#United States #San Francisco #Driven Brands #DRVN #Accounting Scandal

Driven Brands Suffers Major Market Cap Decline Amid Accounting Issues

On February 25, 2026, Driven Brands Holdings Inc. (NASDAQ: DRVN) suffered a staggering 30% decline in its stock price, translating to over $800 million in lost market capitalization. This drop followed alarming revelations in the company's recent SEC filings, which confessed to improper accounting practices extending back to the fiscal year 2023.

The unexpected tumble in share prices has prompted Hagens Berman, a national law firm specializing in shareholder rights, to initiate an investigation into Driven Brands. The inquiry aims to determine if the company breached federal securities laws, and the firm has encouraged affected investors to reach out to discuss their rights.

According to the SEC filings, the audit of Driven's financial practices revealed significant discrepancies. The firm had consistently assured investors about the reliability and conformity of its financial statements with established accounting rules. However, this trust was shattered when the company admitted on February 25 that its previously published annual financial reports for the years 2023 and 2024 were no longer valid. Additionally, quarterly financial statements from various periods in 2024 and beyond have also been deemed unreliable.

The company has now pledged to restate its financial disclosures, focusing on rectifying overstatements in revenue and understatements regarding selling, general, and administrative expenses. It also reported “material weaknesses” within its internal controls over financial reporting, leading to doubts about the effectiveness of its disclosure processes as of December 27, 2025. Furthermore, the company announced that these findings resulted in its inability to file timely annual financial reports for the fiscal year ending December 27, 2025.

Reed Kathrein, a partner at Hagens Berman leading the investigation, stated, "Improper revenue recognition and expense understatement are among the worst accounting missteps affecting investors who have relied on the integrity of any company's financial statements. We're investigating whether Driven may have knowingly concealed the issues affecting its financial integrity."

Investors who incurred significant losses or possess information valuable to the investigation are urged to submit their details promptly. In addition, the Hagens Berman firm is especially interested in whistleblowers—individuals with non-public information about Driven who may wish to assist in the ongoing investigation or take part in the SEC Whistleblower program. Under this initiative, whistleblowers providing original information can earn rewards up to 30% of any successful SEC recovery.

About Hagens Berman

Hagens Berman is a prominent plaintiffs' rights law firm recognized for handling complex litigation and advocating for corporate accountability. The firm represents individuals and businesses in various cases and has successfully recovered over $2.9 billion on behalf of investors, workers, and consumers affected by corporate malpractice.

For ongoing updates, you can follow Hagens Berman on social media at @ClassActionLaw, or visit their website at hbsslaw.com.