Driven Brands Faces Securities Class Action Alleging Accounting Errors

Hagens Berman files lawsuit against auto repair company over financial reporting issues spanning 2023-2025

Mar. 16, 2026 at 7:38pm by Ben Kaplan

Got story updates? Submit your updates here. ›

Driven Brands Holdings Inc. (NASDAQ: DRVN) is facing a securities class action lawsuit filed by law firm Hagens Berman. The lawsuit alleges the company made material accounting errors in its financial statements for fiscal years 2023 and 2024, as well as all quarterly reports through September 2025. Driven Brands also admitted to "material weaknesses" in its internal controls over financial reporting, including issues with lease accounting, unreconciled cash accounts, and expense misclassification. As a result, the company was forced to delay its 2025 Form 10-K filing, leaving investors in the dark about its true financial health. The lawsuit seeks to recover losses for all investors who purchased Driven Brands stock during the class period of May 9, 2023 through February 24, 2026.

Why it matters

This case highlights the importance of financial transparency and accurate reporting for publicly traded companies. The alleged accounting errors and internal control failures at Driven Brands raise concerns about the company's governance and oversight, which can have significant implications for investor confidence and the broader market. The lawsuit also underscores the role of shareholder litigation in holding companies accountable for financial misrepresentations.

The details

According to the lawsuit, Driven Brands disclosed on February 25, 2026 that its financial statements for fiscal years 2023 and 2024, as well as all quarterly reports through September 2025, could no longer be relied upon due to material accounting errors. The company also admitted to "material weaknesses" in its internal controls over financial reporting, including issues with lease accounting, unreconciled cash accounts, and misclassification of expenses. As a result, Driven Brands was forced to delay the filing of its 2025 Form 10-K, leaving investors in the dark about the company's true financial health. On the news, Driven Brands' stock price crashed nearly 40% in a single trading session, from a close of $16.61 on February 24, 2026 to an open of $9.99 on February 25, 2026.

  • On February 25, 2026, Driven Brands revealed the material accounting errors and internal control failures.
  • The class period for the lawsuit is May 9, 2023 through February 24, 2026.

The players

Driven Brands Holdings Inc.

A publicly traded automotive repair and maintenance company.

Hagens Berman

A national shareholder rights law firm that filed the securities class action lawsuit against Driven Brands.

Reed Kathrein

The Hagens Berman partner leading the investigation into the claims alleged in the pending lawsuit against Driven Brands.

Got photos? Submit your photos here. ›

What they’re saying

“The Driven Brands case alleges a fundamental failure of corporate oversight and financial transparency.”

— Reed Kathrein, Hagens Berman partner

What’s next

The critical deadline for investors who purchased Driven Brands stock during the class period to join the lawsuit is May 8, 2026.

The takeaway

This case highlights the importance of robust financial controls and accurate reporting for publicly traded companies. The alleged accounting errors and internal control failures at Driven Brands underscore the need for strong corporate governance and oversight to maintain investor confidence in the market.