SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

☒ QUARTERLY ~~QUARTERLY~~ REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Delaware
(State or other jurisdiction of incorporation or organization)


47-3595252
(I.R.S. Employer Identification No.)


440 South Church Street, Suite 700
Charlotte, North Carolina
(Address of principal executive offices)


28202
(Zip Code)

Registrant’s telephone number, including area code: (704) 377-8855


Title of each class
Common Stock, $0.01 par value


Trading Symbol
DRVN


Name of each exchange on which registered
The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Large accelerated filer ☐☒

Non-accelerated filer ☒☐

Accelerated filer ☐

Small reporting company ☐

Emerging growth company ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

Driven Brands Holdings Inc.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are generally identified by the use of forward-looking terminology, including the terms “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “likely,” “may,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and, in each case, their negative or other various or comparable terminology. All statements other than statements of historical facts contained in this Quarterly Report, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, trends, plans, objectives of management, impact of accounting standards and guidance, impairments, and expected market growth are forward-looking statements. In particular, forward-looking statements include, among other things, statements relating to: (i) our strategy, outlook, and growth prospects; (ii) our operational and financial targets and dividend policy; (iii) general economic trends and trends in the industry and markets; (iv) the risks and ~~(iv)~~costs associated with the integration of, and or ability to integrate, our stores and business units successfully; (v) the proper application of generally accepted accounting principles, which are highly complex and involve many subjective assumptions, estimates, and judgments; and (vi) the competitive environment in which we operate. Forward-looking statements are not based on historical facts but instead represent our current expectations and assumptions regarding our business, the economy, and other future conditions, and involve known and unknown risks, uncertainties, and other important factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. Given these uncertainties, you should not place undue reliance on these forward-looking statements. It is not possible to predict or identify all such risks. These risks include, but are not limited to, the risk factors that are described under the section titled “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December ~~26, 2020, and~~30, 2023 as well as in our other filings with the Securities and Exchange Commission, which are available on its website at www.sec.gov. Given these uncertainties, you should not place undue reliance on these forward-looking statements.

Forward-looking statements represent our estimates and assumptions only as of the date on which they are made, and we undertake no obligation to update or review publicly any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.

Part ~~I -~~I. Financial Information

Item 1. Financial Statements (Unaudited)

DRIVEN BRANDS HOLDINGS INC. AND SUBSIDIARIES

~~CONDENSED~~ CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

Three months ended
(in thousands, except per share amounts) March 27,
2021 March 28,
2020
Revenue:
Franchise royalties and fees $ 30,414 $ 29,412
Company-operated store sales 183,855 94,891
Independently-operated store sales 56,163 0
Advertising contributions 17,255 14,883
Supply and other revenue 41,733 40,921
Total revenue 329,420 180,107
Operating expenses:
Company-operated store expenses 112,756 63,292
Independently-operated store expenses 31,108 0
Advertising expenses 17,255 14,883
Supply and other expenses 22,489 23,059
Selling, general and administrative expenses 69,050 51,065
Acquisition costs 1,646 195
Store opening costs 289 1,175
Depreciation and amortization 23,852 7,799
Asset impairment charges 1,253 2,912
Total operating expenses 279,698 164,380
Operating income 49,722 15,727
Other expenses, net:
Interest expense, net 18,091 17,516
Loss on foreign currency transactions, net 10,511 3,479
Loss on debt extinguishment 45,498 0
Total other expenses, net 74,100 20,995
Loss before taxes (24,378) (5,268)
Income tax benefit (4,446) (1,321)
Net loss (19,932) (3,947)
Net income (loss) attributable to non-controlling interests 7 (99)
Net loss attributable to Driven Brands Holdings Inc. $ (19,939) $ (3,848)
Loss per share(1):
Basic and diluted $ (0.13) $ (0.04)
Weighted average shares outstanding(1):
Basic and diluted 154,827 88,990


	Three Months Ended
(in thousands, except per share amounts)	March 30, 2024		April 1, 2023
Net revenue:
Franchise royalties and fees	$	45,045	$	43,515
Company-operated store sales	374,456		376,066
Independently-operated store sales	53,047		52,532
Advertising contributions	24,070		21,677
Supply and other revenue	75,608		68,677
Total net revenue	572,226		562,467
Operating Expenses:
Company-operated store expenses	242,053		243,409
Independently-operated store expenses	29,355		29,364
Advertising expenses	24,070		21,677
Supply and other expenses	36,216		37,266
Selling, general, and administrative expenses	116,402		112,328
Acquisition related costs	1,794		1,847
Store opening costs	1,263		1,025
Depreciation and amortization	43,229		38,198


Asset impairment charges and lease terminations	19,326		167
Total operating expenses	513,708		485,281
Operating income	58,518		77,186
Other expenses, net:
Interest expense, net	43,772		38,141
Loss (gain) on foreign currency transactions	4,321		(1,675)

Other expense, net	48,093		36,466
Income before taxes	10,425		40,720
Income tax expense	6,164		10,971
Net income	4,261		29,749
Net income attributable to non-controlling interest	—		—
Net income attributable to Driven Brands Holdings Inc.	$	4,261	$	29,749

Earnings per share:
Basic	$	0.03	$	0.18
Diluted	$	0.03	$	0.17
Weighted average shares outstanding
Basic	159,631		162,784
Diluted	160,604		166,874

~~(1) Shares and loss per share for 2020 have been adjusted to reflect an implied 88,990-for-one stock split that became effective on January 14, 2021. See Note 1 for additional information.~~

The accompanying notes are an integral part of these ~~condensed~~unaudited consolidated financial statements.

~~CONDENSED~~ CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)

Three months ended
(in thousands) March 27,
2021 March 28,
2020
Net loss $ (19,932) $ (3,947)
Other comprehensive income (loss):
   Foreign currency translation adjustment (9,243) (15,767)
   Unrealized gain from cash flow hedges, net of tax 30 0
   Actuarial gain of defined benefit pension plan, net of tax 128 0
Other comprehensive income (loss), net (9,085) (15,767)
Total comprehensive income (loss) (29,017) (19,714)
Comprehensive income attributable to non-controlling interests 41 34
Comprehensive income (loss) attributable to Driven Brands Holdings Inc. $ (29,058) $ (19,748)


	Three Months Ended
(in thousands)		March 30, 2024		April 1, 2023
Net income		$	4,261	$	29,749
Other comprehensive (loss) income:
Foreign currency translation adjustments		(15,907)		11,351
Unrealized loss from cash flow hedges, net of tax expense (benefit) of $15 and ($2), respectively		(617)		(200)
Actuarial (loss) gain of defined pension plan, net of tax expense of $0 and $0, respectively		(8)		16
Other comprehensive (loss) income, net		(16,532)		11,167
Total comprehensive (loss) income		(12,271)		40,916
Comprehensive loss attributable to non-controlling interests		—		(1)
Comprehensive (loss) income attributable to Driven Brands Holdings Inc.		$	(12,271)	$	40,917

The accompanying notes are an integral part of these ~~condensed~~unaudited consolidated financial statements.

