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Hagens Berman Issues Update on Driven Brands Holdings Inc.

Hagens Berman Sobol Shapiro LLP, a renowned global firm dedicated to safeguarding shareholder rights, has recently shared significant news concerning Driven Brands Holdings Inc. (NASDAQ: DRVN). As of April 23, 2026, the law firm informed investors about the company's admission regarding its inability to submit essential financial documents, a situation compounded by an official non-compliance notice from Nasdaq. This disclosure comes amidst ongoing legal actions, including a class action lawsuit focusing on alleged violations of federal securities laws.

Details Surrounding Nasdaq's Notice of Non-Compliance

On April 15, 2026, Driven Brands received a deficiency notice from Nasdaq due to its failure to timely file crucial reports, including the Annual Report for the fiscal year 2025 and the Quarterly Report for Q1 2026. The company had previously acknowledged material weaknesses in its financial reporting, which were first identified in February, but it now claims that its entire internal review process is still in progress. As a result, previous financial statements have been deemed unreliable by the company itself.

Furthermore, Driven Brands disclosed preliminary unaudited results indicating a downward revision from its prior guidance. Initially, it expected to comply with Nasdaq's filing deadlines. However, with this recent development, Driven Brands has revised its estimated date for filing its Annual Report to June 15, 2026, which marks the cutoff for submitting a plan to regain compliance with Nasdaq regulations.

Background of the Securities Class Action

The class action lawsuit against Driven Brands has expanded the class period to include transactions from May 3, 2023, to February 24, 2026. The deadline for investors to file as lead plaintiffs in this case is May 8, 2026. Investors who may have incurred substantial losses during this period are urged to submit their claims promptly to facilitate the ongoing investigation led by Hagens Berman.

The lawsuit accuses the company and its executives of misrepresenting the sufficiency of internal controls over financial reporting while simultaneously concealing significant financial errors. These issues include unreconciled cash balances and errors regarding lease accounting.

The gravity of the situation became more apparent on February 25, 2026, when Driven Brands acknowledged that its previously reported financial data was materially misstated. This revelation not only triggered a commitment to restate the inaccurate financial statements but also highlighted various accounting shortcomings, including incorrect lease adjustments and misclassified expenses.

In a follow-up statement on February 26, 2026, Driven Brands announced its inability to file the annual report by the previously stated deadline due to pending restatements, while also confirming that its internal control mechanisms were inadequate, resulting in material weaknesses.

Implications of Ongoing Issues

Reed Kathrein, a partner at Hagens Berman leading the investigation, commented on the situation, indicating that the company's failure to file its 10-K and the looming threat of potential delisting raises concerns regarding the extent of the alleged internal control failures. Investors who have faced significant losses or who possess additional information pertinent to the investigation are urged to act quickly to ensure they are accounted for.

Options for Whistleblowers

Individuals with non-public information related to Driven Brands are encouraged to explore their options to assist in the investigation or to utilize the SEC Whistleblower Program. Under this initiative, whistleblowers providing original information may receive rewards of up to 30 percent of any successful recovery by the SEC.

About Hagens Berman

Hagens Berman Sobol Shapiro LLP is a distinguished plaintiffs' rights firm known for its focus on complex litigation and corporate accountability. With a track record of obtaining over $2.9 billion in settlements for investors and consumers harmed by corporate malpractice, the firm engages in a variety of legal actions addressing issues of corporate negligence and wrongdoing. For further queries and updates, interested parties are encouraged to visit the official Hagens Berman website or follow the firm on social media for timely news releases.