Driven Brands Holdings Inc.

Note 2—Summary of Significant Accounting Policies

Fiscal Year

The Company operates and reports financial information on a 52- or 53-week year with the fiscal year ending on the last Saturday in December and fiscal quarters ending on the 13th Saturday of each quarter (or 14th Saturday when applicable with respect to the fourth fiscal quarter). The Company’s fiscal years ending December 27, 2025, December 28, 2024, and December 30, 2023 each consisted of 52 weeks.

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). The adjustments include the accounts of the Company and its wholly-owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation.

On February 24, 2025, the Company entered into a definitive agreement to sell its U.S. Car Wash business to Express Wash Operations, LLC dba Whistle Express Car Wash. On April 10, 2025, the Company completed the sale of the U.S Car Wash business. On November 27, 2025, the Company entered into a definitive agreement to sell its International Car Wash (“ICW”) business to Neptune Acquisition Bidco Limited. On January 27, 2026, the Company completed the sale of the ICW business. The net assets and operations of each disposal group met the criteria to be classified as “discontinued operations” and are reported as such in all periods presented unless otherwise noted.

The consolidated statements of cash flows include cash flows from discontinued operations. Refer to Note 18 for more information regarding discontinued operations.

Restatement of Previously Issued Consolidated Financial Statements

During preparation of the year-end 2025 consolidated financial statements, certain errors were identified in the previously issued consolidated financial statements for fiscal year ended December 28, 2024 (“fiscal year 2024”) and the fiscal year ended December 30, 2023 (“fiscal year 2023”) contained in the Company’s Annual Report on Form 10-K for fiscal year 2024 (the “2024 Form 10-K”), in the previously issued unaudited condensed consolidated financial statements for each of the quarterly and year-to-date periods within fiscal year 2024, and the quarterly and year-to-date periods for the periods ended September 27, 2025, June 28, 2025 and March 29, 2025 contained in the Company’s Quarterly Reports on Form 10-Q. Refer to Note 3 for additional information.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and the related notes to the consolidated financial statements. Significant items that are subject to estimates and assumptions include, but are not limited to, valuation of intangible assets and goodwill, income taxes, allowances for credit losses, valuation of derivatives, self-insurance claims, and share-based compensation. The Company evaluates its estimates on an ongoing basis and may employ outside experts to assist in its evaluations. Changes in such estimates, based on historical experience, current conditions, and various other additional information, may affect amounts reported in future periods. Actual results could differ due to uncertainty inherent in the nature of these estimates.

Cash and Cash Equivalents

Cash equivalents consist of demand deposits and short-term, highly liquid investments with original maturities of three months or less. These investments are carried at cost, which approximates fair value.

Restricted Cash

The Company had total restricted cash of $52 million and $39 million at December 27, 2025 and December 28, 2024, respectively, which primarily consisted of funds from franchisees pursuant to franchise agreements, the usage of which was restricted to advertising activities and letters of credit collateral. Advertising fund cash is presented within advertising fund assets, restricted, on the consolidated balance sheets.

Accounts Receivable

The Company’s accounts receivable consists principally of amounts due related to product sales, centrally billed commercial fleet work, centrally billed insurance claims, advertising and franchise fees, rent due from franchisees, and training services. These receivables are generally due within 30 days of the period in which the corresponding sales occur and are classified as accounts and notes receivable, net on the consolidated balance sheets. Accounts receivable are reported at their estimated net realizable value.

Allowance for Credit Losses

Expected credit losses for uncollectible receivable balances consider both current conditions and reasonable and supportable forecasts of future conditions. Current conditions considered include predefined aging criteria, as well as specified events that indicate the balance due is not collectible. Reasonable and supportable forecasts are used in determining the probability of future collection as well as publicly available macroeconomic data, if relevant, to evaluate whether future credit losses are expected to differ from historical losses.

Inventory

Inventory is stated at the lower of cost or net realizable value. The Company primarily purchases its oil, lubricants, and auto glass in bulk quantities to take advantage of volume discounts and to ensure inventory availability to complete services. Inventories are presented net of volume rebates.

Property and Equipment, Net

Property and equipment are stated at cost less accumulated depreciation. Depreciation is provided using the straight-line method over the estimated useful lives of the respective assets. Leasehold improvements are depreciated over the shorter of the estimated useful life or the remaining lease term of the related asset. Repairs and maintenance are expensed as incurred.

The following table presents the estimated useful lives for each asset category:

Cloud Computing Arrangements

The Company capitalizes qualified cloud computing implementation costs associated with the application development stage and subsequently amortizes these costs over the term of the hosting arrangement and stated renewal period, if it is reasonably certain the Company will renew. Capitalized costs are included in other assets on the consolidated balance sheets. The following table presents a summary of the Company’s cloud computing assets:

During the years ended December 27, 2025, December 28, 2024, and December 30, 2023, the Company recorded cloud computing amortization of $18 million, $10 million (as restated), and $3 million (as restated), respectively.

Leases

The lease standard requires the lessee in an operating lease to record a balance sheet gross-up upon lease commencement by recognizing a right-of-use (“ROU”) asset and lease liability equal to the present value of the lease payments over the expected lease term. The ROU asset and lease liability are derecognized in a manner that effectively yields a straight-line lease expense over the lease term.

Finance lease ROU assets are depreciated on a straight-line basis over the lesser of the useful life of the leased asset or lease term. Finance lease liabilities are recognized using the effective interest method, with interest determined as the amount that results in a constant periodic discount rate on the remaining balance of the liability. Interest associated with finance lease liabilities is recognized in interest expense, net, on the consolidated statements of operations and is included in changes in accrued expenses and other liabilities in the consolidated statements of cash flows.

At contract inception, the Company determines whether the contract is or contains a lease based on the terms and conditions of the contract. Lease contracts are recognized on the Company’s consolidated balance sheet as ROU assets and lease liabilities; however, the Company has elected not to recognize ROU assets and lease liabilities on leases with terms of one year or less. Variable lease payments that are dependent on usage, output, or may vary for other reasons are excluded from lease payments in the measurement of the ROU assets and lease liabilities and are recognized as lease expense in the period the obligation is incurred. For new lease agreements entered into or reassessed, the Company combines lease and non-lease components. The Company’s vehicle and equipment leases are comprised of a single lease component.

If a lease does not provide enough information to determine the implicit interest rate in the agreements, the Company uses its incremental borrowing rate in calculating the lease liability. The Company determines its incremental borrowing rate for each lease by reference to yield rates on collateralized debt issuances, which approximates borrowings on a collateralized basis, by companies of a similar credit rating as the Company, with adjustments for differences in years to maturity and implied company-specific credit spreads.

Certain leases include renewal and termination options, which can be exercised at the Company’s sole discretion. If the Company is reasonably certain that it will exercise the renewal option, the renewal period is included in the lease term. The Company uses this lease term to determine ROU assets and liabilities. The Company remeasures lease payments and reassesses lease classification upon lease modification, if certain conditions are present.

The ROU asset also includes initial direct costs paid less lease incentives received from the lessor. The Company also records lease income for subleases of franchise stores to certain franchisees. Lease income from sublease rentals is recognized on a straight-line basis over the lease term.

Impairment of Long-Lived Assets

Long-lived assets that are used in operations are tested for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable through undiscounted future cash flows. Recognition and measurement of a potential impairment is performed on assets grouped with other assets and liabilities at the lowest level where identifiable cash flows are largely independent of the cash flows of other assets and liabilities. An impairment loss is the amount by which the carrying amount of a long-lived asset or asset group exceeds its estimated fair value.

Goodwill and Indefinite-Lived Intangible Assets

Goodwill is recorded when the aggregate purchase price of an acquisition exceeds the estimated fair value of the net identified tangible and intangible assets acquired. The Company's indefinite-lived intangibles are comprised of trademarks and tradenames. The Company tests goodwill for impairment at the reporting unit level on the first day of the fourth quarter every year or more frequently if events or changes in circumstances indicate the asset might be impaired. If a reporting unit’s carrying amount exceeds its fair value, the Company will record an impairment charge based on that difference.

In performing a quantitative test for impairment of goodwill, the Company primarily uses the income approach method of valuation that includes the discounted cash flow method and the market approach that includes the guideline public company method to determine the fair value of the reporting units and indefinite-lived intangible assets. Significant assumptions used by the Company in estimating fair value under the discounted cash flow model include the discount rates, revenue growth rates, long-term revenue growth rates, EBITDA margins, capital expenditures, and tax rates. Other assumptions include operating and overhead expenses. Assumptions used to determine fair value under the guideline public company method include the selection of guideline companies and the valuation multiples applied.

When performing a quantitative test of the Company’s trade name intangible assets, the Company primarily uses the relief of royalty method under the income approach method of valuation. Significant assumptions used to determine fair value under the relief of royalty method include future trends in sales, a royalty rate, and a discount rate to be applied to the forecast revenue stream.

There is an inherent degree of uncertainty in preparing any forecast of future results. Future trends in system-wide sales are dependent on national, regional, and local economic conditions. Any decreases in customer traffic or average repair order due to these or other reasons could reduce gross sales at franchise locations, resulting in lower royalty and other payments from franchisees, as well as lower sales at company-operated locations. This could reduce the profitability of franchise locations, potentially impacting the ability of franchisees to make royalty payments owed to us when due, which could adversely impact the Company’s current cash flow from franchise operations and company-operated sites.

The determination of an indefinite life is subject to reassessment if changes in facts and circumstances indicate the period of benefit has become finite.

There were no charges recorded during the years ended December 27, 2025, December 28, 2024, and December 30, 2023 relating to goodwill or indefinite-lived intangible assets.

Definite Lived Intangible Assets

The Company's definite lived intangible assets are comprised primarily of trademarks, franchise agreements, license agreements, membership agreements, customer relationships, and developed technology.

Intangible assets with definite lives are being amortized on a straight-line basis over the estimated useful life of each asset as follows:

The lives of definite lived intangibles are reviewed and reduced if changes in their planned use occur. If changes in the asset’s planned use is identified, the Company reviews the useful life and carrying value of the asset to assess the recoverability of the assets if facts and circumstances indicate the carrying value may not be recoverable. The recoverability test requires the Company to compare the undiscounted cash flows expected to be generated by the intangible asset or asset group to the carrying value. If the carrying amounts of the intangible asset is not recoverable on an undiscounted cash flow basis, an impairment charge is recognized to the extent the carrying value exceeds its fair value.

The Company reviews business combinations to identify intangible assets and values the assets based on information and assumptions available to us at the date of purchase utilizing income and market approaches to determine fair value.

Assets Held for Sale

Assets currently available for sale and expected to be sold within one year are classified as assets held for sale on the consolidated balance sheets at the lower of its carrying value or fair value less any costs to sell. Any loss, or gain up until the previously recorded loss, resulting from this measurement is recognized in the period in which the held for sale criteria are met. The estimated fair value of properties are typically based on appraisals and/or offers from prospective buyers. Refer to Note 8 for additional information.

Accrued Liabilities

Included within accrued expenses and other liabilities on the consolidated balance sheets were $33 million and $38 million of accrued payroll, bonus, and benefits at December 27, 2025 and December 28, 2024, respectively. The Company has the following employee benefit plans: a 401(k) plan covering eligible employees as defined by the plan agreement and a non-qualified deferred compensation plan for its executive level employees.