~~CONDENSED~~ CONSOLIDATED BALANCE SHEETS (Unaudited)

(in thousands, except share and per share amounts) March 27, 2021 (Unaudited) December 26, 2020
Assets
Current assets:
Cash and cash equivalents $ 175,371 $ 172,611
Restricted cash 10,133 15,827
Accounts and notes receivable, net 104,215 84,805
Inventory 42,913 43,039
Prepaid and other assets 45,697 25,070
Income tax receivable 2,057 3,055
Advertising fund assets, restricted 31,072 29,276
Total current assets 411,458 373,683
Notes receivable, net 3,845 3,828
Property and equipment, net 766,511 827,392
Operating lease right-of-use assets 910,255 884,927
Deferred commissions 9,253 8,661
Intangibles, net 829,406 829,308
Goodwill 1,718,249 1,727,351
Total assets $ 4,648,977 $ 4,655,150
Liabilities and shareholders' equity
Current liabilities:
Accounts payable $ 67,229 $ 67,802
Accrued expenses and other liabilities 185,707 190,867
Income tax payable 4,388 3,513
Current portion of long term debt 17,142 22,988
Advertising fund liabilities 22,906 20,276
Total current liabilities 297,372 305,446
Long-term debt, net 1,428,760 2,102,219
Deferred tax liability 241,305 249,043
Operating lease liabilities 846,360 818,001
Income tax receivable liability 155,970 0
Deferred revenue 22,350 20,757
Long-term accrued expenses and other liabilities 31,551 53,324
Total liabilities 3,023,668 3,548,790
Common stock, $0.01 par value, 900 million shares authorized at March 27, 2021 and December 26, 2020, respectively; 167 million and 89 million shares issued and outstanding at March 27, 2021 and December 26, 2020, respectively(1)
1,674 565
Additional paid-in capital 1,602,092 1,055,172
Retained earnings 12,036 31,975
Accumulated other comprehensive income 7,443 16,528
Total shareholders’ equity attributable to Driven Brands Holdings Inc. 1,623,245 1,104,240
Non-controlling interests 2,064 2,120
Total shareholders' equity 1,625,309 1,106,360
Total liabilities and shareholders' equity $ 4,648,977 $ 4,655,150

~~(1) Common stock at December 26, 2020 has been adjusted to reflect an implied 88,990-for-one stock split that became effective on January 14, 2021. See Note 1 for additional information.~~


(in thousands, except share and per share amounts)	March 30, 2024		December 30, 2023
Assets
Current assets:
Cash and cash equivalents	$	165,513	$	176,522
Restricted cash	657		657
Accounts and notes receivable, net	165,992		151,259
Inventory	82,875		83,171
Prepaid and other assets	49,901		46,714
Income tax receivable	7,337		15,928
Assets held for sale	290,818		301,229
Advertising fund assets, restricted	52,711		45,627
Total current assets	815,804		821,107
Other assets	90,175		56,565
Property and equipment, net	1,425,882		1,438,496
Operating lease right-of-use assets	1,383,400		1,389,316
Deferred commissions	6,643		6,312
Intangibles, net	729,354		739,402
Goodwill	1,435,618		1,455,946
Deferred tax assets	3,453		3,660
Total assets	$	5,890,329	$	5,910,804
Liabilities and shareholders' equity
Current liabilities:
Accounts payable	$	82,843	$	67,526
Accrued expenses and other liabilities	246,522		242,171
Income tax payable	2,022		5,404
Current portion of long-term debt	33,020		32,673
Income tax receivable liability	41,437		56,001
Advertising fund liabilities	33,208		23,392
Total current liabilities	439,052		427,167
Long-term debt	2,905,033		2,910,812
Deferred tax liabilities	149,931		154,742
Operating lease liabilities	1,319,936		1,332,519
Income tax receivable liability	108,215		117,915
Deferred revenue	32,159		30,507
Long-term accrued expenses and other liabilities	29,187		30,419
Total liabilities	4,983,513		5,004,081
Commitments and contingencies (Note 12)
Preferred Stock $0.01 par value; 100,000,000 shares authorized; none issued or outstanding	—		—
Common stock, $0.01 par value, 900,000,000 shares authorized: and 164,079,581 and 163,965,231 shares outstanding; respectively	1,641		1,640
Additional paid-in capital	1,664,764		1,652,401
Accumulated deficit	(705,826)		(710,087)
Accumulated other comprehensive loss	(54,407)		(37,875)
Total shareholders’ equity attributable to Driven Brands Holdings Inc.	906,172		906,079
Non-controlling interests	644		644
Total shareholders' equity	906,816		906,723
Total liabilities and shareholders' equity	$	5,890,329	$	5,910,804

The accompanying notes are an integral part of these ~~condensed~~unaudited consolidated financial statements.

in thousands Common stock Additional paid-in capital Retained earnings Accumulated other
comprehensive
income (loss) Non-controlling
interests Total shareholders'/members' equity
Balance as of December 26, 2020 $ 565 $ 1,055,172 $ 31,975 $ 16,528 $ 2,120 $ 1,106,360
Net income (loss) — — (19,939) — 7 (19,932)
Other comprehensive income (loss) — — — (9,085) — (9,085)
Equity-based compensation expense — 983 — — — 983
Issuance of common stock upon initial public offering, net of underwriting discounts and commissions 1,082 660,418 — — — 661,500
Common stock issued upon underwriter's exercise of over-allotment 48 99,177 — — — 99,225
Repurchase of common stock (21) (42,956) — — — (42,977)
Exercise of stock options — 25 — — — 25
Establishment of income tax receivable liability — (155,970) — — — (155,970)
IPO fees — (14,757) — — — (14,757)
Other — — — — (63) (63)
Balance at March 27, 2021 $ 1,674 $ 1,602,092 $ 12,036 $ 7,443 $ 2,064 $ 1,625,309
Balance as of December 28, 2019 $ 565 $ 242,240 $ 41,983 $ 3,626 $ 1,464 $ 289,878
Net loss — — (3,848) — (99) (3,947)
Other comprehensive income (loss) — — — (15,767) 0 (15,767)
Equity-based compensation expense — (101) 0 — — (101)
Balance at March 28, 2020 $ 565 $ 242,139 $ 38,135 $ (12,141) $ 1,365 $ 270,063


	Three Months Ended
	March 30, 2024			April 1, 2023
(in thousands, except share amounts)	Shares	Amount		Shares	Amount
Preferred stock, $0.01 par value per share	—	$	—	—	$	—
Common stock, $0.01 par value per share
Balance at beginning of period	163,965,231	$	1,640	167,404,047	$	1,674
Stock issued relating to Employee Stock Purchase Plan	43,764	—		26,358	—
Shares issued for exercise/vesting of equity-based compensation awards	170,172	2		130,044	1

