 includes an Independent Auditor's Report on Alloy Personal Training, LLC's financial statements, indicating that Alloy itself undergoes an audit by an independent auditor. This suggests the importance of accurate and reliable financial reporting within the Alloy franchise system.
While the FDD does not directly address the requirement for franchisee-level CPA reviews, prospective franchisees should clarify with Alloy during their due diligence whether they must submit reviewed or audited financial statements, and if so, the specific requirements and standards that Alloy mandates. This will help in understanding the full scope of financial obligations and reporting expectations.