Derivative Instruments

The Company utilizes derivative financial instruments to manage the Company’s interest rate and foreign exchange exposure. For derivative instruments where the Company has not elected hedge accounting, the change in fair value is recognized in earnings. For derivative instruments where the Company has elected hedge accounting, the changes in the derivative and the hedged item attributable to the hedged risks are recognized in the same line within the Company’s consolidated statements of operations. For derivatives designated as cash flow hedges, changes in the fair value of the derivative are initially recorded in accumulated other comprehensive income (loss) and subsequently recorded to the consolidated statements of operations when the hedged item impacts earnings. Derivatives designated to use hedge accounting are assessed at inception and on an ongoing basis whether the instrument is, and will continue to be, highly effective in offsetting cash flow of the hedged item and whether it remains probable the forecasted transaction will occur. Changes in the fair value for derivative instruments that do not qualify for hedge accounting are recognized in the consolidated statements of operations. Refer to Note 12 for additional information regarding the Company’s derivative assets and liabilities.

Revenue Recognition

Franchise royalties and fees

Franchisees are generally required to pay an upfront license fee prior to the opening of a location. The initial license payment received is recognized ratably over the life of the franchise agreement. Franchisees will also pay continuing royalty fees, at least monthly, based on a percentage of the store level retail sales or a flat amount, depending on the brand. The royalty revenue is recognized as the underlying sales occur. In addition to the initial fees and royalties, the Company also recognizes revenue associated with development fees charged to franchisees, which are recognized over the life of the associated franchise agreement. Development fees relate to the right of a franchisee to open additional locations in an agreed upon territory.

Company-operated store sales

Company-operated store sales are recognized, net of sales discounts, upon delivery of services and the service-related product.

The states and municipalities in which the Company operates impose sales tax on all of the Company’s nonexempt revenue. The Company collects the sales tax from its customers and remits the entire amount to the appropriate taxing authority. The Company’s policy is to exclude the tax collected and remitted from net revenue and direct costs. The Company accrues sales tax liabilities as it records sales, maintaining the amount owed to the taxing authorities in accrued expenses and other liabilities on the consolidated balance sheets.

Advertising contributions

Franchisees are generally required to contribute advertising dollars according to the terms of their respective contract (typically based on a percentage of sales) that are used for, among other activities, advertising the brand on a national and local basis, as determined by the brand’s franchisor. Company-operated Take 5 Oil Change Centers contribute to the Take 5 advertising fund on at least the same basis as the majority of franchisees in their respective designated market area. This advertising fee revenue is recognized as the underlying sales occur. Advertising expenses are recorded as incurred. Revenues and expenses related to these advertising collections and expenditures are reported on a gross basis in the consolidated statements of operations. The assets related to the advertising fund are considered restricted and disclosed as such on the Company’s consolidated balance sheets.

Advertising contributions are collected for the purpose of funding advertising and promotional activities and are restricted to such use. Advertising revenues and related advertising expenses are recognized as advertising activities are performed. Amounts collected in excess of advertising expenditures are recorded as a deferred liability, while any shortfall of advertising expenditures over contributions is reflected as a deficit. The Company evaluates the recoverability of advertising fund deficits based on future expected advertising contributions.

Supply and other revenue

Supply and other revenue includes revenue from product sales, vendor incentives, insurance licensing fees, subleases, software maintenance fees, and automotive training services. Revenue from product sales is recognized at the point in time when control of the goods transfers to franchisees or other independent parties, generally upon delivery or sale of the products. Vendor incentive revenue is recognized as the related product sales occur. Insurance licensing fee revenue, where the Company acts as an agent on behalf of its franchisees, is recognized at the point in time when control of the goods transfers to franchisees. This revenue is presented net of related expenses, with any residual amount representing the management fee charged by the Company for the program. Store lease revenue is recognized on a straight-line basis over the lease term. Software maintenance fee revenue is recognized on a straight-line basis over the period services are provided. Automotive training services are provided to third party shop owner/operators in accordance with agreed upon contract terms. These contracts may be for one-time visits or multi-year agreements to receive access to education and training programs. Revenue for one-time visits is recognized at the time the service is performed, while revenue for multi-year contracts is recognized straight-line over the contract term.

Assets recognized from the costs to obtain a contract with a customer

The Company has elected a practical expedient to expense costs as incurred for costs to obtain a contract when the amortization period would have been one year or less. The Company records contract assets, included in deferred commissions on the accompanying consolidated balance sheets, for the incremental costs of obtaining a contract with a customer if the Company expects the benefit of those costs to be longer than one year and if such costs are material. Commission expenses, a primary cost associated with the sale of franchise licenses, are amortized to selling, general, and administrative expenses in the consolidated statements of operations ratably over the life of the associated franchise agreement.

The Company records contract assets for the incremental costs of obtaining a contract with a customer if it expects the benefit of those costs to be longer than one year and if such costs are material.

Capitalized costs to obtain a contract as of December 27, 2025 and December 28, 2024 were $8 million and $7 million, respectively, and are presented within deferred commissions on the consolidated balance sheets.

Contract liability balances

The Company generally records a contract liability when cash is provided for a contract with a customer before the Company has completed its contractual performance obligation. This includes cash payments for initial franchise fees as well as upfront payments on store owner consulting and education contracts. Franchise fees and shop owner consulting contract payments are recognized over the life of the agreement, which generally range from five totwenty andthree tofour year terms, respectively.

Contract liabilities consist primarily of deferred franchise fees and deferred development fees. The Company had contract liabilities of $30 million and $32 million as of December 27, 2025 and December 28, 2024, respectively, which are presented within deferred revenue on the consolidated balance sheets.

Company-operated store expenses consist of payroll and benefit costs for employees at company-operated locations, as well as rent, costs associated with procuring materials from suppliers, and other store-level operating costs. The Company receives volume rebates based on a variety of factors, which are included in accounts receivable on the accompanying consolidated balance sheets and accounted for as a reduction of company-operated store expenses as they are earned. Sales discounts received from suppliers are recorded as a reduction of the cost of inventory. Advanced rebates are included in accrued expenses and other liabilities on the accompanying consolidated balance sheets and are accounted for as a reduction of company-operated store expenses as they are earned over the term of the supply agreement. In addition, the Company includes subleasing expense associated with the subleasing of store buildings to franchisees within supply and other expenses in the consolidated statements of operations.

Share-Based Compensation

The Company recognizes expense related to share-based compensation awards over the service period (generally the vesting period) in the consolidated financial statements based on the estimated fair value of the award on the grant-date. Forfeitures are accounted for as they occur.

Shares Repurchased

The Company records shares repurchased on their trade date and reduce shareholders’ equity and increase accounts payable. Shares repurchased are retired, and the excess of repurchase price over the par value of the shares is charged to retained earnings. Refer to Note 13 for additional information.

Fair Value of Financial Instruments

Financial assets and liabilities are categorized, based on the inputs to the valuation technique, into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to the quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable inputs. Observable market data, when available, is required to be used in making fair value measurements. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement.

The Company classifies and discloses assets and liabilities carried at fair value in one of the following three categories:

Level 1: Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date;

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; or

Level 3: Unobservable inputs for the asset or liability. Unobservable inputs are used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date.

The Company estimates the fair value of financial instruments using available market information and appropriate valuation methodologies. The carrying amount for cash and cash equivalents, restricted cash, accounts receivable, inventory, other current assets, accounts payable, and accrued expenses approximate fair value because of their short maturities. The held to maturity notes receivable carrying values approximate fair value using interest rates that approximate market rates for agreements with similar maturities and credit quality.

The fair value of the Company’s foreign currency derivative instruments is derived from valuation models, which use Level 2 observable inputs such as quoted market prices, interest rates, and forward yield curves. The fair value of long-term debt is estimated based on Level 2 inputs using discounted cash flows and market-based expectations for interest rates, credit risk, and contractual terms of the debt agreements.

Financial assets and liabilities measured at fair value on a recurring basis as of December 27, 2025 and December 28, 2024 are summarized as follows:

The carrying value and estimated fair value of total long-term debt were as follows:

Income Taxes

The Company accounts for income taxes under the liability method whereby deferred tax assets and liabilities are measured using enacted tax laws and rates expected to apply to taxable income in the years in which the assets and liabilities are expected to be recovered or settled. The effects on deferred tax assets and liabilities of subsequent changes in the tax laws and rates are recognized in income during the year the changes are enacted.

In assessing the realizability of deferred tax assets, the Company considers whether it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The Company considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment.

The Company recognizes the tax benefit from an uncertain tax position only if it is more-likely-than-not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized on the consolidated financial statements from such positions are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon settlement with tax authorities. The Company records any interest and penalties associated as additional income tax expense in the consolidated statements of operations.

Deferred Financing Costs

The costs related to the issuance of debt are presented in the accompanying balance sheets as a direct deduction from the carrying amount of that debt or within other assets for deferred financing costs associated with the Revolving Credit Facility and amortized over the terms of the related debt agreements as interest expense using the effective interest method.

Insurance Reserves

The Company is partially self-insured for employee medical coverage. The Company records a liability for the ultimate settlement of claims incurred as of the balance sheet date based upon estimates provided by the third-party that administers the claims on the Company’s behalf. The Company also reviews historical payment trends and knowledge of specific claims in determining the reasonableness of the reserve. Adjustments to the reserve are made when the facts and circumstances of the underlying claims change. If the actual settlements of the medical claims are greater than the estimated amount, additional expense will be recognized.

Foreign Currency Translation

The Company translates assets and liabilities of non-U.S. operations into U.S. dollars at rates of exchange in effect at the balance sheet date, and revenues and expenses at the average exchange rates prevailing during the period. Resulting translation adjustments are recorded as a separate component of other comprehensive income (loss). Transactions resulting in foreign exchange gains and losses are included in the consolidated statements of operations.

Recently Issued Accounting Standards

In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09, Improvements to Income Tax Disclosures. This ASU improves the transparency of income tax disclosures, including consistent categories and greater disaggregation of information in the tax rate reconciliation as well as disaggregation of income taxes paid by jurisdiction. The Company has adopted this standard for the Company’s fiscal year 2025 and has applied this standard prospectively in the financial statements. See Note 16 for additional information.

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expensesand in January 2025, the FASB subsequently issued ASU 2025-01, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date, which clarified the effective date of ASU 2024-03. ASU 2024-03 includes amendments that require entities to bifurcate specified expense line items on the income statement into underlying components, including purchases of inventory, employee compensation, depreciation, intangible asset amortization and depletion, as applicable. Qualitative descriptions of the remaining components are required. These enhanced disclosures are required for both interim and annual periods. Selling expenses must also be separately disclosed for both interim and annual periods, along with an annual qualitative description of the composition of selling expenses. ASU 2024-03 will be effective for the annual reporting periods beginning after December 15, 2026 and interim reporting periods within annual reporting periods beginning after December 15, 2027, with the option to early adopt at any time prior to the effective date and should be applied either prospectively to financial statements issued for reporting periods after the effective date or retrospectively to any or all prior periods presented in the financial statements. The Company is evaluating the impact of this guidance on its consolidated financial statements and related disclosures.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments-Credit Losses (Topic 326). This ASU provides a practical expedient permitting entities to assume current conditions (as of the last balance sheet date) remain unchanged over the remaining life of current accounts receivable and current contract assets. The new standard is effective for annual periods beginning after December 15, 2025, with early adoption permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. The Company is evaluating the impact of this guidance on its consolidated financial statements and related disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40). The amendments in this update improve the operability of the guidance by removing all references to software development project stages so that the guidance is neutral to different software development methods. This update is effective for annual periods beginning after December 15, 2027, including interim periods within those fiscal years, though early adoption is permitted. The Company is evaluating the impact of this guidance on its consolidated financial statements and related disclosures.

