Driven Brands Holdings Inc., the parent company of CARSTAR, Fix Auto USA, and Abra, disclosed material accounting errors spanning two full fiscal years and several additional quarters, sending its stock down roughly 30%.
Fourth-quarter and full-year 2025 results, previously scheduled for Feb. 25, have been postponed without a new date set. A law firm has announced an investigation into potential securities claims on behalf of investors.
Audit committee flags errors across multiple accounting areas
In a Form 8-K filed with the Securities and Exchange Commission on Feb. 25, the company said its audit committee concluded on Feb. 23 that previously issued financial statements for fiscal years 2023 and 2024, along with several quarterly periods in 2025, "should not be relied upon and required restatement." The company also disclosed that its internal controls over financial reporting and disclosure controls were not effective as of Dec. 27, 2025.
The errors include problems with how the company recorded leases, affecting right-of-use assets and liabilities on balance sheets. Additional errors include unreconciled differences in cash accounts that resulted in overstated cash balances and revenue, understated selling and administrative expenses, and misclassification of certain supply-related expenses.
Restatement timeline unclear
Driven Brands is working with its independent auditor, PricewaterhouseCoopers LLP, on the restatement and has requested a 15-day extension to file its 2025 annual report. The company warned that additional errors may be identified as the review continues.
Driven Brands owns or franchises more than 5,000 locations across its portfolio of automotive service brands, which also includes Take 5 Oil Change, Meineke Car Care, Maaco, and 1-800-Radiator & AC. The company services approximately 70 million vehicles annually and operates in 13 countries.