Forfeiture of restricted stock awards	(99,586)	(1)		—	—


Balance at end of period	164,079,581	$	1,641	167,560,449	$	1,675
Additional paid-in capital
Balance at beginning of period		$	1,652,401		$	1,628,904
Equity-based compensation expense		11,861			2,564
Exercise of stock options		—			1,380
Stock issued relating to Employee Stock Purchase Plan		502			612





Balance at end of period		$	1,664,764		$	1,633,460
(Accumulated deficit) retained earnings
Balance at beginning of period		$	(710,087)		$	84,795
Net Income		4,261			29,749

Balance at end of period		$	(705,826)		$	114,544
Accumulated other comprehensive loss
Balance at beginning of period		$	(37,875)		$	(62,435)
Other comprehensive (loss) income		(16,532)			11,168
Balance at end of period		$	(54,407)		$	(51,267)
Non-controlling interests
Balance at beginning of period		$	644		$	631

Other comprehensive loss		—			(1)


Balance at end of period		$	644		$	630

Total shareholders’ equity		$	906,816		$	1,699,042

The accompanying notes are an integral part of these ~~condensed~~unaudited consolidated financial statements.

DRIVEN BRANDS HOLDINGS INC. AND SUBSIDIARIES

~~CONDENSED~~ CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)


Supplemental cash flow disclosures - non-cash items:
Capital expenditures included in accrued expenses and other liabilities	$	24,060	$	39,534
Deferred consideration included in accrued expenses and other liabilities	2,955		$	19,069

Supplemental cash flow disclosures - cash paid for:
Interest	$	41,784	$	37,942
Income taxes	3,721		$	5,671

Supplemental cash flow disclosures - non-cash items:
Accrued capital expenditures $ 3,804 $ 4,283
Supplemental cash flow disclosures - cash paid for:
Interest $ 16,424 $ 16,020
Income taxes 1,373 10

The accompanying notes are an integral part of these ~~condensed~~unaudited consolidated financial statements.

DRIVEN BRANDS HOLDINGS INC.

NOTES TO ~~CONDENSED~~ CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Note 1—Description of Business

Description of Business

Driven Brands Holdings Inc., together with its subsidiaries (collectively, the “Company”), is a Delaware corporation and is the parent holding company of Driven Brands, Inc. and Shine Holdco (UK) Limited (collectively, “Driven Brands”). Driven Brands is the largest automotive services company in North America with a growing and highly-franchised base of more than ~~4,200~~5,000 franchised, independently-operated, and company-operated locations across 49 U.S. states and 1413 other countries. The Company has a portfolio of highly recognized brands, including Take 5 Oil ~~Change®~~Change®, Take 5 Car Wash®, Meineke Car Care ~~Centers®~~Centers®, ~~MAACO®~~MAACO®, ~~CARSTAR®~~CARSTAR®, Auto Glass Now®,and 1-800-Radiator & A/C®C® that compete in the automotive services industry. ~~Approximately 82% of the Company’s locations are franchised or independently-operated.~~

~~Initial Public Offering~~

On January 14, 2021, the Company completed an initial public offering (the “IPO”) of approximately 32 million shares of common stock at $22 per share. On February 10, 2021, the Company’s underwriters exercised their over-allotment option to purchase approximately 5 million additional shares of common stock. The Company received total proceeds of $761 million from these transactions, net of the underwriting discounts and commissions.

The Company used the proceeds from the IPO, along with cash on hand, to fully repay the First Lien Term Loan, Second Lien Term Loan, and revolving credit facility assumed as part of the acquisition of International Car Wash Group (“ICWG”) in 2020 (collectively, the “Car Wash Senior Credit Facilities”), which totaled $725 million with interest and fees. The Company recognized a $45 million loss on debt extinguishment related to this settlement, primarily related to the write-off of unamortized discount. The Company cancelled the interest rate and cross currency swaps associated with these debt agreements as part of the settlement. The Company also used $43 million in proceeds to purchase approximately 2 million shares of common stock from certain of our existing shareholders.

~~Income~~ Tax Receivable Agreement

The Company expects to be able to utilize certain tax benefits which are related to periods prior to the effective date of the Company’s IPO and are attributed to current and former shareholders. The Company previously entered into ~~an income tax receivable agreement~~a Tax Receivable Agreement which provides our pre-IPO shareholders with the right to receive payment of 85% of the amount of cash savings, if any, in U.S. and Canadian federal, state, local, and provincial income tax that the Company will actually realize. The ~~income tax receivable agreement is~~Tax Receivable Agreement was effective as of the date of the Company’s ~~IPO, and the~~IPO. The Company ~~has~~ recorded a current tax receivable liability of ~~$156~~$41 million and $56 million as of March ~~27, 2021, which is recorded under long-term liabilities as the income~~30, 2024 and December 30, 2023, respectively, and a non-current tax receivable liability of $108 million and $118 million as of March 30, 2024 and December 30, 2023, respectively, on the ~~condensed~~ consolidated balance ~~sheet.~~

Onsheets. We made an initial payment of approximately $25 million under the Tax Receivable Agreement in January 14, 2021, the Company’s shareholders approved an amendment to the Company’s certificate of incorporation (the "Amendment") to effect an implied 88,990-for-one stock split of shares of the Company’s outstanding common stock. In addition, the Amendment increased the number of authorized shares of the Company's stock from 10,000 shares to 1 billion shares (900 million shares of common stock and 100 million shares of preferred stock). All share and per-share data in the condensed consolidated financial statements and footnotes has been retroactively adjusted to reflect the stock split for all periods presented. The Company does not have any shares of preferred stock outstanding.

Note 2— Summary of Significant Accounting Policies

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 three months ended March ~~27, 2021~~30, 2024 and ~~March 28, 2020, respectively, consist~~April 1, 2023 each consisted of 13 ~~weeks.~~

~~In August 2020, the Company acquired ICWG, which~~weeks, respectively. The Car Wash segment is ~~currently~~ consolidated based on a calendar month ~~that ended on March 31, 2021. See Note 3 for additional discussion regarding the acquisition of ICWG.~~

Basis of Presentation

The unaudited ~~condensed~~ consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ~~("U.S. GAAP"~~(“GAAP”) for interim financial information and pursuant to the rules and regulations of the U.S. Securities and Exchange ~~Commission.~~Commission (“SEC”). In the opinion of management, the unaudited interim financial data includes all adjustments, ~~(consisting~~consisting only of normal recurring ~~adjustments)~~adjustments, necessary for a fair ~~presentation~~statement of the results of operations, balance sheet, cash flows, and shareholders’/members’ equity for the interim periods ~~presented have been reflected.~~presented. The adjustments include the accounts of the Company and its wholly-owned subsidiaries. ~~All significant intercompany balances~~Intercompany accounts and transactions have been eliminated in consolidation.