Note 3—Restatement of Previously Issued Consolidated Financial Statements

During preparation of the year-end 2025 consolidated financial statements, certain errors were identified that affected previously issued financial statements. On February 23, 2026, the Audit Committee of the Board of Directors, after consultation with the Company’s management, concluded the errors were material to the previously issued consolidated financial statements for fiscal year 2024 and fiscal year 2023 contained in the 2024 Form 10-K, and in the previously issued unaudited condensed consolidated financial statements for each of the quarterly and year-to-date periods within fiscal year 2024 as well as the quarterly and year-to-date periods for the periods ended September 27, 2025, June 28, 2025, and March 29, 2025 contained in the Company’s Quarterly Reports on Form 10-Q, and concluded that such financial statements should not be relied upon and required restatement (the “Restatement”).

This Note describes the nature of the Restatement and shows the impact of the Restatement on each financial statement line item and the effects of these errors on the consolidated balance sheets, consolidated statements of operations, consolidated statements of comprehensive income (loss), consolidated statements of shareholders’ equity, and consolidated statements of cash flows for fiscal years 2024 and 2023. In addition, this Note includes the effects of the adjustments to opening retained earnings as of January 1, 2023 of $32 million.

As discussed in Note 18, on February 24, 2025, the Company entered into a definitive agreement to sell its U.S. Car Wash business and on April 10, 2025, the Company completed the sale. The net assets and operations of the U.S. Car Wash disposal group met the criteria to be classified as “discontinued operations” in the first quarter of 2025. As further discussed in Note 18, on November 27, 2025, the Company entered into a definitive agreement to sell its ICW business and on January 27, 2026, the Company completed the sale of the ICW business. The net assets and operations of the ICW disposal group met the criteria to be classified as discontinued operations beginning in the fourth quarter of 2025. As the ICW and U.S. Car Wash businesses were not previously presented as discontinued operations in the Company’s consolidated financial statements for fiscal years 2024 and 2023, the effects of the prior period errors and the recast of the ICW and U.S. Car Wash businesses as discontinued operations on the consolidated financial statements are reflected below. The Company has presented below a reconciliation from the previously reported to the restated amounts and further presented a reconciliation from the restated amounts to the restated and recast consolidated financial statements reflecting discontinued operations.

Description of Restatement Matters and Restatement Errors

An overview of the restatement adjustments and their impact on previously reported consolidated financial statements are described below.

Lease adjustments

The Company identified certain leases that originated in prior periods beginning in 2023 where the lease had not been recorded at the time of lease commencement. The impact of the errors to the consolidated statements of operations for fiscal years 2024 and 2023 is increases of $2 million and $1 million, respectively, to company-operated store expense. The impact of the errors to the consolidated balance sheet as of December 28, 2024 is an increase of $40 million to operating lease right-of-use assets, an increase of $2 million to accrued expenses and other liabilities and an increase of $40 million to operating lease liabilities.

Cash adjustments

The Company identified unreconciled and aged differences between the general ledger cash balance and bank statements in prior years resulting in overstatement of cash and revenue and understatement of selling, general, and administrative expense, primarily impacting accumulated deficit in periods prior to fiscal year 2023. The impact of the errors relating to cash adjustments to the consolidated statement of operations for fiscal year 2024 is an increase to selling, general, and administrative expenses of $4 million. The impact of the errors to the consolidated statement of operations for fiscal year 2023 is a decrease to company-operated store sales of $6 million and a $1 million increase to selling, general, and administrative expenses. The impact of the errors to the consolidated balance sheet as of December 28, 2024 is a decrease to cash and cash equivalents of $28 million. The errors further affect the opening and closing cash balances and operating cash flows in the consolidated statements of cash flows for fiscal years 2024 and 2023. The impact of the errors to the opening cash balances in the consolidated statements of cash flows for fiscal years 2024 and 2023 is a decrease of $21 million and $14 million, respectively. The impact of the errors to the closing cash balances in the consolidated statements of cash flows for fiscal years 2024 and 2023 is a decrease of $28 million and $21 million, respectively.

Accounts payable adjustments

The Company identified unreconciled and aged differences between the general ledger accounts payable balance and related subledger systems in prior years as a result of incorrect recording, offsetting, and consolidation of intercompany transactions, resulting in understatements in accounts payable and understatements of company-operated store expenses depending on the nature of the reconciling items. The impact of the errors to the consolidated statement of operations for fiscal year 2024 is a $2 million increase to selling, general, and administrative expenses and a $2 million decrease to company-operated store expenses. The impact of the errors to the consolidated statement of operations for fiscal year 2023 is a less than $1 million increase to selling, general, and administrative expenses, and a $32 million increase to company-operated store expenses. The impact of the errors to the consolidated balance sheet as of December 28, 2024 is an increase to accounts payable of $7 million.

Expense classification adjustments

During fiscal years 2024 and 2023, certain supply and other expenses were reflected within company-operated store expenses. This error resulted in company-operated store expenses being overstated by $35 million and $27 million for fiscal years 2024 and 2023, respectively, and a corresponding understatement of supply and other expenses in those periods.

Accounts receivable adjustments

The Company identified unreconciled and aged receivables, misapplied cash and clearing entries, allowance calculations that required correction, and certain accounts receivable not recorded in the subledger, primarily impacting accumulated deficit in periods prior to fiscal year 2023. The impact of the errors to the consolidated statement of operations for fiscal year 2024 is a $2 million decrease to company-operated store sales, a $2 million decrease to supply and other revenue, and a $1 million increase to selling, general, and administrative expenses, as well as other immaterial impacts. The impact of the errors to the consolidated statement of operations for fiscal year 2023 is a less than $1 million increase to company-operated stores sales, a $3 million decrease to supply and other revenue, and a $9 million increase to selling, general, and administrative expenses, as well as other immaterial impacts. These issues resulted in an overstatement of accounts receivable of $26 million as of December 28, 2024.

Other adjustments

The Company has calculated the tax impact of the errors and has also identified other immaterial errors, which have been reflected in the tables below.

The following tables present the restatement adjustments to previously issued consolidated financial statements, including the previously reported consolidated balance sheet as of December 28, 2024, and the consolidated statements of operations, consolidated statements of comprehensive income (loss), consolidated statements of equity, and consolidated statements of cash flows for fiscal years 2024 and 2023.

Note 4—Acquisitions and Divestitures

The Company strategically acquires companies and assets to increase its footprint and offer products and services that diversify its existing offerings, primarily through asset purchase agreements. These acquisitions are accounted for as business combinations using the acquisition method, whereby the purchase price is allocated to the assets acquired and liabilities assumed, based on their fair values as of the date of the acquisition with the remaining amount recorded in goodwill.

2025 Acquisitions

The Company completed seven acquisitions within the Take 5 segment during the year ended December 27, 2025, representing eight sites, for an aggregate cash consideration, net of cash acquired and liabilities assumed, of $12 million.

2024 Acquisitions

The Company completedone acquisition within the Take 5 segment during the year ended December 28, 2024, representingtwo sites for an aggregate cash consideration, net of cash acquired and liabilities assumed, of less than $1 million.

2023 Acquisitions

The Company completedsix acquisitions within the Take 5 segment during the year ended December 30, 2023, representing six sites. The aggregate cash consideration for these acquisitions, net of cash acquired and liabilities assumed, was approximately $9 million.

The Company completedtwo acquisitions in the Auto Glass Now segment during the year ended December 30, 2023, representingtwo sites. The aggregate cash consideration for these acquisitions, net of cash acquired and liabilities assumed, was approximately $6 million.

The Company estimated the fair value of acquired assets and liabilities as of the date of acquisition based on information currently available. As the Company finalizes the fair value of assets acquired and liabilities assumed, additional purchase price adjustments may be recorded during the measurement period for the 2025 acquisitions. Purchase accounting allocations are complete for all 2023 and 2024 acquisitions.

Goodwill represents the excess of the consideration paid over the fair value of net assets acquired and includes the expected benefit of synergies within the existing segments and intangible assets that do not qualify for separate recognition. Goodwill, which was allocated to the Take 5 and Auto Glass Now segments, is substantially all deductible for income tax purposes.

Deferred Consideration and Transaction Costs

Deferred consideration is typically paid six months toone-year after the acquisition closing date once all conditions under the purchase agreement have been satisfied. The Company had less than $1 million and $2 million of deferred consideration related to acquisitions as of December 27, 2025 and December 28, 2024, respectively. The Company paid less than $1 million, $1 million, and $25 million of deferred consideration related to prior acquisitions during the years ending December 27, 2025, December 28, 2024, and December 30, 2023 respectively. Deferred consideration is recorded within investing activities at the time of payment.

The Company incurred less than $1 million of transaction costs relating to the acquisitions above during the years ended December 27, 2025, December 28, 2024, and December 30, 2023, respectively.

2025 Divestitures

For information relating to the divestiture of the U.S. Car Wash business, refer to Note 18.

2024 Divestitures

During the third quarter 2024, the Company completed the sale of its Canadian distribution business, primarily operated under the PH Vitres D’Auto brand, within the Corporate segment at a purchase price of approximately $78 million. The sale included essentially all assets and liabilities associated with the business as well as allocated goodwill of $13 million resulting in a loss of $2 million on the sale of business within selling, general, and administrative expenses on the consolidated statements of operations during the year ended December 28, 2024. Approximately $47 million of the sale proceeds were utilized to repay a portion of outstanding secured senior notes with the remainder primarily utilized to repay a portion of the previously outstanding Term Loan Facility.

During the year ended December 28, 2024, the Company sold nine company-operated stores within the Franchise Brands segment to a franchisee at a sale price of $18 million. The Company sold certain store assets as well as allocated $9 million of Franchise Brands goodwill based on the fair value of the segment at the time of sale, resulting in a gain of $5 million on the sale of businesses within selling, general, and administrative expenses on the consolidated statements of operations.

Note 5—Accounts and Notes Receivable, Net

The balance on the consolidated balance sheets are amounts primarily related to customers, vendors, and franchisees. As of December 27, 2025 and December 28, 2024, the gross amount of current accounts and notes receivable including advertising fund receivables was $170 million and $183 million (as restated), respectively. The current allowance for credit losses for these periods was $31 million and $28 million (as restated), respectively. The gross amount of non-current notes receivable was $2 million and $3 million as of December 27, 2025 and December 28, 2024, respectively. The non-current allowance for credit losses for these periods was less than $1 million as of December 27, 2025 and December 28, 2024.

The changes in the allowance for accounts and notes receivable for the years ended December 27, 2025 and December 28, 2024 were as follows:

Note 6—Property and Equipment, Net

Property and equipment, net at December 27, 2025 and December 28, 2024 consisted of the following:

Depreciation expense was $63 million, $56 million (as restated), and $51 million (as restated) for the years ended December 27, 2025, December 28, 2024, and December 30, 2023, respectively.

