Driven Brands Says Prior Financials Can't Be Trusted, Delays 10-Q
Driven Brands disclosed material errors in financial statements for fiscal 2023 through mid-2026, will restate them, and said it will miss the deadline for its September-quarter 10-Q; shares fell 11%.
What happened
Driven Brands Holdings Inc. (Nasdaq: DRVN), the Charlotte-based parent of automotive service brands including Take 5 Oil Change, Meineke and CARSTAR, disclosed on November 3, 2026 that its Audit Committee concluded there were material errors in previously issued financial statements covering fiscal years 2023, 2024 and 2025, the quarterly periods within those years, and the first two quarters of 2026. The committee concluded those statements should not be relied upon and required a restatement, according to the company's Form 8-K.
The filing says the errors were identified after the company filed its 2025 annual report on Form 10-K on May 19, 2026, principally while preparing audits of fiscal 2025 financial statements of certain subsidiaries that are parties to the company's Whole Business Securitization. The company said its review is ongoing and the error descriptions are preliminary.
The company also said it will not file its Quarterly Report on Form 10-Q for the quarter ended September 26, 2026 by the November 5, 2026 due date, or within the five-day extension available under Rule 12b-25. It intends to file a Notification of Late Filing on Form 12b-25 on or before November 6, 2026.
Driven Brands shares closed at $11.305 on the event date, down 11.12% from the prior close of $12.72, according to the price data.
The errors described
The filing groups the errors identified so far largely into fixed asset categories: failure to timely write off fixed assets, primarily related to sale-leaseback transactions; misclassification of fixed assets within categories; and incorrect useful lives for certain asset categories. The company said these primarily affected property and equipment, depreciation and amortization, impairment charges, lease-related balances and selling, general and administrative expenses, among other line items.
The filing also cites less significant errors affecting fiscal 2025, 2024 and 2023, including the opening fiscal 2023 accumulated deficit for errors originating in earlier periods.
This is the company's second restatement in under a year. The filing notes that on February 23, 2026, the Audit Committee had already concluded that fiscal 2024 and 2023 statements and interim periods within 2024 and 2025 should not be relied upon; those periods were restated in the 2025 10-K.
The company said it has discussed these matters with PricewaterhouseCoopers LLP, its independent registered public accounting firm, and that management is assessing the effect on internal control over financial reporting. It previously disclosed material weaknesses in the 2025 10-K and 2026 quarterly reports.
What this means
A Form 8-K is the 'current report' a US public company must file with the SEC when something material happens between its regular quarterly and annual reports. Item 4.02 is the specific trigger here: it is used when a company concludes that previously issued financial statements, or the auditor's report on them, should no longer be relied upon. It is a formal admission that numbers investors already have in hand are wrong, and it obligates the company to tell the market promptly rather than wait for the next scheduled filing.
A restatement means the company will reissue corrected financial statements. Until that happens, the historical figures in its 2023 through 2025 annual reports and its 2026 quarterly reports should not be used. The filing does not quantify the size of the corrections or state a timeline for completing the restatement.
The late 10-Q matters because public companies must file quarterly reports on a schedule; missing the deadline can carry consequences under Nasdaq listing rules and under the agreements governing the company's securitization and credit facilities, both of which the filing flags as risks. The Whole Business Securitization referred to is a financing structure in which the company pledges the cash flows of its business — in this case largely franchise and royalty payments — to bondholders; the audits of the securitization's subsidiary borrowers are what surfaced the fixed-asset issues.
The filing does not identify a root cause beyond the accounting categories described, and it does not say how large the restatement will be. The company states its review may find further material errors or material weaknesses.
Sources
- 8-K filed 2026-11-03
- Daily price history
Information summarized by AI from the sources listed above. May contain errors — informational only, not investment advice.