Certain amounts in the 2020 condensed consolidated financial statements have been reclassified to conform to the 2021 presentation. In the Company's consolidated statements of operations, $1 million of franchise royalties and fees within the Platform Services segment has been reclassified to supply and other revenue to conform to the current year presentation.

These unaudited interim ~~condensed~~ consolidated financial statements should be read in conjunction with the consolidated financial statements as of and for the year ended December ~~26, 2020.~~30, 2023. Certain information and note disclosures normally included in the unaudited financial statements prepared in accordance with ~~U.S.~~ GAAP have been condensed or omitted pursuant to such rules and regulations. The results of operations for the three months ended March ~~27, 2021~~30, 2024 may not be indicative of the results to be expected for any other interim period or the year ending December ~~25, 2021.~~28, 2024.

The preparation of financial statements in conformity with ~~U.S.~~ GAAP requires management to make estimates and assumptions that affect the reported amounts ~~reported~~ in the consolidated financial statements and the related notes to the ~~condensed~~ consolidated financial

statements. ~~Estimates~~Significant items that are ~~based upon historical factors, current circumstances~~subject to estimates and ~~the experience~~assumptions include, but are not limited to, valuation of intangible assets and ~~judgment~~goodwill; income taxes; allowances for credit losses; valuation of ~~the Company’s management.~~derivatives; self-insurance claims; and equity-based compensation. Management evaluates its estimates ~~and assumptions~~ on an ongoing basis and may employ outside experts to assist in its evaluations. Changes in such estimates, based on ~~more accurate future~~historical experience, current conditions, and various other additional information, ~~or different assumptions or conditions,~~ may affect amounts reported in future periods.

~~Deferred IPO costs~~

~~Costs incurred that are directly related~~ Actual results could differ due to uncertainty inherent in the ~~IPO, such as legal and accounting fees, registration fees, printing expenses, and other similar fees and expenses, totaling $9 million were capitalized and included within prepaid and~~ ~~other assets as~~nature of ~~December 26, 2020. Upon completion of the IPO, the Company reclassified~~ these ~~costs, as well as an additional $6 million of IPO costs incurred during the three months ended March 27, 2021, to additional paid-in-capital.~~

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 ashas the ability to access at the measurement date;

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

•Level 3: ~~Inputs are unobservable~~ 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.

Financial assets and liabilities measured at fair value on a recurring basis as of March ~~27, 2021~~30, 2024 and December ~~26, 2020~~30, 2023 are summarized as follows:


Items Measured at Fair Value at March 30, 2024
(in thousands)	Level 1	Level 2	Total
Derivative assets, recorded in other assets	—	2,077	2,077
Derivative liabilities, recorded in accrued expenses and other liabilities	—	174	174

Items Measured at Fair Value at March 27, 2021
(in thousands) Level 1 Level 2 Total
Mutual fund investments held in rabbi trust $ 941 $ 0 $ 941
Derivative liabilities designated as hedging instruments $ 0 $ (990) $ (990)

Items Measured at Fair Value at December 26, 2020
(in thousands) Level 1 Level 2 Total
Mutual fund investments held in rabbi trust $ 704 $ 0 $ 704
Derivative assets not designated as hedging instruments 0 227 227
Total assets measured at fair value on a recurring basis $ 704 $ 227 $ 931
Derivative liabilities designated as hedging instruments $ 0 $ (9,561) $ (9,561)
Derivative liabilities not designated as hedging instruments 0 (12,197) (12,197)
Total derivative liabilities $ 0 $ (21,758) $ (21,758)

~~The fair value of the Company’s derivative instruments are derived from valuation models, which use observable inputs such as quoted market prices, interest rates and forward yield curves.~~


Items Measured at Fair Value at December 30, 2023
(in thousands)	Level 1	Level 2	Total
Derivative assets, recorded in other assets	—	285	285
Derivative liabilities, recorded in accrued expenses and other liabilities	—	493	493

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


	March 30, 2024				December 30, 2023
(in thousands)	Carrying value		Estimated fair value		Carrying value		Estimated fair value
Long-term debt	$	2,970,070	$	2,824,358	$	2,977,996	$	2,800,011

Recently Issued Accounting Standards

In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures. The standard enhances segment disclosure requirements of significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) to assist in understanding how segment expenses and operating results are evaluated. The new standard does not change the definition or aggregation of operating segments. The standard also expands the interim disclosure requirements on a retrospective basis. This ASU is effective for annual periods beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The Company is evaluating the impact of this guidance on its consolidated financial statements and related disclosures.

March 27, 2021 December 26, 2020
(in thousands) Carrying value Estimated fair value Carrying value Estimated fair value
Long-term debt $ 1,445,902 $ 1,499,384 $ 2,125,207 $ 2,169,597

In December 2023, the FASB issued ASU 2023-09,

~~Accumulated Other Comprehensive~~ Improvements to Income ~~(Loss)~~

~~The following tables present changes, net~~Tax Disclosures. This ASU improves the transparency of income tax disclosures, including consistent categories and greater disaggregation of information in ~~each component of accumulated other comprehensive income (loss).~~

Three months ended March 27, 2021
(in thousands) Foreign currency translation adjustment Cash flow hedges Defined benefit pension plan Accumulated other comprehensive income
Balance at December 26, 2020 $ 16,834 $ (87) $ (219) $ 16,528
Net change (9,243) 30 128 (9,085)
Balance at March 27, 2021 $ 7,591 $ (57) $ (91) $ 7,443

Three months ended March 28, 2020
(in thousands) Foreign currency translation adjustment Cash flow hedges Defined benefit pension plan Accumulated other comprehensive income (loss)
Balance at December 28, 2019 $ 3,626 $ 0 $ 0 $ 3,626
Net change (15,767) 0 0 (15,767)
Balance at March 28, 2020 $ (12,141) $ 0 $ 0 $ (12,141)

~~Recently Adopted Accounting Standards~~

~~In December 2019, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2019-12,~~ ~~Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes~~,reconciliation as ~~part~~well as disaggregation of ~~its initiative to reduce complexity in accounting standards. The amendments in this ASU simplify the accounting for~~ income taxes paid by ~~removing certain exceptions to the general principles in Topic 740 and improve consistency by clarifying and amending existing guidance.~~jurisdiction. This ASU is effective for annual periods beginning after December 15, 2024, with early adoption permitted for annual financial statements that have not yet been issued or made available for issuance. The Company ~~adopted~~is evaluating the ~~ASU~~impact of this guidance on ~~December 27, 2020, and the adoption did not have a material impact on our~~its consolidated financial ~~statements.~~statements and related disclosures.