Note 7—Goodwill and Intangible Assets

As disclosed in Note 10, the Company’s reportable segments changed during the year ended December 27, 2025 as a result of changes within the operating segments and reporting units. The Company performed quantitative impairment assessments of goodwill immediately prior to the change in reporting units and immediately after the change on its new reporting units. The Company used the relative fair value method to reallocate the goodwill to the associated reporting units impacted by the change in reporting units in the first quarter of 2025. No impairment charges were recorded during the years ended December 27, 2025, December 28, 2024, and December 30, 2023.

Changes in the carrying amount of goodwill for the years ended December 27, 2025 and December 28, 2024 are as follows:

Intangible assets for the years ended December 27, 2025 and December 28, 2024 are as follows:

The weighted average amortization period for franchise agreements, license agreements, membership agreements, customer relationships, developed technology, and trademarks and other are 27 years,13 years,8 years,13 years,8 years, and 5 years, respectively.

Amortization expense was$19 million, $23 million, and $25 million for the years ended December 27, 2025, December 28, 2024, and December 30, 2023, respectively.

Amortization expense related to definite lived intangible assets for the next five years and thereafter are as follows:

Note 8—Assets Held For Sale and Impairments

Assets Held For Sale

The changes in assets held for sale for the years ended December 27, 2025 and December 28, 2024 were as follows:

During the years ended December 27, 2025 and December 28, 2024, the Company continued to enhance properties included within held for sale resulting in additions to assets held for sale. The Company evaluated the fair value for all assets included within assets held for sale, which resulted in losses of $9 million, $41 million, and $15 million during the years ended December 27, 2025, December 28, 2024, and December 30, 2023, respectively, which is recorded within asset impairment charges and lease terminations on the consolidated statements of operations. In addition, the Company recorded a net loss within selling, general, and administrative expenses of $2 million related to the sale of 13 locations during the year ended December 27, 2025. The Company recorded a net gain of $5 million within selling, general, and administrative expenses from the sale of 71 locations during the year ended December 28, 2024. There were no sales during the year ended December 30, 2023. The Company will continue to evaluate the fair value of assets held for sale, which may result in additional net losses upon sale based on unfavorable market conditions or other economic factors in the future.

As of December 27, 2025,17 locations were determined to no longer meet the requirements to be classified as held for sale. As a result, the Company transferred $20 million relating to these locations back into held and used at the lower of their carrying value, less any accumulated depreciation that would have occurred.

U.S. Car Wash Impairments

During the year ended December 30, 2023, the Company performed a strategic review of the U.S. Car Wash operations, which included, but was not limited to, an evaluation of the following: store performance, the competitive landscape, revenue and expense optimization opportunities, and capital requirements. As a result of this strategic review, the Company approved the closure of 29 stores, halted the opening of new company-operated stores, and began marketing property and equipment for sale that will not be utilized. These actions resulted in the transfer of assets from property and equipment to assets held for sale. Impairment charges for stores which were not included in the U.S. disposal group were $105 million relating to property and equipment and right-of-use assets during the year ended December 30, 2023.

Note 9—Long-term Debt

The long-term debt obligations consist of the following:

(a)Amount primarily consists of finance lease obligations. See Note 11.

Scheduled debt repayments for the next five fiscal years and thereafter are as follows:

Series 2019-1 Securitization Senior Notes

In March 2019, the Issuer issued $300 million of Series 2019-1 Securitization Senior Notes (the “2019-1 Senior Notes”), which bore a fixed interest rate of 4.641% per annum. The 2019-1 Senior Notes had a final legal maturity date in April 2049 and an anticipated repayment date in April 2026. The 2019-1 Senior Notes have been fully repaid as of October 2025.

Series 2019-2 Securitization Senior Notes

In September 2019, the Issuer issued $275 million Series 2019-2 Securitization Senior Secured Notes (the “2019-2 Senior Notes”), which bore a fixed interest rate of 3.981% per annum. The 2019-2 Senior Notes had a final legal maturity date in October 2049 and an anticipated repayment date in October 2026. The 2019-2 Senior Notes were secured by substantially all assets of the Issuer and were guaranteed by the Securitization Entities. The Company capitalized $6 million of debt issuance costs related to the 2019-2 Senior Notes. The 2019-2 Senior Notes have been fully repaid as of January 2026 primarily from proceeds received through the sale of ICW business.

Series 2020-1 Securitization Senior Notes

In July 2020, Driven Brands Funding, LLC and Driven Brands Canada Funding Corporation (together, the “Co-Issuers”), each wholly owned indirect subsidiaries of the Company, issued $175 million 2020-1 Securitization Senior Notes (the “2020-1 Senior Notes”) bearing a fixed interest rate of 3.786% per annum. The 2020-1 Senior Notes have a final legal maturity date in

July 2050 and an anticipated repayment date in July 2027. The 2020-1 Senior Notes are secured by substantially all assets of the Co-Issuers and are guaranteed by the Canadian Co-Issuer and various subsidiaries of the Canadian Co-Issuer. The Company capitalized $11 million of debt issuance costs related to the 2020-1 Senior Notes. In January 2026, the Company repaid $80 million of the 2020-1 Senior Notes utilizing proceeds from the sale of ICW.

Series 2020-2 Securitization Senior Notes

In December 2020, the Co-Issuers issued $450 million 2020-2 Securitization Senior Notes (the “2020-2 Senior Notes”) bearing a fixed interest rate of 3.237% per annum. The 2020-2 Senior Notes have a final legal maturity date in January 2051 and an anticipated repayment date in January 2028. The 2020-2 Senior Notes are secured by substantially all assets of the Co-Issuers and are guaranteed by the Securitization Entities. The Company capitalized $8 million of debt issuance costs related to the 2020-2 Senior Notes.

Series 2021-1 Securitization Senior Notes

In September 2021, the Co-Issuers issued $450 million of 2021-1 Securitization Senior Notes (the “2021-1 Senior Notes”) bearing a fixed interest rate of 2.791% per annum. The 2021-1 Senior Notes have a final legal maturity date in October 2051 and an anticipated repayment date in October 2028. The 2021-1 Senior Notes are secured by substantially all assets of the Co-issuers and are guaranteed by the Securitization Entities. The Company capitalized $10 million of debt issuance costs related to the 2021-1 Senior Notes.

Series 2022-1 Securitization Senior Notes

In October 2022, the Co-Issuers issued $365 million of 2022-1 Securitization Senior Notes (the “2022-1 Senior Notes”), which bore a fixed interest rate of 7.393% per annum. The 2022-1 Senior Notes had a final legal maturity date in October 2052, and an anticipated repayment date in October 2027. The 2022-1 Senior Notes were fully repaid in October 2025 and the Company realized a $1 million loss on debt extinguishment on the consolidated statements of operations during the year ended December 27, 2025. In conjunction with the issuance of the 2022-1 Senior Notes, the Co-Issuers also issued Series 2022-1 Class A-1 Notes (the “2022 VFN”) in the revolving amount of $135 million, which can be accessed at the Issuer’s option if certain conditions are met. As of December 27, 2025, there were no amounts outstanding under the 2022 VFN.

Series 2024-1 Securitization Senior Notes

In July 2024, the Co-Issuers issued $275 million of 2024-1 Class A-2 Securitization Senior Notes (the “2024-1 Senior Notes”) bearing a fixed interest rate of 6.372% per annum. The 2024-1 Senior Notes have a final legal maturity date in October 2054 and an anticipated repayment date in October 2031. The 2024-1 Senior Notes are secured by substantially all assets of the Co-Issuers and are guaranteed by the Co-Issuers and each of their respective subsidiaries. Proceeds from the 2024-1 Senior Notes were primarily used to repay the Company’s 2018-1 Class A-2 Securitization Senior Notes (the “2018-1 Senior Notes”). The Company incurred costs with third parties related to the issuance of the 2024-1 Senior Notes of $2 million included within interest expense, net on the consolidated statements of operations. The Company capitalized $10 million of debt issuance costs related to the 2024-1 Senior Notes.

Series 2024-1 Variable Funding Securitization Senior Notes

In July 2024, the Co-Issuers issued Series 2024-1 Variable Funding Senior Notes, Class A-1 (the “2024 VFN”) in the revolving amount of $400 million. The 2024 VFN have a final legal maturity date in October 2054. The commitment under the 2024 VFN is set to expire in October 2029, with the option oftwo one-year extensions. The 2024 VFN are secured by substantially all assets of the Co-Issuers and are guaranteed by the Co-Issuers and each of their respective subsidiaries. Borrowings incur interest at the Base Rate plus an applicable margin or SOFR plus an applicable margin. As of December 27, 2025, there wereno amounts outstanding under the 2024 VFN and $22 million of outstanding letters of credit, which reduced the borrowing availability under the 2024 VFN.

Series 2025-1 Securitization Senior Notes

In October 2025, the Co-Issuers issued $500 million of Series 2025-1 Class A-2 Securitization Senior Notes (the “2025-1 Senior Notes”) bearing a fixed interest rate of 5.296% per annum. The 2025-1 Senior Notes have a final legal maturity date in October 2055 and an anticipated repayment date in October 2030. The 2025-1 Senior Notes are secured by substantially all assets of the Co-Issuers and are guaranteed by the Co-Issuers and each of their respective subsidiaries. Proceeds from the 2025-1 Senior Notes were used in combination with the Company’s Revolving Credit Facility to repay the Company’s 2019-1 and 2022-1 Senior Notes. The Company incurred costs with third parties related to the issuance of the 2025-1 Senior Notes of

$2 million included within interest expense, net on the consolidated statements of operations. The Company capitalized $11 million of debt issuance costs related to the 2025-1 Senior Notes.

Credit Agreement

Revolving Credit Facility

In May 2021, Driven Holdings, LLC, (“the Borrower”) a Delaware limited liability company and indirect wholly-owned subsidiary of Driven Brands Holdings Inc., entered into a credit agreement to secure a revolving line of credit with a group of financial institutions (“Revolving Credit Facility”), which provides for an aggregate amount of up to $300 million, and had a maturity date in May 2026 (“Credit Agreement”). In February 2025, the Borrower entered into an amendment extending the Credit Agreement maturity date to February 2030, subject to certain conditions. Borrowings will incur interest at a rate equal to SOFR plus an applicable term adjustment between 2.00% and 2.25%. The Revolving Credit Facility also includes periodic commitment fees based on the available unused balance and a quarterly administrative fee.

As of December 27, 2025, the Company had an outstanding balance of $140 million, $7 million of outstanding letters of credit, and $153 million available under the Revolving Credit Facility. The Company utilized proceeds from the sale of ICW in January 2026 to repay $140 million of the Revolving Credit Facility.

In April 2026, the Company entered into an amendment that also provides for a limited waiver to the Revolving Credit Facility under the Credit Agreement, dated as of May 27, 2021 (as amended, restated, supplemented, or otherwise modified, the “Credit Agreement”) by and among Driven Holdings Parent LLC, Borrower, the lenders party thereto from time to time (the “Lenders”), and JPMorgan Chase Bank, N.A. as administrative agent (the “Administrative Agent”), which (i) waives any defaults or events of default that may exist or have arisen as a result of the Borrower notifying the Administrative Agent and the Lenders that it intends to restate previously delivered financial statements for the fiscal years ending on December 30, 2023 and on December 28, 2024 and the first three fiscal quarters of the fiscal year ending on December 27, 2025, (ii) extends the deadline for the Borrower to deliver its financial statements for the fiscal year ending on December 27, 2025 (the “2025 Borrower Financial Statements”) to 165 days after such fiscal year-end (June 10, 2026), and (iii) extends the deadline for the Borrower to deliver its financial statements for the fiscal quarter ending on March 28, 2026 (the “Q1 2026 Borrower Financial Statements”) to 45 days after the delivery of the 2025 Borrower Financial Statements.

