Stock prices for Driven Brands Holdings Inc. (DBHI) dropped substantially Feb. 25 after the company reported to the Securities and Exchange Commission (SEC) that investors should not rely on certain previously issued financial statements. DBHI also postponed the publication of its fourth-quarter 2025 financial results and canceled that morning’s investor call.
Driven Brands Holdings Inc. owns and operates Take 5 Oil Change, Meineke, Maaco, CARSTAR, 1-800-Radiator & A/C, Fix Auto USA, ABRA Auto Body Repair of America and Auto Glass Now, among others. It is unknown if the material errors stem from one company or more than one holding.
According to the company’s SEC filing, the audit committee of its board of directors “concluded there were material errors in [the company’s] previously issued consolidated financial statements” for the 2023 and 2024 fiscal years as well as the quarterly and year-to-date statements for the periods that ended Sept. 27, 2025, June 28, 2025 and March 29, 2025.
“[The audit committee] concluded that such financial statements should not be relied upon and required restatement,” the filing says. “Additionally, the ‘Report of our Independent Registered Public Accounting Firm’ on the financial statements and internal control over financial reporting should not be relied upon,” the company said.
The report to the SEC lists the “primary categories of errors” the audit committee identified while preparing the 2025 financial year annual report. They include:
- Lease adjustments. “These errors primarily impact right-of-use assets and right-of-use liabilities recorded in the consolidated balance sheet as of Dec. 28, 2024 and Sept. 27, 2025.”
- Cash adjustments. “[These errors] result in overstatements of cash and revenue and understatement of selling, general and administrative expense in the consolidated statement of operations for fiscal years 2023 and 2024.”
- Expense classification. DBHI presented “certain supply and other expenses [in the 2023 and 2024 financial years] as company-operated store expenses,” meaning that it overstated company-operated store expenses and understated supply and other expenses for fiscal years 2023 and 2024. The SEC filing says, “This error did not result in any change in total operating expenses.”
- Other errors. These include errors relating to income tax provision, supply and other revenue, fixed assets, cloud computing, lease cash application and balance sheet and income statement misclassifications for the 2023 and 2024 financial years. It also includes “inappropriately recognized revenue” for certain brands in the 2025 financial year.
The SEC filing says DBHI’s management has identified “material weaknesses in the company’s internal control over financial reporting,” meaning that its “internal control over financial reporting and disclosure controls and procedures” was not effective as of Dec. 27.
DBHI’s SEC filing says the financial reports will be restated.
“Additional details regarding the material weaknesses will be reflected in the Annual Report on Form 10-K for the fiscal year 2025,” the document says. “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.”
DBHI filed a Form 12b-25 with the SEC late on Feb. 25, requesting a 15-day extension to file its 2025 fiscal year financial report.
“The Company continues to dedicate significant resources to the Form 10-K and is working diligently to file the Form 10-K as soon as practicable,” the document says.
“[DBHI] management continues to evaluate the Company’s financial statements for any further errors that may not yet have been identified, and as a result, management is not currently able to provide a reliable estimate of the impact on its prior period financial statements,” it adds.
Multiple law firms, including Halper Sadeh LLC, the Law Offices of Howard G. Smith and Holzer & Holzer LLC, announced they’re “investigating” the situation on behalf of DBHI investors.
At press time, DBHI had not responded to glassBYTEs/AGRR’s request for comment.