Note 3—~~Business Combinations~~Acquisitions and Divestitures

The Company strategically acquires companies ~~in order~~and assets to increase its footprint and offer products and services that diversify its existing ~~offerings.~~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 ~~estimated~~ fair values atas of the date of the ~~acquisition.~~acquisition with the remaining amount recorded in goodwill.

~~2021~~2024 Acquisitions

~~During the three months ended March 27, 2021, the~~The Company completed one acquisition within the Maintenance segment and one acquisition ~~of 4~~in the international car wash ~~sites, each individually immaterial, which are included~~business within the ~~Company’s~~ Car Wash segment ~~(the “2021 Car Wash Acquisitions”). The~~representing two sites and one site, respectively, for an aggregate total cash consideration, ~~paid for these acquisitions,~~ net of cash acquired ~~and liabilities assumed, was $26~~of less than $2 million.

~~A preliminary estimate of assets acquired and liabilities assumed for the 2021 Car Wash Acquisitions is as follows:~~


~~(in thousands)~~
~~Assets:~~
~~Cash~~	$	7
~~Land and improvements~~	~~4,065~~
~~Building~~	~~13,445~~
~~Equipment~~	~~2,260~~
~~Deferred tax assets~~	67
~~Assets acquired~~	~~19,844~~
~~Liabilities:~~
~~Deferred revenue~~	46
~~Liabilities assumed~~	46
~~Net assets acquired~~	~~19,798~~
~~Total consideration~~	~~25,542~~
~~Goodwill~~	$	~~5,744~~

~~All goodwill was allocated to the Car Wash segment and $6 million is deductible for income tax purposes.~~

~~2020~~2023 Acquisitions

~~Acquisition of International Car Wash Group~~

~~On August 3, 2020, the~~The Company completed two acquisitions within the acquisition of Shine Holdco (UK) Limited, the holding company of ICWG, to expand on its service offerings by entering into the car wash business (the “ICWG Acquisition”). The ICWG Acquisition resulted in the Company acquiring 940 car wash centers in 14 countries across the United States, Europe, and Australia. The following table presents an updated preliminary estimate of the purchase price allocation for the ICWG Acquisition:


~~(in thousands, except shares)~~	August 3, 2020
~~Assets:~~
~~Cash~~	$	~~37,011~~
~~Accounts and notes receivable~~	~~2,591~~
~~Inventory~~	~~12,761~~
~~Fixed assets~~	~~692,486~~
~~Operating lease right-of-use assets~~	~~479,787~~
~~Definite-lived intangibles~~	~~5,972~~
~~Indefinite-lived intangibles~~	~~165,730~~
~~Other assets~~	~~7,476~~
~~Total assets acquired~~	~~1,403,814~~
~~Liabilities:~~
~~Accounts payable~~	~~13,435~~
~~Long-term debt~~	~~656,684~~
~~Deferred income tax liability~~	~~133,776~~
~~Operating lease liabilities~~	~~476,216~~
~~Derivative liabilities~~	~~12,714~~
~~Other liabilities~~	~~82,394~~
~~Total liabilities assumed~~	~~1,375,219~~
~~Net assets acquired~~	~~28,595~~
~~Non-controlling interest acquired~~	~~400~~
~~Total consideration paid (39,169,857 common shares)(1)~~	~~809,000~~
~~Goodwill~~	$	~~780,805~~

~~(1)~~ ~~Common shares issued as consideration have been adjusted to reflect an implied 88,990-for-one stock split that became effective on January 14, 2021. See Note 1 for additional information.~~

The preliminary fair value of the equity consideration was determined based on an estimated enterprise value using a market approach and income approach as of the purchase date, reduced by borrowings assumed. The Company updated its purchase accounting estimatesMaintenance segment during the three months ended ~~March 27, 2021 related to the deferred tax liability and, as a result, reduced goodwill related to the ICWG Acquisition by approximately $1 million.~~

~~Acquisition of Fix Auto~~

On April 20, 2020, the Company acquired 100% of the outstanding equity of Fix Auto USA (“Fix Auto”), a franchisor and operator of collision repair centers, for $29 million, net of cash received of approximately $2 million. This acquisition resulted in the Company acquiring 150 franchised locations and 10 company-operated locations and increased the Company’s collision services footprint.

1, 2023, representing

~~The assets acquired and liabilities assumed from Fix Auto are as follows:~~


~~(in thousands)~~	April 20, 2020
~~Assets:~~
~~Cash~~	$	~~2,020~~
~~Accounts and notes receivable, net~~	~~2,317~~
~~Inventory~~	~~414~~
~~Prepaid and other assets~~	~~293~~
~~Operating lease right-of-use assets~~	~~7,520~~
~~Fixed assets~~	~~1,023~~
~~Definite-lived intangibles~~	~~15,200~~
~~Assets acquired~~	~~28,787~~
~~Liabilities:~~
~~Accounts payable~~	~~1,835~~
~~Accrued expenses and other liabilities~~	~~2,919~~
~~Operating lease liability~~	~~7,520~~
~~Income taxes payable~~	~~673~~
~~Deferred income tax liability~~	~~3,770~~
~~Liabilities assumed~~	~~16,717~~
~~Net assets acquired~~	~~12,070~~
~~Total consideration~~	~~31,460~~
~~Goodwill~~	$	~~19,390~~

~~A summary of total consideration for Fix Auto is as follows:~~


~~(in thousands)~~
~~Cash~~	$	~~28,517~~
~~Fair value of contingent consideration~~	~~2,943~~
~~Total consideration~~	$	~~31,460~~

~~Other Acquisitions~~

During 2020, the Company completed the acquisition of 17 car wash sites, each individually immaterial, which are included within the Company’s Car Wash segment (the “2020 Car Wash Acquisitions”).two sites. The aggregate cash consideration ~~paid~~ for these acquisitions, net of cash acquired and liabilities assumed, was approximately ~~$109~~$2 million.

The Company completed one acquisition within the Car Wash segment during the three months ended April 1, 2023, representing one site. The aggregate cash consideration for this acquisition, net of cash acquired and liabilities assumed, was approximately $11 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. The provisional amounts for assets acquired and liabilities assumed for the ~~2020 Car Wash Acquisitions~~2023 acquisitions are as follows:

2023 Maintenance Segment

(in thousands)

Maintenance

Assets:

~~Cash~~Operating lease right-of-use assets

41658

~~Land~~Property and ~~improvements~~equipment, net

~~18,635~~1,655

~~Building~~

~~42,570~~

~~Equipment~~

~~12,125~~

~~Deferred tax assets~~

~~5,117~~

Assets acquired

~~78,488~~2,313

Liabilities:

Accrued expenses and other liabilities

Operating lease liabilities

641

Total liabilities assumed

658

Cash consideration, net of cash acquired

2,255

Deferred ~~revenue~~consideration

~~368~~95

~~Liabilities assumed~~

~~368~~

~~Net assets acquired~~

~~78,120~~

Total consideration, net of cash acquired

~~108,771~~2,350

Goodwill

~~30,651~~695

2023 Car Wash Segment


(in thousands)	Car Wash
Assets:

Property and equipment, net	$	8,270

Assets acquired	8,270





Cash consideration, net of cash acquired	10,994

Total consideration, net of cash acquired	$	10,994
Goodwill	$	2,724

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 Maintenance and Car Wash segments, is substantially all deductible for income tax purposes.

