Is the audit of Gold Star intended to express an opinion on the effectiveness of internal controls?

According to Gold Star's 2025 Franchise Disclosure Document, the audit performed is not intended to express an opinion on the effectiveness of the company's internal controls. While the auditors gain an understanding of internal controls relevant to the audit to design appropriate procedures, the purpose is not to provide an opinion on the overall effectiveness of Gold Star Chili, Inc., its subsidiary TCWW, LLC, and its consolidated entity, GSC Properties, LLC's internal control. Therefore, the auditor's report will not include any such opinion.

This means that while the auditors review Gold Star's internal controls to ensure the financial statements are accurate, they do not provide a separate assessment or guarantee that these controls are effective in preventing errors or fraud. The focus of the audit is on the fair presentation of the financial statements themselves.

For a prospective franchisee, this highlights the importance of conducting their own due diligence regarding Gold Star's financial health and internal processes. While the financial statements are audited, the absence of an opinion on internal controls means a franchisee should not assume the company's internal systems are flawless. Understanding the scope and limitations of the audit is crucial for making informed investment decisions.