Is the auditor expressing an opinion on the effectiveness of Brueggers Bagels' internal control?

According to the 2025 FDD, the auditor's report for Caribou Coffee Company, Inc., which includes Brueggers Bagels under its Bagel Brands business unit, explicitly states that the audit of the consolidated financial statements does not include expressing an opinion on the effectiveness of the company's internal control. Instead, the audit aims to obtain reasonable assurance that the financial statements are free from material misstatement. The auditor's understanding of internal control is used to design appropriate audit procedures, but not to provide assurance on the internal control's effectiveness.

This disclaimer means that while the auditor assesses internal controls to plan the audit, potential franchisees should not rely on the audit report as an endorsement of Brueggers Bagels' internal control systems. A potential franchisee needs to understand that the audit's focus is solely on the accuracy of the financial statements, not on the strength of the company's internal processes for financial reporting and compliance.

For a prospective Brueggers Bagels franchisee, this highlights the importance of conducting their own due diligence regarding the franchisor's internal controls. This could involve asking detailed questions about financial reporting procedures, compliance programs, and risk management practices during the discovery process. It may also be prudent to consult with a financial advisor or accountant to independently assess the financial health and stability of the franchise system beyond the scope of the standard audit report.