Term Loan Facility

In December 2021, the Borrower amended the Credit Agreement to provide for a new term loan credit facility (the “Term Loan Facility”), which had an initial aggregate commitment of $500 million, with loans and other extensions of credit thereunder maturing in December 2028. The Company made repayments of $354 million during 2025, primarily from proceeds received through the sale of the U.S. Car Wash business, including proceeds from the Seller Note. The Term Loan Facility has been fully repaid as of December 27, 2025 and no future borrowings can be drawn on this facility. The Company realized a $5 million loss on debt extinguishment on the consolidated statements of operations during the year ended December 27, 2025 relating to unamortized debt issuance costs associated with the Term Loan Facility.

Guarantees and Covenants of the Securitization Notes

Substantially all of the assets of the Company, including most of the domestic and certain of the foreign revenue-generating assets, which principally consist of franchise-related agreements, certain company-operated stores, certain product distribution agreements, intellectual property and license agreements for the use of intellectual property, are owned by subsidiaries of the Borrower and the Issuer, and are pledged to secure the Securitization Notes and indebtedness under the Credit Agreement (together the "Indebtedness"). The restrictions placed on the Issuer and its subsidiaries require that interest and principal (if any) on the Securitization Notes be paid prior to any residual distributions to the Company, and amounts are segregated weekly to ensure appropriate funds are reserved to pay the quarterly interest and principal (if any) amounts due. The amount of weekly cash flow that exceeds all expenses and obligations of the Issuer and its subsidiaries (including required reserve amounts) is generally remitted to the Company in the form of a dividend.

The Company’s Indebtedness is subject to certain quantitative covenants related to debt service coverage and leverage ratios. In addition, the agreements related to the Indebtedness also contain various affirmative and negative operating and financial reporting covenants, which are customary for such debt instruments. These covenants, among other things, limit the ability of the Issuer and its subsidiaries to sell assets; engage in mergers, acquisitions, and other business combinations; declare dividends or redeem or repurchase capital stock; incur, assume, or permit to exist additional indebtedness or guarantees; make loans and investments; incur liens; and enter into transactions with affiliates. In the event that certain covenants are not met, the Indebtedness may become fully due and payable on an accelerated schedule. In addition, the Borrower and the Issuer may voluntarily prepay, in part or in full subject to certain pre-payment premiums or make-whole obligations.

As of May 19, 2026, the Co-Issuers were in material compliance with all covenants under the agreements discussed above.

In connection with the issuance of the 2025-1 Senior Notes, the Co-Issuers entered into the Second Amended and Restated Base Indenture (the “Base Indenture”). In March 2026, the Co-Issuers entered into Amendment No. 1 to the Base Indenture (“Amendment No. 1”), dated as of October 20, 2025. Amendment No. 1 amended the Base Indenture to extend the deadlines for certain deliverables and to clarify certain other requirements following the occurrence of a re-issuance restatement of the Co-Issuers’ financial statements. On April 22, 2026, the Co-Issuers received a waiver under the Base Indenture, extending Driven Brands Holdings Inc.’s deadline to deliver Driven Brands Holdings Inc.’s annual financial statements for fiscal year 2025 to June 10, 2026, and the deadline for the quarterly financial statements for the period ended March 28, 2026 to 45 days following the delivery of the annual financial statements for fiscal year 2025.

Driven Brands Holdings Inc. has no material separate cash flows or assets or liabilities as of December 27, 2025. All business operations are conducted through its operating subsidiaries and it has no material independent operations. Driven Brands Holdings Inc. has no other material commitments or guarantees apart from those disclosed in Note 17. As a result of the restrictions described above, certain of the subsidiaries’ net assets are effectively restricted in their ability to be transferred to Driven Brands Holdings Inc. as of December 27, 2025.

Note 10—Segment Information

In the first quarter of 2025, the Company reorganized its operating segments to simplify its reporting structure, align with the Company’s current business model, and increase transparency for investors, which resulted in a change to the Company’s reportable segments. As a result, the Company had the following reportable segments: Take 5, Franchise Brands, and Car Wash. Then, in the fourth quarter of 2025, as a result of the announcement of the sale of ICW and the related results reflected within discontinued operations, the Company re-evaluated its operating segments, which resulted in another change to the reportable segments. As of the fourth quarter of 2025, the Company now has the following reportable segments: Take 5, Franchise Brands, and Auto Glass Now.

The Take 5 segment is primarily composed of Take 5 Oil. Take 5 Oil services a combination of retail and commercial customers, such as fleet operators. Take 5 Oil’s services include oil changes as well as certain as-needed automotive maintenance enhancements, including differential fluid exchanges, coolant services and air and cabin filters. The Take 5 segment also includes supply and other revenue and franchise royalties and fees.

The Franchise Brands segment is primarily composed of the Company’s portfolio of franchise brands, which include: Meineke, Maaco, CARSTAR, ABRA, Fix Auto, 1-800 Radiator, Uniban, and ATI, along with other smaller brands and services for retail, commercial, and insurance customers. The Franchise Brands segment also includes supply and other revenue, and company-operated store sales.

The Auto Glass Now segment provides auto glass repair, replacement, and calibration services to commercial, retail, and insurance customers within the U.S. The Auto Glass Now segment derives substantially all of its revenue from company-operated store sales.

The consolidated financial results include “Corporate and Other” activity. Advertising fund contribution revenue and related costs as well as shared service costs, which are related to finance, information technology, human resources, legal, supply chain, and other support services are recorded within Corporate and Other. Corporate and Other activity includes the adjustments necessary to eliminate certain intercompany transactions, namely supply sales fulfilled by the Take 5 segment to the Franchise Brands segment as well as discrete activity associated with the U.S. Car Wash business that was not classified as discontinued operations.

The Chief Operating Decision Maker (“CODM”) is the Chief Executive Officer. The CODM evaluates segment performance and allocates resources, including capital expenditures and variable compensation, to each segment primarily as part of the annual budget process based on Adjusted EBITDA. The CODM reviews budget-to-actual results to assess performance and adjust resource allocations as necessary.

Adjusted EBITDA is defined as earnings from continuing operations before interest expense, net, income tax expense, and depreciation and amortization, with further amounts related to acquisition related costs, cloud computing amortization, share-based compensation, loss on debt extinguishment, foreign currency transaction related gains or losses, and certain non-recurring, non-core, infrequent or unusual charges. Adjusted EBITDA is a supplemental measure of the operating performance of the Company’s segments and may not be comparable to similar measures reported by other companies. Other segment items primarily include, but are not limited to, payroll and payroll-related costs, costs of inventory and supplies, utilities, and rent expense as well as marketing costs associated with non-franchised businesses within the reportable segments. No asset information has been provided for these reportable segments as the Chief Operating Decision Maker does not regularly review asset information by reportable segment.

Certain information within the tables below has been revised to conform to current year presentation to reflect financial results for continuing operations and segment changes.

Segment results for the years ended December 27, 2025, December 28, 2024, and December 30, 2023 are as follows:

(a)Consists of acquisition costs as reflected within the consolidated statements of operations, including legal, consulting, and other fees, and expenses incurred in connection with acquisitions completed during the applicable period, as well as inventory rationalization expenses incurred in connection with acquisitions. As acquisitions occur in the future, the Company expects to incur similar costs and, under U.S. GAAP, such costs relating to acquisitions are expensed as incurred and not capitalized.

(b)Consists of discrete items and project costs, including third-party professional costs associated with strategic transformation initiatives as well as non-recurring payroll-related costs and non-ordinary course legal settlements.

(c)Includes non-cash amortization expenses relating to cloud computing arrangements.

(d)Represents non-cash share-based compensation expense.

(e)Represents foreign currency transaction (gains) losses, net that primarily related to the remeasurement of our intercompany loans as well as gains and losses on cross-currency swaps.

(f)Consists of the following items (i) asset impairments, (ii) (gains) losses, net on sale leasebacks, disposal of assets, including assets held for sale, or sale of business; and (iii) loss on fair value of the Seller Note. See Note 18 for additional information regarding the Seller Note.

(g)Represents charges incurred related to the Company’s full repayment of the Term Loan Facility in conjunction with the sale of the U.S. Car Wash business and the issuance of the Series 2025-1 Senior Notes in the current year and charges incurred related to the Company’s partial repayment of Senior Secured Notes in conjunction with the sale of its Canadian distribution business in the prior year.

The following table shows information relating to the geographic regions in which the Company operates:

The following table shows the capital expenditures by reportable segment and Corporate and Other:

Note 11—Leases

The Company’s lease and sublease portfolio primarily consists of the real property leases related to franchisee and company-operated locations, as well as office space and various vehicle and equipment leases. Leases for real property generally have terms ranging from five to 25 years, with most having one or more renewal options ranging fromone to 10 years. The Company does not include option periods in its determination of the lease term unless renewals are deemed reasonably certain to be exercised. Equipment and vehicle leases generally have terms ranging fromone tofive years. The Company’s portfolio of leases does not contain any material residual value guarantees or restrictive covenants.

The following table details the total investment in operating and finance leases where the Company is the lessee:

The lease cost for operating and finance leases recognized in the consolidated statements of operations were as follows:

The Company recorded a $6 million, $1 million, and $63 million impairment loss during the years ended December 27, 2025, December 28, 2024, and December 30, 2023, respectively, related to Company’s decision to exit certain leased locations.

The Company also subleases certain facilities to franchisees and others, which generated $5 million in sublease revenue during each of the years ended December 27, 2025 and December 28, 2024, respectively, and $4 million in sublease revenue during the year ended December 30, 2023, and is included as a component of supply and other revenue on the consolidated statements of operations.

For the year ended December 27, 2025, the Company sold 41 Take 5 properties in various locations throughout the U.S. for a total of $71 million. For the year ended December 28, 2024, the Company sold 34 Take 5 properties in various locations throughout the U.S. for a total of $51 million. For the year ended December 30, 2023, the Company sold 25 Take 5 properties in various locations throughout the U.S. for a total of $39 million. Concurrently with the closing of these sales, the Company entered into various operating lease agreements pursuant to which the Company leased back the properties. These lease agreements have terms typically ranging from 14 to 20 years and provide the Company with the option of extending the lease for up to 20 additional years. The Company does not include option periods in its determination of the lease term unless renewals are deemed reasonably certain to be exercised. The Company recorded an operating lease right-of-use asset and operating lease liability of approximately $55 million and $55 million, respectively, for the year ended December 27, 2025 and $41 million and $41 million, respectively, for the year ended December 28, 2024 related to these lease arrangements. The Company recorded a netloss of $2 million for the year ended December 27, 2025, and net gains of $4 million and $3 million for the years ended December 28, 2024 and December 30, 2023, respectively.

Supplemental cash flow information related to the lease arrangements were as follows:

As of December 27, 2025, future minimum lease payments under noncancellable leases were as follows:

Note 12—Derivatives

The Company utilizes derivative financial instruments primarily to hedge movements in foreign currency exchange rates. All derivative financial instruments are recorded on the balance sheet at their respective fair values. The Company does not use financial instruments or derivatives for any trading or other speculative purposes.

