Driven Brands Holdings Inc. (DRVN) SEC Filings & Earnings Calls

Execution risk on Take 5 growth and leverage target

“Continuing to invest in Take 5 growth, long-term net leverage target of 2-3x”

Restatement-related costs continue to pressure earnings; expected to be at high end of $35-45M range for FY2026.

“Adjusted EBITDA included $11.8 million of non-recurring, restatement-related costs; expects restatement-related costs to come in at the high end of its $35 million to $45 million range.”

Uncertainty with lower-income consumers and geopolitical conflict (Middle East) may impact demand.

“Company expects fiscal year 2026 Adjusted EBITDA to be at the low end of its outlook range, reflecting continued uncertainty with lower-income consumers and the conflict in the Middle East.”

Restatement and remediation costs

“increased professional fees, primarily due to $12 million of non-recurring fees associated with the Restatement and remediation plan” · word for word

Lower-income consumer softness

“Take 5 same store sales growth of 3.6% moderated from 6.6% in the prior year period, which we believe primarily reflects the effect of inflationary pressures on lower-income consumers.” · word for word

Auto Glass Now margin deterioration

“Auto Glass Now Adjusted EBITDA decreased by $7 million, or 65%, driven primarily by out-of-period adjustments of $4 million related to the under-accrual of vendor invoices in prior periods” · word for word

Financial restatement risk

“On February 23, 2026, the Board of Directors concluded that there were material errors in our previously issued consolidated financial statements for fiscal years 2024 and 2023.” · word for word

Executive compensation clawback risk

“In light of the Restatement, the Company anticipates that certain incentive-based compensation received by covered current or former executive officers will be subject to recovery under its Clawback Policy.” · word for word

Poor pay-for-performance alignment

“The 2023 PSUs paid out at 0% of target, yet the CEO received $5.2M in total compensation.”

Restatement-related costs of $35-45M expected for FY2026, impacting margins.

“Adjusted EBITDA and Adjusted Diluted EPS fiscal year 2026 outlook continue to include approximately $35 million to $45 million of restatement-related, non-recurring costs.”

Nasdaq listing non-compliance due to delayed 10-Q filing, though expected to be resolved.

“Company is not in compliance with Nasdaq Listing Rule 5250(c)(1) due to the delayed filing of its Quarterly Report on Form 10-Q.” · word for word

Material weaknesses in internal controls

“Based on evaluation of the effectiveness of the Company’s disclosure controls and procedures as of March 28, 2026, the CEO and CFO have concluded that the Company’s disclosure controls and procedures were not effective, due to the previously identified material weaknesses in internal control over financial reporting described below, which have not been remed” · word for word

Foreign currency exposure

“The foreign currency transaction loss for the three months ended March 28, 2026 was primarily comprised of transaction losses of $4 million in our foreign operations and a loss on foreign currency hedges of $5 million.” · word for word

Litigation risk

“The Company is subject to various lawsuits, administrative proceedings, audits, and claims.” · word for word

U.S. Car Wash lease guarantee exposure

“The Company guaranteed payment and performance obligations under certain real estate leases related to the U.S. Car Wash business... The average remaining initial lease term is approximately 15.3 years from March 28, 2026, and the current annual rent on these leases is approximately $39 million.” · word for word

Potential delisting if compliance not regained; restatement indicates control issues.

“the Company is not currently in compliance with Nasdaq Listing Rule 5250(c)(1)... the filing of the 1Q2026 10-Q was delayed as a result of the restatement of previously issued financial statements.” · word for word

Restatement of prior-period financials (FY2023, FY2024, interim 2024-2025) due to lease, cash, AR, and other adjustments; may indicate control weaknesses.

“Company restates previously issued financial statements ... adjustments related to leases, cash, accounts payable, expense classification, accounts receivable”

Consumer environment remains dynamic; potential headwind to demand.

“While the consumer environment remains dynamic” · word for word

Franchise brand weakness

“Franchise Brands same store sales -1.1%, system-wide sales -2.0%”

Geographic concentration

“Locations most concentrated in California, Texas, Florida, Illinois, Ohio”

Labor cost pressure

“We have experienced and expect increases in payroll expenses because of federal, state, and provincial mandated increases in the minimum wage” · word for word

Restatement of financial statements for multiple periods indicates significant accounting issues and potential material weaknesses.

“intends to restate previously delivered financial statements for the fiscal years ending on December 30, 2023 and on December 28, 2024 and the first three fiscal quarters of the fiscal year ending on December 27, 2025.” · word for word

Credit agreement amendment with waiver of defaults suggests lender concern and potential covenant breaches.

“entered into an amendment ... that also provides for a limited waiver to their revolving credit facility.”

Delayed financial reporting and material weaknesses increase risk of delisting or debt covenant breach.

“Company expects to deliver 2025 Form 10-K on or before June 10, 2026, after receiving waiver.”

Potential delisting from Nasdaq if compliance plan not accepted or filing not completed by October 12, 2026.

“Nasdaq has discretion to grant up to 180 calendar days from due date, or October 12, 2026, to regain compliance.”

Ongoing internal review of financial statements and material weaknesses in internal control over financial reporting.

“Internal review of financial statements and evaluation of identified material weaknesses is ongoing.”

Re-issuance restatement of financial statements indicates prior reporting issues

“following the occurrence of a re-issuance restatement of the Co-Issuers’ financial statements” · word for word

Potential delay in filing Form 10-K for FY2025

“material delay in the Company’s financial reporting, including the possibility that the Company will not be able to file the Form 10-K by April 26, 2026” · word for word

Material weaknesses in internal control over financial reporting

“In connection with the Restatement, management has identified material weaknesses in the Company’s internal control over financial reporting resulting in the conclusion that our internal control over financial reporting and disclosure controls and procedures were not effective as of December 27, 2025.” · word for word

Potential further errors may be identified

“The Company’s review of the financial statements and evaluation of its internal controls over financial reporting is ongoing and the Company may identify further material errors.” · word for word

Earnings delay linked to Item 4.02 (non-reliance on financial statements) indicates possible accounting restatement or material weakness.

“matters discussed in the Current Report filed under Item 4.02 on February 25, 2026” · word for word

Segment restructuring may cause comparability issues; Franchise Brands same-store sales negative.

“Franchise Brands same-store sales growth -1.2% for Q3 YTD FY2025.”

Transaction closed; no material risks disclosed beyond forward-looking statements.

Regulatory approval risk for divestiture; closing expected Q1 2026 but subject to approvals.

“The consummation of the Transaction is subject to specified regulatory approvals” · word for word

Franchise Brands same-store sales decline

“Franchise Brands same store sales (1.2%) for the nine months ended September 27, 2025.”

Debt refinancing risk

“The Company anticipates refinancing the Series 2019-2 Securitization Senior Notes prior to its anticipated repayment date.” · word for word

Consumer environment remains dynamic, with same-store sales growth at low end of original guidance range.

“Company now expects same store sales growth at the low end of its original range of 1% to 3%.” · word for word