Driven Brands Holdings Inc.

What they do

Driven Brands provides routine maintenance such as oil changes, along with paint, collision, glass and repair services to retail, commercial and insurance customers. The company operates primarily through franchised and company-operated locations, reporting in three segments: Take 5, Franchise Brands and Auto Glass Now. In 2025, the network generated approximately $1.9 billion in net revenue from about $6.1 billion in system-wide sales.

Revenue drivers

• Take 5 — The largest segment by revenue, with $334.8 million in Q2 2026 revenue from 1,421 locations offering stay-in-your-car oil changes and related maintenance to retail and commercial customers.
• Franchise Brands — Generated $69.6 million in Q2 2026 revenue from 2,696 franchised locations across Meineke, Maaco, CARSTAR, ABRA, Fix Auto, 1-800 Radiator, Uniban and ATI, serving maintenance, paint and collision repair demand.
• Auto Glass Now — Contributed $72.9 million in Q2 2026 revenue from 206 locations providing automotive glass repair and replacement services to retail, commercial and insurance customers.
• Corporate and Other — Includes $30.1 million of Q2 2026 revenue and unallocated corporate costs, reported separately from the three operating segments.

Recent performance

For the second quarter ended June 27, 2026, revenue rose 6.8% to $507.4 million, with same store sales up 1.4% and system-wide sales up 5% to $1.6 billion. Net income from continuing operations was $37.3 million, or $0.23 per diluted share, versus $16.4 million, or $0.10 per diluted share, a year earlier. Adjusted EBITDA fell 7% to $107.0 million, including $11.8 million of non-recurring restatement-related costs, while Adjusted Net Income was roughly flat at $48.2 million. Take 5 posted its 24th consecutive quarter of positive same store sales growth at 3.6%, and the company added 192 net new stores over the trailing twelve months.

Strategy

Management is focused on scaling Take 5, generating consistent cash flow, and reducing leverage toward a 3x target, ending Q2 2026 at 3.1x net leverage. The company is executing a remediation plan for material weaknesses in internal control over financial reporting identified in connection with its restatement. It has divested non-core car wash assets, completing the sale of its U.S. Car Wash business in April 2025 and its International Car Wash business on January 27, 2026 for approximately $490 million. Capital allocation priorities include continued unit growth through franchise commitments and improving the cost structure.

Risks

• Restatement and material weaknesses — The company restated fiscal 2023, 2024, and interim 2025 financial statements and disclosed material weaknesses in internal control over financial reporting, with ongoing remediation costs expected through 2026.
• Leverage and interest rates — Long-term debt was $1.66 billion as of June 27, 2026, and management has cited indebtedness as a risk factor, though net leverage improved to 3.1x Adjusted EBITDA.
• Consumer and macroeconomic uncertainty — Management noted continued uncertainty with lower-income consumers and the conflict in the Middle East as factors expected to keep fiscal 2026 Adjusted EBITDA at the low end of its outlook range.
• Franchisee and supplier dependence — The business is affected by the financial results of franchisees and depends on key suppliers, including international suppliers, to deliver timely high-quality products at required quantities and prices.

Outlook

For fiscal year 2026, the company reiterates revenue of $1.95–$2.05 billion, Adjusted EBITDA of $430–$460 million, and Adjusted Diluted EPS of $1.15–$1.25, while expecting Adjusted EBITDA at the low end of the range. It expects same store sales growth of flat to 2%, net store growth of approximately 160 to 190, and free cash flow of $125–$145 million. Restatement-related costs are expected at the high end of the $35–$45 million range. The outlook excludes any potential M&A or divestitures other than the completed International Car Wash sale.