Derivatives Designated as Cash Flow Hedges of Interest Rate Risk

In July 2022, the Company entered into an interest rate swap, which was designated as a hedge against adverse fluctuations in interest rates by reducing the exposure to variability in cash flows relating to either interest payments or total proceeds on a forecasted issuance of long-term debt. The notional amount of this hedge was $275 million. In October 2022, upon issuance of the 2022-1 Senior Notes, the Company terminated the interest rate swap and recorded the related gain of $11 million in accumulated other comprehensive income. As of December 28, 2024, a net gain of $6 million remained in accumulated other comprehensive income. As of December 27, 2025, no amount remained in accumulated other comprehensive income as a result reclassifying $6 million into interest expense, net on the consolidated statements of operations during the year ended December 27, 2025, primarily relating to the accelerated amortization in connection with the refinancing of the 2022-1 Senior Notes in October 2025. The Company reclassified $2 million into interest expense, net during each of the years ended December 28, 2024 and December 30, 2023.

Derivatives Not Designated as Hedges of Exchange Rate Risk

To manage exposure to changes with the Company’s foreign currency intercompany transactions, the Company enters into short-term foreign currency forward contracts.

In December 2021, the Company entered into a cross-currency swap as an economic hedge against exposure to changes in the Canadian dollar in connection with its Canadian securitization transaction, which is discussed in greater detail in Note 9. As of December 27, 2025, the cross-currency swap had an $88 million notional amount and a settlement date in July 2027. Throughout the term of the swap agreements, the Company pays interest at a fixed rate in Canadian dollars and receives interest at a fixed rate in U.S. dollars. In the first quarter of 2026, in connection with the partial repayment of the 2020-1 Senior Notes, the Company settled $10 million of the cross-currency swap reducing the notional amount to $78 million.

In December 2025, the Company entered into a foreign currency derivative contract to mitigate the exposure to the Euro in connection with its agreement to sell ICW. The foreign exchange forward contract had a €400 million notional amount and a long-stop settlement date in October 2026. The Company recorded a loss of $6 million for the year ended December 27, 2025, within foreign currency transaction (gain) loss, net on the consolidated statements of operations. The derivative contract was settled in January 2026 in conjunction with the sale of ICW.

The Company recorded an $8 million loss, a $7 million gain, and a less than $1 million loss for the years ended December 27, 2025, December 28, 2024, and December 30, 2023, respectively, related to the change in fair value of derivatives in foreign currency transaction (gain) loss, net on theconsolidated statements of operations.

The fair value of the derivative instruments held were as follows:

Counterparty Credit Risk

By entering into derivative instrument contracts, the Company exposes itself, from time to time, to counterparty credit risk. Counterparty credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is in an asset position, the counterparty has a liability to the Company, which creates credit risk for the Company. The Company attempts to minimize this risk by selecting counterparties with investment grade credit ratings, limiting its exposure to any single counterparty and regularly monitoring its market position with each counterparty.

Note 13—Shareholders’ Equity

In August 2023, the Board of Directors authorized a program to repurchase up to $50 million of the Company’s common stock (the “Share Repurchase Program”). During the year ended December 30, 2023, the Company repurchased 3,601,694 shares of its common stock for approximately $50 million, at an average price per share of $13.87. All repurchases were made in open market transactions. As of December 30, 2023, the Company completed the purchase of all shares under the Share Repurchase Program. During the years ended December 28, 2024 and December 27, 2025, the Company did not authorize any repurchase of shares.

Note 14—Equity Agreements and Incentive Equity Plan

All activity and amounts reported in this footnote include both continuing and discontinued operations, unless otherwise noted. For information relating to the divestiture of the Company’s car wash businesses, refer to Note 18.

On April 17, 2015, Driven Investor LLC (“Parent”) established the Driven Investor LLC Incentive Equity Plan (the “Equity Plan”). The Equity Plan, among other things, established the ownership of certain membership units in the Parent and defined the distribution rights and allocations of profits and losses associated with those membership units. Additionally, the Equity Plan calls for certain restrictions regarding transfers of units, corporate governance, and Board of Director representation.

In April 2015, the Parent established certain profits interest units as part of the award agreements (the “Award Agreements”) granted pursuant to the Equity Plan. The Award Agreements provide for grants of certain profits interest units (“Profits Interest

Units”) to employees, directors, or consultants of the Parent and subsidiaries. For both the Profits Interest Time Units and Profits Interest Performance Units, if the grantee’s continuous service terminated for any reason, the grantee forfeits all right, title, and interest in and to any unvested units as of the date of such termination, unless the grantee’s continuous service period is terminated by the Company without cause within the six-month period prior to the date of consummation of the change in control and the other vesting criteria are achieved as a result. In addition, the grantee forfeits all right, title, and interest in and to any vested units if the grantee was terminated for cause, breaches any post-termination covenants, or fails to execute any general release required to be executed.

On January 6, 2021, the Company’s Board of Directors approved the 2021 Omnibus Incentive Plan (as amended, the “Plan”) and, effective January 14, 2021, the Company’s shareholders adopted and approved the Plan. At the adoption of the Plan, the maximum number of shares of common stock available for issuance under the Plan were 12,533,984 shares. In conjunction with the closing of the IPO, the Company’s Board granted awards under the Plan to certain of the Company’s employees, representing an aggregate of 5,582,522 shares of common stock. On May 9, 2024, the Company’s shareholders approved a proposal to amend and restate the Plan to increase the number of shares available for issuance by 10,000,000 shares of Common Stock. The Plan provides for the granting of stock options, stock appreciation rights, restricted stock awards, restricted stock units, other share-based awards, other cash-based awards, or any combination of the foregoing to current and prospective employees and directors of, and consultants and advisors to, the Company and its affiliates.

The Company recognized share-based compensation expense of $32 million, $52 million, and $20 million for the years ended December 27, 2025, December 28, 2024, and December 30, 2023, respectively.

Profits Interest Units

Prior to IPO, the Parent’s equity awards included Profits Interest Units as noted above. There were two forms of Profits Interest Units - Time Units and Performance Units. Time Units generally vested infive installments of 20% on each of the first five anniversaries of the grant date or vesting date, provided that the employee remained in continuous service on each vesting date. The Time Units were exchanged for time-based restricted stock awards in connection with the IPO, all of which are vested as of December 27, 2025. In addition, the Company granted time-based and performance-based options in connection with the IPO to certain employees with Profit Interests (each an “IPO Option”). The exchange of Time Units for time-based restricted stock awards did not require modification accounting.

The Performance Units are eligible to vest immediately prior to the effective date of a consummated sale transaction or qualified public offering, including the IPO (a “Liquidity Event”) and the achievement of the other vesting criteria. No vesting occurred as a result of the IPO as the other vesting criteria were not achieved. In connection with the IPO, the Performance Units were exchanged for performance-based restricted stock awards. Employees who received IPO Options had the same vesting conditions for the performance-based portion of the IPO Options as the performance-based restricted stock awards.

In October 2023, the Company converted 2,963,829 performance-based restricted stock awards to time-based restricted stock awards that vested in full on April 30, 2025, subject to a continuous service requirement through the vesting date.

There was no unrecognized compensation expense related to the time-based restricted stock awards at December 27, 2025.

There was $5 million of unrecognized compensation expense related to the performance-based restricted stock awards at December 27, 2025. No compensation costs were recognized for the performance-based restricted stock awards in the presented years given the performance criteria was not met or probable. Certain former employees continue to hold performance-based awards as of December 27, 2025.

Restricted Stock Units and Performance Stock Units

The Company has issued restricted stock units (“RSUs”) and performance stock units (“PSUs”). These awards are eligible to vest provided that the employee remains in continuous service on each vesting date. RSUs typically vest ratably over a period of one tothree years from the grant date. The PSUs generally vest after athree-year performance period. The number of PSUs that vest is contingent on the Company achieving certain performance goals specified in the award agreement, typically, one goal is a performance condition and the other is a market condition. The number of PSU shares that vest may range from 0% to 200% of the original grant, based upon the level of performance. Certain awards are considered probable of meeting vesting requirements, and therefore, the Company has started recognizing expense. For both RSUs and PSUs, the award agreements provide that if the grantee’s continuous service terminates for any reason, the grantee shall forfeit all right, title, and interest in any unvested units as of the termination date.

For RSUs and PSUs with a performance condition, the grant date fair value is based upon the market price of the Company’s common stock on the date of the grant. For PSUs with a market condition, the Company estimates the grant date fair value using the Monte Carlo valuation model. For all PSUs, the Company reassesses the probability of the achievement of the performance condition at each reporting period.

The range of assumptions used for issued PSUs with a market condition valued using the Monte Carlo model were as follows:

There was approximately $21 million of total unrecognized compensation cost related to the unvested RSUs at December 27, 2025, which is expected to be recognized over a weighted-average vesting period of 1.7 years. In addition, there was approximately $21 million of total unrecognized compensation cost related to the unvested PSUs, which is expected to be recognized over a weighted-average vesting period of 2.0 years.

The following are the restricted stock units and performance stock units granted:

(1) Reflects the number of awards achieved above target levels for shares vested in the period.

Stock Options

The Company has issued stock options, which vest provided that the employee remains in continuous service on the vesting date. The stock options were granted at the stock price of the Company on the grant date and permit the holder to exercise them for 10 years from the grant date.

In October 2023, the Company converted 2,438,643 performance-based options to time-based awards that vested in full on April 30, 2025, subject to a continuous service requirement through the vesting date.

The fair value of all time-based units granted or modified was estimated using a Black-Scholes option pricing model using the following weighted-average assumptions for fiscal 2023:

The expected term of the incentive units is based on evaluations of historical and expected future employee behavior. The risk-free interest rate is based on the U.S. Treasury rates at the date of grant with maturity dates approximately equal to the expected life at the grant date. Volatility is based on the historical volatility of guideline public entities that are similar to the Company, as the Company did not have sufficient historical transactions of its own shares to calculate expected volatility. The Company does not intend to pay dividends or distributions in the future.

The following are the stock options granted:

There was less than $1 million of total unrecognized compensation cost related to the unvested stock options at December 27, 2025.

For the years ended December 27, 2025, December 28, 2024, and December 30, 2023, no compensation cost was recognized for the performance-based stock options given the performance criteria was not met or probable.

Employee Stock Purchase Plan

On January 6, 2021, the Company’s Board of Directors approved the Employee Stock Purchase Plan (the “ESPP”) and effective January 14, 2021, the Company’s shareholders adopted and approved the ESPP. The ESPP provide employees of certain designated subsidiaries of the Company with an opportunity to purchase the Company’s common stock at a discount, subject to certain limitations set forth in the ESPP. The ESPP plan authorized the issuance of 1,790,569 shares of the Company’s common stock. Total ESPP contributions were $1 million for each of the years ended December 27, 2025, December 28, 2024, and December 30, 2023 and 76,605,73,196, and 82,546 shares of common stock were purchased in each of the respective periods.

Note 15—Earnings (Loss) Per Share

The Company calculates basic and diluted earnings (loss) per share using the two-class method. The following table sets forth the computation of basic and diluted earnings per share attributable to common shareholders:

Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding for the period. In addition, the Company’s participating securities are related to certain restricted stock awards issued to Section 16 officers, which include non-forfeitable dividend rights.

