Driven Brands Sued Over Accounting Errors, Internal Control Failures

Lawsuit alleges pervasive financial reporting issues at the auto repair company

Apr. 3, 2026 at 11:03pm by Ben Kaplan

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A high-end, photorealistic studio still-life photograph featuring a shattered chrome piggy bank on a clean, monochromatic background, conceptually representing the financial losses of Driven Brands investors.A shattered chrome piggy bank symbolizes the financial losses suffered by Driven Brands investors following the company's accounting errors and internal control failures.San Francisco Today

A securities class action lawsuit has been filed against Driven Brands Holdings Inc. (NASDAQ: DRVN) and its executives, alleging the company's financial statements for the past two fiscal years can no longer be relied upon due to material accounting errors and internal control failures. 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

The Driven Brands case highlights the importance of accurate financial reporting and strong internal controls, especially for publicly traded companies. The alleged accounting issues and lack of transparency have led to a significant drop in the company's stock price, impacting shareholders. This lawsuit could have broader implications for the auto repair industry and raise questions about oversight and governance.

The details

The lawsuit, filed in the U.S. District Court for the Southern District of New York, alleges that Driven Brands violated federal securities laws. The company disclosed on February 25, 2026 that its financial statements for fiscal years 2023 and 2024, as well as all quarterly reports through September 2025, contained material errors. 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 current financial health. On the news, Driven Brands' stock price plummeted nearly 40% in a single trading session.

  • 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 auto repair company that operates several automotive service brands.

Hagens Berman

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

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What they’re saying

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

— Reed Kathrein, Hagens Berman partner leading the investigation

What’s next

Investors who purchased Driven Brands stock during the class period have until May 8, 2026 to seek to be appointed as lead plaintiff in the lawsuit.

The takeaway

The Driven Brands case highlights the importance of accurate financial reporting and strong internal controls for publicly traded companies. The alleged accounting issues and lack of transparency have led to significant losses for shareholders, raising questions about oversight and governance in the auto repair industry.