Deferred Consideration and Transaction Costs

The Company incurred less than $1 million of transaction costs during each of the three months ended March 30, 2024 and April 1, 2023.

During the three months ended March 30, 2024, the Company sold nine company-operated stores within the Paint, Collision, & Glass segment to a franchisee at a purchase price of $18 million. The Company sold certain store assets as well as allocated $9 million of Paint, Collision & Glass goodwill based on the fair value of the segment at the time of sale, resulting in a gain of $6 million on the sale of businesses within selling, general, and administrative expenses on the unaudited consolidated statement of operations during the three months ended March 30, 2024.

Note 4— Revenue from Contracts with Customers

Capitalized costs to obtain a contract as of March ~~27, 2021~~30, 2024 and December ~~26, 2020~~30, 2023 were $9$7 million and $9$6 million, respectively, and are presented within deferred commissions on the ~~condensed~~ consolidated balance sheets. The Company recognized ~~an immaterial amount~~less than $1 million of costs during the three months ended March ~~27, 2021~~30, 2024 and ~~March 28, 2020,~~April 1, 2023, respectively, that were recorded as a contract asset at the beginning of the ~~period.~~periods.

Contract liabilities consist primarily of deferred franchise fees and deferred development fees. The Company had contract liabilities of ~~$22~~$32 million and ~~$21~~$31 million as of March ~~27, 2021~~30, 2024 and December ~~26, 2020,~~30, 2023, respectively, which are presented within deferred revenue on the ~~condensed~~ consolidated balance sheets. The Company ~~recorded an immaterial amount~~recognized $1 million of revenue relating to contract liabilities during each of the three months ended March ~~27, 2021~~30, 2024 and ~~March 28, 2020, respectively, that was recorded as a contract liability as of the beginning of the period.~~April 1, 2023.

Note 5—Segment Information

The Company’s worldwide operations are comprised of the following reportable segments: ~~Maintenance;~~Maintenance, Car ~~Wash;~~Wash, Paint, Collision & ~~Glass;~~Glass, and Platform Services. ~~The Car Wash segment was formed in connection with the acquisition of ICWG in August 2020.~~

In addition to the reportable segments, the Company’s consolidated financial results include “Corporate and Other” activity. Corporate and Other incurs costs related to the advertising revenues and expenses and shared service costs, which are related to finance, IT, human resources, legal, supply chain, and other support services. Corporate and Other activity includes the adjustments necessary to eliminate certain intercompany transactions, namely sales by the Platform Services segment to the Paint, Collision & Glass and Maintenance ~~segments, respectively.~~segments.

Segment results for the three months ended March ~~27, 2021~~30, 2024 and ~~March 28, 2020~~April 1, 2023 are as follows:

Three Months Ended March 28, 2020
(in thousands) Maintenance Paint,
Collision &
Glass Platform
Services Corporate
and Other Total
Franchise fees and royalties $ 7,333 $ 17,746 $ 4,345 $ (12) $ 29,412
Company-operated store sales 87,740 5,846 1,978 (673) 94,891
Advertising 0 0 0 14,883 14,883
Supply and other 4,624 15,354 25,835 (4,892) 40,921
Total revenue $ 99,697 $ 38,946 $ 32,158 $ 9,306 $ 180,107
Segment Adjusted EBITDA $ 21,466 $ 15,877 $ 7,465 $ (13,047) $ 31,761


	Three months ended April 1, 2023
(in thousands)	Maintenance		Car Wash		Paint, Collision & Glass		Platform Services		Corporate and Other		Total
Franchise royalties and fees	$	12,443	$	—	$	24,298	$	6,774	$	—	$	43,515
Company-operated store sales	195,260		102,446		77,479		881		—		376,066
Independently-operated store sales	—		52,532		—		—		—		52,532
Advertising fund contributions	—		—		—		—		21,677		21,677
Supply and other revenue	19,965		2,002		19,026		44,378		(16,694)		68,677
Total net revenue	$	227,668	$	156,980	$	120,803	$	52,033	$	4,983	$	562,467
Segment Adjusted EBITDA	$	72,233	$	41,048	$	35,450	$	17,008	$	(41,251)	$	124,488

Three months ended
(in thousands) March 27,
2021 March 28,
2020
Segment Adjusted EBITDA $ 78,223 $ 31,761
Acquisition related costs(a)
1,646 195
Non-core items and project costs, net(b)
32 1,256
Store opening costs 289 1,175
Sponsor management fees(c)
0 539
Straight-line rent adjustment(d)
2,485 850
Equity-based compensation expense(e)
983 (101)
Foreign currency transaction loss, net(f)
10,511 3,479
Asset impairment and closed store expenses(g)
(786) 4,321
Loss on debt extinguishment(h)
45,498 0
Depreciation and amortization 23,852 7,799
Interest expense, net 18,091 17,516
Loss before taxes $ (24,378) $ (5,268)


	Three Months Ended
(in thousands)	March 30, 2024		April 1, 2023
Income before taxes	$	10,425	$	40,720
Depreciation and amortization	43,229		38,198
Interest expense, net	43,772		38,141
Acquisition related costs(a)	1,794		1,847
Non-core items and project costs, net(b)	4,711		1,824
Store opening costs	1,263		1,025


Cloud computing amortization(c)	1,345		—
Equity-based compensation expense(d)	11,861		2,564
Foreign currency transaction (gain) loss, net(e)	4,321		(1,675)



Asset sale leaseback (gain) loss, impairment and closed store expenses(f)	9,560		1,844

Segment Adjusted EBITDA	$	132,281	$	124,488

(a)Consists of acquisition costs as reflected within the ~~condensed~~unaudited 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. We expect to incur similar costs in

connection with other acquisitions in the future and, under GAAP, such costs relating to acquisitions are expensed as

~~incurred and not capitalized.~~

(b)Consists of discrete items and project costs, including ~~(i)~~ third party consulting and professional fees associated with

strategic transformation initiatives ~~and (ii) other miscellaneous expenses, including non-capitalizable~~as well as non-recurring payroll-related costs.

~~Company’s initial public offering and other strategic transactions.~~

~~(c)Includes management fees paid to Roark Capital Management, LLC.~~cloud computing arrangements.

(d)~~Consists of the non-cash portion of rent expense, which reflects the extent to which our straight-line rent expense~~

~~(e)~~Represents non-cash equity-based compensation expense.

