Class Action Lawsuit Alleges Securities Fraud by Driven Brands
Securities law firm Bleichmar Fonti & Auld LLP has filed a class action lawsuit against Driven Brands Holdings Inc. and certain senior executives for alleged securities fraud claims, according to the overview from BFA.
The company's stock dropped 39.8% after it disclosed widespread accounting errors and internal control failures from fiscal years 2023 to 2025 in its Form 8-K filing to the Securities and Exchange Commision on Feb. 25. BFA says the errors included lease accounting issues, unreconciled cash balances, improperly classified expenses, and improperly recognized revenue.
Driven Brands has initiated an ongoing review with its independent auditors, PricewaterhouseCoopers LLP, which it acknowledges may uncover further errors. The company emphasizes that the errors and weaknesses impact the accuracy of its financial disclosures and internal controls, and it is taking remedial actions.
Driven Brands filed an additional Form 8-K March 11 amending its debt indenture, which extends deadlines for financial reporting following a restatement of its financial statements.
According to Yahoo Finance, stock dropped from a close of $16.61 on February 24 to open $9.99 on February 25.
The company also delayed the filing of its 2025 Form 10-K, which in its March 11 filing it said it expects to fulfill by April 26. BFA Law says it’s investigating for possible violations of the federal securities laws following the stock drop and the damage it caused investors.
The case is pending in the U.S. District Court for the Southern District of New York. It is captioned Clark v. Driven Brands Holdings Inc., et al., 1:26-cv-01902. The Lead Plaintiff deadline is May 8.
Anyone who invested in Driven Brands can obtain additional information on the BFA Law website here. Multiple law firms are investigating the allegation
About the Author
Peter Spotts
Associate Editor, Fender Bender
Jay Sicht
Editor-in-Chief, FenderBender, ABRN, Motor Age, and Aftermarket Business World
Jay Sicht is editor-in-chief of FenderBender and ABRN. He has worked in the automotive aftermarket for more than 27 years, including in a number of sales and technical roles in paint/parts distribution and service/repair. He has a bachelor's degree in journalism from the University of Central Missouri with a minor in aviation, and as a writer and editor, he has covered all segments of the automotive aftermarket for more than 20 of those years, including formerly serving as editor-in-chief of Motor Age and Aftermarket Business World. Connect with him on LinkedIn.