The Company has performance awards that are contingent on performance conditions which have not yet been met and therefore were excluded from the computation of weighted average shares of 2,342,181,1,628,715, and 1,284,454 for the years ended December 27, 2025, December 28, 2024, and December 30, 2023, respectively.

The following securities were not included in the computation of diluted shares outstanding because the effect would be antidilutive:

Note 16—Income Taxes

The provision for income taxes was computed based on the following amounts of income before income taxes:

The components of the income tax (benefit) expense were as follows:

As presented under the requirements of ASU 2023-09 for the year ended December 27, 2025, A reconciliation between the U.S. federal statutory tax rate and the effective tax rate reflected in the accompanying financial statements is as follows:

(1)The state and local jurisdictions that make up 50% of this line item are: Florida, Louisiana, California, Georgia, Tennessee, Illinois, and Virginia.

In accordance with the guidance prior to the adoption of ASU 2023-09 for years ended December 28, 2024 and December 30, 2023, a reconciliation between the U.S. federal statutory tax rate and the effective tax rate reflected in the accompanying financial statements is as follows:

Deferred tax assets (liabilities) are comprised of the following:

The following table presents the activity included in the deferred tax valuation allowance as follows:

(1)Charges to other accounts include the effects of foreign currency translation and changes to valuation allowances as a result to intraperiod allocations, including income tax expenses of discontinued operations.

During the year ended December 27, 2025, the valuation allowance decreased by $18 million principally related to the favorable tax provisions included in the 2025 enactment of the One Big Beautiful Bill Act connected to taxpayer favorable U.S. federal interest expense rules offset with certain increases related to outside basis differences recorded over the Company’s investment in ICW. Specifically, in the fourth quarter of 2025 the ICW assets met the criteria to be classified as held for sale and discontinued operations. Consequently, the Company recorded a $11 million deferred tax asset on its outside basis difference. However, because it is not more likely than not that this asset will be realized, a full valuation allowance has been recorded against this deferred tax asset. The Company remains indefinitely reinvested with respect to Canada and as a result the Company does not provide for deferred income taxes on the unremitted earnings of these subsidiaries. As of December 27, 2025, the determination of the amount of such unrecognized deferred tax liability is not practicable.

As of December 27, 2025, the Company had pre-tax federal operating loss and interest limitation carry forwards of $130 million and $448 million, respectively, which are both not subject to expiration. State tax effected net operating loss and interest limitation carryforwards were $38 million and $7 million, respectively, for which portions begin to expire in fiscal year 2026. As of December 27, 2025, the Company had pre-tax foreign operating loss and interest limitation carryforwards of

$4 million and $6 million, respectively, for which portions begin to expire in fiscal year 2026, while others are indefinite lived and not subject to expiration.

As of December 27, 2025, the Company had general business tax credit carryforwards of $2 million and foreign tax credit carryforwards of $3 million, which begin to expire in 2044 and 2030, respectively.

At December 27, 2025, the Company had less than $1 million of unrecognized tax benefits. A reconciliation of the change in the accrual for unrecognized income tax benefits is as follows:

The unrecognized income tax benefits could affect the Company's effective tax rate, if recognized. The Company had minimal aggregate accrued interest and penalties at both December 27, 2025 and December 28, 2024.

The Company files income tax returns in the U.S., Canada, and various state and foreign jurisdictions. The Company is generally subject to income tax examinations for years 2019 and later and believes appropriate provisions for all outstanding matters have been made for all jurisdictions and open years.

In accordance with ASU 2023-09 cash paid for income taxes, net of refunds, and inclusive of continued and discontinued operations during the year ended December 27, 2025 was as follows:

Cash paid for income taxes, net of refunds, and inclusive of continued and discontinued operations during the years ended December 28, 2024 and December 30, 2023 was $37 million and $23 million, respectively.

Base Erosion and Profits Shifting (2.0)

During 2021, the Organization for Economic Co-operation and Development (“OECD”) published a Base Erosion and Profits Shifting (“BEPS”) framework and agreed to a two-pillar (“Pillar II”) approach to implement global profit allocation and a 15% corporate global minimum tax of 15%. The inclusive framework calls for the tax law changes to take effect in 2024 and 2025. While it is uncertain whether the U.S. will enact legislation to adopt Pillar II, certain countries in which the Company operates have adopted legislation, and other countries are in the process of introducing legislation to implement Pillar II. The Company does not expect Pillar II to have a material impact on the Company’s tax provision and will continue to evaluate the impact of these tax law changes on future periods.

Note 17—Commitments and Contingencies

The Company is subject to various lawsuits, administrative proceedings, audits, and claims. Some of these lawsuits purport to be class actions and/or seek substantial damages. The Company is required to record an accrual for litigation loss contingencies that are both probable and reasonably estimable. The Company regularly assesses the Company’s insurance deductibles, analyzes litigation information with the Company’s attorneys, and evaluates the loss experience in connection with pending legal proceedings. The Company records its best estimate of a loss when the loss is considered probable and the amount of such loss can be reasonably estimated. When a loss is probable and there is a range of estimated loss with no best estimate within the range, the minimum estimated liability related to the lawsuit or claim is recorded. As additional information becomes available, the potential liability and the Company’s accruals are reassessed, if necessary. Legal fees and expenses associated with the defense of all of the Company’s litigation are expensed as such fees and expenses are incurred. Because of uncertainties related to the resolution of lawsuits and claims, the ultimate outcome may differ materially from the Company’s estimates.

Genesee County Employees’ Retirement System v. Driven Brands Holdings Inc., et al. – On December 22, 2023, Genesee County Employees’ Retirement System filed a putative class action lawsuit in the U.S. District Court for the Western District of North Carolina (the “Court”) against the Company as well as CEO Jonathan Fitzpatrick and former CFO Tiffany Mason (the “Individual Defendants”) alleging violations of Section 10(b) and Rule 10b-5 of the Exchange Act by the Company, as well as violations of Section 20(a) of the Exchange Act by the Individual Defendants. The Court appointed Genesee County Employees’ Retirement System, Oakland County Employees’ Retirement System, and Oakland County Voluntary Employees’ Beneficiary Association (collectively, “Lead Plaintiffs”), as lead plaintiffs on May 31, 2024. Lead Plaintiffs then filed an amended complaint on October 14, 2024, which the Company and the Individual Defendants subsequently moved to dismiss. The Court denied the motion to dismiss on February 20, 2025, and the Company and Individual Defendants moved on March 6, 2025 for reconsideration of the Court’s order or, in the alternative, requested that the Court certify its decision for interlocutory appeal. On October 29, 2025, the Court granted the motion for reconsideration but still denied the motion to dismiss. On November 13, 2025, the parties reached an agreement in principle to resolve the case. On December 19, 2025, Lead Plaintiffs filed an unopposed motion for preliminary approval of the settlement. On February 5, 2026, the Court endorsed the unopposed motion for preliminary approval of the settlement. A final approval settlement conference is set for June 1, 2026. The Company expects the settlement to be covered by the Company’s insurance. A reserve of $25 million within accrued expenses and other liabilities and an insurance receivable for $25 million in prepaid and other assets is included on the consolidated balance sheet as of December 27, 2025 relating to this legal matter.

Terwilliger v. Fitzpatrick, et al. – On January 10, 2025, Daniel Terwilliger filed a purported derivative complaint in the Court against certain current and former Company executive officers and board members. The Terwilliger complaint makes largely the same allegations as those in Genesee complaint, namely, that the Company failed to disclose information, which allegedly resulted in material misstatements about the Company’s business and prospects in its quarterly filings, and purports to state claims for (i) breach of fiduciary duty; (ii) unjust enrichment; (iii) abuse of control; (iv) gross mismanagement; (v) waste of corporate assets; and (vi) violations of Sections 10(b) and 21D of the Exchange Act. On April 30 2025, the Court granted the parties’ joint motion for a stay of proceedings, pending the completion of discovery in the underlying securities class action. The Company disputes the allegations of wrongdoing and intends to vigorously defend against the action. No assessment as to the range of any potential adverse outcome can be determined as of the date of this filing.

Gaiman v. Fitzpatrick, et al. – On April 30, 2025, Jonathan Gaiman filed a purported derivative complaint in the Court against certain current and former Company executive officers and board members, including Jonathan Fitzpatrick, Tiffany Mason, Neal Aronson, Catherine Halligan, Chadwick Hume, Rick Puckett, Karen Stroup, Peter Swinburn, Michael Thompson, and Jose Tomás. The Gaiman complaint makes largely the same allegations as those in the Genesee and Terwilliger complaints, namely, that the Company failed to disclose information, which allegedly resulted in material misstatements about the Company’s business and prospects in its quarterly filings, and purports to state claims for (i) breach of fiduciary duty; (ii) aiding and abetting breaches of fiduciary duty; (iii) unjust enrichment; (iv) waste of corporate assets; (v) violations of Sections 10(b) and 21D of the Exchange Act; and (vi) violations of Sections 14(a) and Rule 14a-9 of the Exchange Act. The Company disputes the allegations of wrongdoing and intends to vigorously defend against the action. No assessment as to the range of any potential adverse outcome can be determined as of the date of this filing.

On May 20, 2025, the Court granted the Parties’ joint motion to consolidate the Gaiman action with the Terwilliger action and to stay the consolidated action pending the completion of discovery in the underlying securities class action.

Kalimon v. Aronson, et al. – On October 7, 2025, John Kalimon filed a purported derivative complaint in the Court against certain current and former Company executive officers and board members. The Kalimon complaint makes largely the same allegations as those in the Genesee, Terwilliger, and Gaiman complaints, namely, that the Company failed to disclose information, which allegedly resulted in material misstatements about the Company’s business and prospects in its quarterly filings, and purports to state claims for (i) breach of fiduciary duty; (ii) unjust enrichment; (iii) violations of Sections 10(b) and 21D of the Exchange Act; and (iv) violations of Sections 14(a) and Rule 14a-9 of the Exchange Act. The Company disputes the allegations of wrongdoing and intends to vigorously defend against the action. No assessment as to the range of any potential adverse outcome can be determined as of the date of this filing.

Bushansky v. Fitzpatrick, et al. – On November 12, 2025, Stephen Bushansky filed a purported derivative complaint in the Delaware Court of Chancery against certain current and former Company executive officers and board members. The Bushansky complaint makes largely the same allegations as those in the Genesee, Terwilliger, Gaiman, and Kalimon complaints, namely, that the Company failed to disclose information, which allegedly resulted in material misstatements about the Company’s business and prospects in its quarterly filings, and purports to state claims for (i) breach of fiduciary duty; (ii) contribution and indemnification; (iii) aiding and abetting breaches of fiduciary duties; and (iv) and unjust enrichment. The Company disputes the allegations of wrongdoing and intends to vigorously defend against the action. No assessment as to the range of any potential adverse outcome can be determined as of the date of this filing.

Marino v. Fitzpatrick, et al. – On December 15, 2025, Gregory Marino filed a purported derivative complaint in the Delaware Court of Chancery against certain current and former Company executive officers and board members. The Marino complaint makes largely the same allegations as those in the Genesee, Terwilliger, Gaiman, Kalimon, and Bushansky complaints, namely, that the Company failed to disclose information, which allegedly resulted in material misstatements about the Company’s business and prospects in its quarterly filings, and purports to state claims for (i) breach of fiduciary duty; (ii) contribution and indemnification; (iii) aiding and abetting breaches of fiduciary duties; (iv) and unjust enrichment. The Company disputes the allegations of wrongdoing and intends to vigorously defend against the action. No assessment as to the range of any potential adverse outcome can be determined as of the date of this filing.