~~(f)~~(e) Represents foreign currency transaction (gains) losses, net ~~losses~~that primarily related to the remeasurement of our intercompany ~~loans. These~~

~~(g)~~(f)~~Represents non-cash charges incurred related~~ Relates to ~~the~~(gains) losses, net on sale leasebacks, impairment of certain fixed assets and operating lease right-of-use assets related to closed and underperforming locations, assets held for sale, and lease exit costs and other costs

~~(h)~~ Refer to ~~Represents the write-off of unamortized discount associated with the repayment of the Car Wash Senior Credit Facilities.~~Note 6 for additional information.

Note 6—~~Long-term~~Assets Held For Sale

The changes in assets held for sale were as follows:


(in thousands)
Balance at December 30, 2023	$	301,229
Additions	38,892
Impairments	(18,347)
Sales and disposals	(30,956)
Balance at March 30, 2024	$	290,818

During the three months ending March 30, 2024, management continued to enhance properties included within held for sale resulting in additions of $39 million. Management evaluated the fair value for all assets included within held for sale, which resulted in an impairment of $18 million for the three months ended March 30, 2024. In addition, during the three months ended March 30, 2024, the Company sold 13 locations resulting in a net gain of $6 million. The Company will continue to evaluate the fair value of assets held for sale, which may result in additional impairments based on unfavorable market or other economical factors in the future.

Note 7 — Long-Term Debt

~~Our~~The Company’s long-term debt obligations consist of the following:

(a)~~Amount~~ Consists primarily ~~consists~~ of finance lease obligations.

Series 2019-3 Variable Funding Securitization Senior Notes

Driven Holdings Revolving Credit Facility

In May 2021, ~~related~~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 ~~this settlement.~~secure a revolving line of credit with a group of financial institutions (the “Revolving Credit Facility”), which provides for an aggregate amount of up to $300 million, and has a maturity date in May 2026 (the “Credit Agreement”). On June 2, 2023, the Credit Agreement was amended pursuant to which as of July 1, 2023, borrowings will incur interest at the Base Rate plus an applicable margin or SOFR plus an applicable term adjustment. The Revolving Credit Facility also includes periodic commitment fees based on the available unused balance and a quarterly administrative fee.

There was $248 million outstanding on the Revolving Credit Facility as of March 30, 2024 with $46 million of borrowings and $46 million of repayments made during the three months ended March 30, 2024.

Note 7—8 — Leases

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

(in thousands) March 27,
2021 December 26,
2020
Right-of-use assets
Finance leases (a)
$ 12,235 $ 14,211
Operating leases 910,255 884,927
Total right-of-use assets $ 922,490 $ 899,138

Current lease liabilities
Finance leases (b)
$ 1,752 $ 2,149
Operating leases (c)
59,491 60,095
Total current lease liabilities $ 61,243 $ 62,244

Long-term lease liabilities
Finance leases (d)
$ 16,234 $ 16,726
Operating leases 846,360 818,001
Total long-term lease liabilities $ 862,594 $ 834,727

~~(a)Finance lease right-of-use assets are included in property and equipment, net on the condensed consolidated balance sheet.~~

~~(b)Current finance lease liabilities are included in current portion of long-term debt on the condensed consolidated balance sheet.~~

~~(c)Current operating lease liabilities are included in accrued expenses and other liabilities on the condensed consolidated balance sheet.~~

~~(d)Long-term finance lease liabilities are included in long-term debt on the condensed consolidated balance sheet.~~

~~The lease cost for operating and finance leases recognized in the condensed consolidated statement of operations for~~During the three months ended March ~~27, 2021 and March 28, 2020 were as follows:~~

Three months ended
(in thousands) March 27,
2021 March 28,
2020
Finance lease expense:
Amortization of right-of-use assets $ 614 $ 138
Interest on lease liabilities 237 105
Operating lease expense 27,748 12,782
Short-term lease expense 1,314 66
Variable lease expense 246 144
Total lease expense, net $ 30,159 $ 13,235

~~The~~30, 2024, the Company ~~also subleases certain facilities to franchisees and recognized $2 million~~sold three maintenance properties in ~~sublease revenue during each~~various locations throughout the U. S. for a total of $4 million. During the three months ended ~~March 27, 2021 and March 28, 2020, respectively, as a component of supply and other revenue on the condensed consolidated statements of operations.~~

~~In March 2021,~~April 1, 2023, the Company sold 11one maintenance and five car wash properties in various locations throughout the ~~United States~~U.S. for a total of ~~$41 million, resulting in a net gain of $2~~$17 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 each have ~~terms ranging from 17 to~~an initial term of 20 ~~years and provide the Company with the option to extend 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 ~~$40~~$3 million and ~~$37~~$3 million, respectively, ~~related to these lease arrangements.~~as of March 30, 2024, and $10 million

~~The weighted average remaining lease term~~and $10 million, respectively, as of April 1, 2023 related to these lease arrangements. The company recorded gains of less than $1 million and $3 million for the three months ended March ~~27, 2021 was 11.0 years for finance leases~~30, 2024 and ~~14.9 years for operating leases. The weighted average discount rate as of March 27, 2021 was 5.79% for finance leases and 4.82% for operating leases.~~April 1, 2023, respectively.

Supplemental cash flow information related to the Company’s lease arrangements for the three months ended March ~~27, 2021~~30, 2024 and ~~March 28, 2020,~~April 1, 2023, respectively, was as follows:

Note ~~8—Share-based~~9 — Equity-based Compensation

On January 6, 2021, the Company’s Board of Directors approved the 2021 Omnibus Incentive Plan (the “Plan”) and effective January 14, 2021, the Company’s shareholders adopted and approved the Plan. The Plan provides for the granting of stock options, stock appreciation rights, restricted stock awards, restricted stock units, other stock-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 maximum number of shares of common stock available for issuance under the Plan is 12,533,984 shares. In conjunction with the closing of the IPO, our Board granted awards under the Plan to certain of our employees, representing an aggregate of 5,582,522 shares of common stock. At March 27, 2021, 6,853,489 shares of common stock were reserved for additional grants under the Plan.

Prior to IPO, the Parent’s equity awards included Profits Interest Units. There were two forms of Profits Interest - Time Units and Performance Units. Time Units generally vested in 5 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. All outstanding Time Units were to vest immediately prior to the effective date of a consummated sale transaction. The Time Units were exchanged for time-based restricted stock awards in connection with the IPO. In addition, the Company granted time-based and performance-based options in connection with the IPO to most employees with Profit Interests (each an “IPO Option”). The time-based restricted stock awards did not require modification accounting.

The Performance Units were to vest immediately prior to the effective date of a consummated sale transaction or qualified public offering, including the IPO (a “Liquidity Event”). The percentage of vesting was based on achieving certain performance criteria. No vesting occurred as a result of the IPO as the minimum performance criteria threshold was not achieved. In connection with the IPO, the Performance Units were exchanged for performance-based restricted stock awards. The vesting conditions of the performance-based restricted stock awards were modified to vest subject to an additional performance condition. Employees who received IPO Options have the same vesting conditions for the performance-based portion of the IPO Options as the performance-based restricted stock awards.