City of Hollywood Police Officers’ Retirement System v. Driven Brands Holdings Inc., et al. – On April 8, 2026, Plaintiff City of Hollywood Police Officers’ Retirement System (“Plaintiff”) filed a putative class action complaint (the “Complaint”) in the U.S. District Court for the Western District of North Carolina against Driven Brands Holdings Inc. (“Driven Brands” or the “Company”), former CEO Jonathan G. Fitzpatrick, former Chief Accounting Officer Michael Beland, former Chief Financial Officer Gary W. Ferrera, Chief Financial Officer Michael F. Diamond, CEO Daniel Rivera, and Chief Accounting Officer Rebecca Fondell (the “Individual Defendants,” and together with Driven Brands, “Defendants”). The Complaint was filed on behalf of a purported class of Driven Brands stockholders who purchased securities between May 3, 2023 and February 24, 2026. Plaintiff alleges that Defendants violated Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and related Rule 10b-5 by making misrepresentations and/or material omissions in securities filings and other public statements relating to the Company’s financial condition and the effectiveness of its internal control over financial reporting and by further concealing material weaknesses. Plaintiff also alleges that the Individual Defendants are separately liable under Section 20(a) of the Exchange Act for the same alleged misstatements and/or material omissions under a control person theory of liability. To date, the Complaint has not been served on the Company or any of the Individual Defendants. The Company disputes the allegations of wrongdoing and intends to vigorously defend against the action. No assessment as to the range of any potential adverse outcome can be determined as of the date of this filing.

Lee v. Fitzpatrick, et al. – On April 17, 2026, Michael Lee filed a purported derivative complaint in the U.S. District Court for the Western District of North Carolina against certain current and former Company executive officers and board members, including Jonathan Fitzpatrick, Michael Diamond, Michael Beland, Gary Ferrera, Daniel Rivera, Rebecca Fondell, Timothy Johnson, Catherine Halligan, Rick Puckett, Michael Thompson, Neal Aronson, Jose Tomás, Damien Harmon, Chad Hume, Karen Stroup, and Peter Swinburn. The Lee complaint makes largely the same allegations as those in the City of Hollywood Complaint, and purports to state claims against the Director and Officer Defendants for breach of fiduciary duty, and against the Director Defendants for violation of Section 14(a) of the Exchange Act. To date, the complaint has not been served. The Company disputes the allegations of wrongdoing and intends to vigorously defend against the action. No assessment as to the range of any potential adverse outcome can be determined as of the date of this filing.

Terwilliger v. Fitzpatrick, et al. – On April 29, 2026, Daniel Terwilliger filed a purported derivative complaint in the U.S. District Court for the Western District of North Carolina against certain current and former Company executive officers and board members, including Jonathan Fitzpatrick, Michael Diamond, Michael Beland, Gary Ferrera, Daniel Rivera, Rebecca Fondell, Catherine Halligan, Rick Puckett, Michael Thompson, Neal Aronson, Jose Tomás, Damien Harmon, Chadwick Hume, Karen Stroup, and Peter Swinburn (together, the “Individual Defendants”). The Terwilliger complaint makes largely the same allegations as those in the City of Hollywood Complaint, and purports to state claims against the Individual Defendants for (i) violations of Section 20(a) of the Exchange Act; (ii) violations of Section 10(b) and Rule 10b-5 of the Exchange Act; (iii) breach of fiduciary duties; (iv) unjust enrichment; (v) abuse of control; (vi) gross mismanagement; and (vii) waste of corporate assets. The Complaint also purports to assert claims against certain Individual Defendants for (i) violations under Section 14(a) of the Exchange Act; and (ii) contribution under Sections 10(b) and 21D of the Exchange Act. On May 5, 2026, the Company was served with the complaint. The Company disputes the allegations of wrongdoing and intends to vigorously defend against the action. No assessment as to the range of any potential adverse outcome can be determined as of the date of this filing.

U.S. Car Wash Lease Guarantees

The Company guaranteed payment and performance obligations under certain real estate leases related to the U.S. Car Wash business, which it sold in April 2025. Certain of these guarantees (the “Guarantees”) remain in effect following the sale. If the primary lessee, the Buyer (as defined below in Note 18), fails to satisfy its obligations under an applicable lease, the Company may be required to make rent and other payments to the landlord pursuant to the applicable Guarantee. The average remaining initial lease term is approximately 15.5 years from December 27, 2025, and the current annual rent on these leases is approximately $39 million. As of December 27, 2025, the Company believes the likelihood that it would be responsible for the entirety of lease payments for the remainder of the lease terms under all of the Guarantees is remote and that its exposure under the Guarantees would be limited due to potential defenses, protections, and recourse, including requirements for landlords to mitigate damages and contractual indemnification rights.

Other than the matters described above, there are no current proceedings or litigation matters involving the Company or its property that the Company believes would have a material adverse effect on the Company’s consolidated financial position or cash flows as of December 27, 2025, although they could have a material adverse effect on the Company’s operating results for a particular reporting period.

Note 18—Discontinued Operations

U.S. Car Wash Divestiture

On February 24, 2025, the Company entered into a definitive agreement to sell its U.S. Car Wash business to Express Wash Operations, LLC dba Whistle Express Car Wash (the “Buyer”) for an aggregate purchase price of $385 million, subject to customary adjustments for cash, indebtedness, working capital, and transaction expenses. Under the terms of the agreement, the Buyer agreed to pay the Company $255 million in cash and deliver to the Company an interest-bearing seller note (“Seller Note”) evidencing a loan in the initial principal amount of $130 million, subject to customary adjustments.

In April 2025, the Company received net cash proceeds of $252 million and consummated the Seller Note. A net gain of $36 million was recognized on sale of the business, which included $11 million of income tax expense, $5 million of transaction costs, and $4 million of working capital adjustments paid to the Buyer in the first quarter of fiscal year 2026. In July 2025, the Company sold the Seller Note for $113 million. Net proceeds were utilized to repay the outstanding balance of $46 million on the Term Loan Facility and $65 million on the Revolving Credit Facility.

This divestiture qualified as discontinued operations as of February 24, 2025 as it represented a strategic shift relating to the Company’s car wash footprint and services offered within the U.S. and has a major effect on the consolidated results of operations. Accordingly, the results of operations for the U.S. Car Wash disposal group and certain transaction related costs have been classified as discontinued operations within the consolidated statements of operations. Results outlined below were historically reflected within the Car Wash Segment within the previously filed financial statements, prior to the Company resegmenting in the current year.

In conjunction with the sale of the U.S. Car Wash business, the Company entered into a Transition Services Agreement (“TSA”) to provide certain support services for up to 12 months or less from the closing date of the sale. These services include, among others, accounting, information technology, treasury, human resources, and marketing services. The Company recognized a benefit of $1 million in selling, general, and administrative expenses during the year ended December 27, 2025 relating to the TSA. In addition, the Company entered into an Employee Services Leasing Agreement (“ESLA”) outlining certain U.S. Car Wash operational employees may be leased from the date of sale through December 31, 2025. Costs associated with the ESLA were reimbursed by the Buyer. The Company recognized a benefit of $4 million in selling, general, and administrative expenses during the year ended December 27, 2025 relating to services associated with the ESLA.

Financial Information of Discontinued Operations

The following table summarizes the results of operations of the U.S. Car Wash business that are being reported as discontinued operations within the consolidated statements of operations:

The following table summarizes the U.S. Car Wash business assets and liabilities classified as discontinued operations within the consolidated balance sheets:

Assets held for sale in the table above represent properties purchased by the Buyer that were initially marketed separately from the sale of the U.S. Car Wash business.

The cash flows related to discontinued operations have not been segregated and are included within the consolidated statements of cash flows. The following table presents cash flow and non-cash information related to the U.S. Car Wash business:

International Car Wash Divestiture

On November 27, 2025, the Company entered into a definitive agreement to sell its ICW business to Neptune Acquisition Bidco Limited. On January 27, 2026, the Company completed the sale of ICW for an aggregate purchase price of€411 million or $490 million.

This divestiture qualified as discontinued operations as of November 27, 2025 as it represented a strategic shift relating to the Company’s car wash footprint and services offered outside of the U.S. and has a major effect on the consolidated results of operations. Accordingly, the results of operations for the ICW disposal group and certain transaction related costs have been classified as discontinued operations within the consolidated statements of operations. Results outlined below were historically reflected within the Car Wash Segment within the previously filed financial statements.

Financial Information of Discontinued Operations

The following table summarizes the results of operations of the ICW business that are being reported as discontinued operations within the consolidated statements of operations:

The following tables summarizes the ICW business assets and liabilities classified as discontinued operations within the consolidated balance sheets:

The cash flows related to discontinued operations have not been segregated and are included within the consolidated statements of cash flows. The following table presents cash flow and non-cash information related to the ICW business:

Note 19—Restatement and Recast of Quarterly Financial Information (Unaudited)

Quarterly Financial Information

The following tables set forth selected unaudited quarterly financial information for fiscal years 2025 and 2024. This unaudited quarterly financial information has been corrected for errors described in Note 3 and recast to remove the effect of discontinued operations. See below and Note 18 for more information regarding discontinued operations. This information has been prepared on the same basis as the audited consolidated financial statements and, in the opinion of the Company, contains all adjustments necessary for a fair statement thereof. Net income (loss) per share calculations are based on the weighted average common shares outstanding for each period presented. Accordingly, the sum of the quarterly net income (loss) per share amounts may not equal the per share amount reported for the year.

Restatement and Recast of Previously Issued Unaudited Condensed Consolidated Financial Statements

The Company has restated herein the previously issued unaudited consolidated statements of operations, consolidated statements of other comprehensive income (loss), consolidated balance sheets, consolidated statements of shareholders’ equity, and consolidated statements of cash flows for each interim period within fiscal years 2025 and 2024. Comparative amounts presented in the 2026 Quarterly Reports on Form 10-Q will retrospectively reflect the restatement and recast financial information.

The Company has presented below a reconciliation from the previously reported to the restated amounts for the interim periods during fiscal years 2025 and 2024. The amounts labeled “As Previously Reported” were derived from the Quarterly Reports on Form 10-Q. As discussed in Note 18, on February 24, 2025, the Company entered into a definitive agreement to sell its U.S. Car Wash business. On April 10, 2025, the Company completed the sale. The net assets and operations of the disposal group met the criteria to be classified as “discontinued operations” and therefore previously reported amounts on the consolidated statements of operations, supplemental cash flow information within the consolidated statements of cash flows and consolidated balance sheets for all periods in 2024 as well as the first quarter in 2025 presented below already reflect the impacts of the sale of U.S. Car Wash as a discontinued operation.

As further discussed in Note 18, on January 27, 2026, the Company completed the sale of ICW. The net assets and operations of the ICW disposal group met the criteria to be classified as discontinued operations beginning in the fourth quarter of 2025. As the ICW business was not previously presented as discontinued operations in the quarterly consolidated financial statements, the effects of the restatement and the recast of the ICW business as discontinued operations on the condensed consolidated financial statements are reflected in the tables below.

Additionally, the following tables present the restatement adjustments discussed in Note 3 to previously issued consolidated financial statements and previously reported condensed consolidated financial statements for the interim periods during the years ended December 27, 2025 and December 28, 2024.