There was approximately $7 million of unrecognized compensation expense related to the time-based restricted stock awards and time-based IPO Options at March 27, 2021, which is expected to be recognized over a weighted-average vesting period of 4.34 years. Forduring the three months ended March ~~27, 2021 and March 28, 2020, respectively, less than $1 million~~30, 2024, consisting of ~~compensation expense was recognized in both periods for the time-based restricted stock awards and time-based IPO Options.~~

There was approximately $92 million of unrecognized compensation expense related to the performance-based restricted stock awards and performance-based IPO Options at March 27, 2021. For the three months ended March 27, 2021 and March 28, 2020, no compensation cost was recognized for the performance-based restricted stock awards and performance-based IPO Options given that none of the performance criteria were met or probable. Once the performance conditions are deemed probable, the Company will recognize compensation cost equal to the portion of the requisite service period that has elapsed. Certain former employees continued to hold performance-based awards after the IPO.

~~The Company established other new awards in connection with the IPO, including~~932,323 restricted stock units (“RSUs”) and 1,056,570 performance stock units (“PSUs”).

Awards ~~established in connection with the IPO may only~~are eligible to vest provided that the employee remains in continuous service on each vesting date. The RSUs vest ~~in 3 installments of 33%~~ratably each year on ~~each of~~ the ~~first~~ anniversary date generally over a two or three ~~anniversaries of the grant date.~~ year period. The PSUs ~~may~~ vest after a three-year ~~period and are~~performance period. The number of PSUs that vest is contingent on the Company achieving certain performance goals, one being a ~~market~~performance condition and the other being a ~~performance~~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, ~~or vest upon achieving a market condition,~~ and therefore, ~~have~~the Company has started recognizing expense. The fair value of the PSUs was determined by using a Monte Carlo simulation, using the following assumptions: (i) an expected term of 2.96 years, (ii) an expected volatility of 41.16%, (iii) a risk-free interest rate of 0.23%, and (iv) no expected dividend.

At March 27, 2021, there was approximately $1 million of total unrecognized compensation cost related to the unvested RSUs, which is expected to be recognized over a weighted-average vesting period of 2.94 years, and there was approximately $3 million of total unrecognized compensation cost related to the unvested PSUs, which is expected to be recognized through December 30, 2023.

For all of the Company’s awards, excluding RSUs and PSUs, if the grantee’s continuous service terminates for any reason, the grantee shall forfeit 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 a Liquidity Event. In addition, the grantee shall forfeit all right, title, and interest in and to any vested units if the grantee resigns, is terminated for cause, breaches any post-termination covenants, or for failing to execute any general release required to be executed. Forboth RSUs and PSUs, 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.

The fair value of the total RSUs, performance-based PSUs, and market-based PSUs granted during the three months ended March 30, 2024 were $12.9 million,

~~On January 6, 2021,~~$8.6 million, and$8.1 million, respectively. The Company based the fair value of the RSUs and performance-based PSUs on the Company’s ~~Board~~stock price on the grant date.

The range of ~~Directors approved~~assumptions used for issued PSUs with a market condition valued using the Employee Stock Purchase Plan (the “ESPP”) and effective January 14, 2021, the Company’s shareholders adopted and approved the ESPP. The ESPP provides employees 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 authorized the issuance of 1,790,569 shares of the Company’s common stock. The initial offering period is one year. As of March 27, 2021, thereMonte Carlo model were ~~0 shares of common stock purchased under the ESPP.~~as follows:


	Three Months Ended
	March 30, 2024	April 1, 2023
Annual dividend yield	—%	—%
Expected term (years)	2.8	2.8
Risk-free interest rate	4.5%	4.51%
Expected volatility	49.2%	38.8%
Correlation to the index peer group	49.2%	60.2%

On March 22, 2021, the Company's Board of Directors approved the International Employee Stock Purchase Plan (the "International ESPP") that provides 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 International ESPP. The shares available under the International ESPP are subject to available shares under the ESPP.

The Company recorded $1$12 million and $3 millionof ~~share-based~~equity-based compensation expense during the three months ended March ~~27, 2021~~30, 2024 and April 1, 2023, respectively, within selling, general, and administrative expenses on the ~~condensed~~unaudited consolidated statements of operations. ~~Share-based compensation expense for the three months ended March 28, 2020 was immaterial.~~

Note ~~9—Loss per share~~

10—Earnings Per Share

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

Three months ended
(in thousands, except per share amounts) March 27,
2021 March 28,
2020
Basic and diluted loss per share:
Net loss attributable to Driven Brands Holdings Inc. $ (19,939) $ (3,848)
Weighted-average common shares outstanding, basic and diluted 154,827 88,990
Loss per share, basic and diluted $ (0.13) $ (0.04)


	Three Months Ended
(in thousands, except per share amounts)	March 30, 2024		April 1, 2023
Basic earnings per share:
Net income attributable to Driven Brands Holdings Inc.	$	4,261	29,749
Less: Net income attributable to participating securities, basic	90		626
Net income after participating securities, basic	4,171		29,123
Weighted-average common shares outstanding	159,631		162,784
Basic earnings per share	$	0.03	$	0.18


	Three Months Ended
(in thousands, except per share amounts)	March 30, 2024		April 1, 2023







Diluted earnings per share:
Net income attributable to Driven Brands Holdings Inc.	$	4,261	$	29,749
Less: Net income attributable to participating securities, diluted	17		559
Net income after participating securities, diluted	$	4,244	$	29,190
Weighted-average common shares outstanding	159,631		162,784
Dilutive effect of share-based awards	973		4,090
Weighted-average common shares outstanding, as adjusted	160,604		166,874
Diluted earnings per share	$	0.03	$	0.17

Basic ~~loss~~earnings per share is computed by dividing the net ~~loss~~income attributable to Driven Brands Holdings Inc. by the weighted-average number of common shares outstanding for the period. Because the Company reported a net loss for the three months ended March 27, 2021 and March 28, 2020, the number of shares used to calculate diluted loss per share is the same as the number of shares used to calculate basic loss per share because the potentially dilutive shares, if any, would have been antidilutive if included. In addition, the ~~Company has~~Company’s participating securities are related to certain restricted stock awards issued to Section 16 officers which include non-forfeitable dividend ~~rights,~~rights.

The Company has 2,067,468 and 5,351,252 shares of performance awards that are contingent on performance conditions which ~~were~~have not ~~included in~~yet been met and therefore have been excluded from the ~~basic or diluted loss per share calculations given~~computation of weighted average shares for the ~~Section 16 officers do not share in the losses of the Company.~~

three months ended March 30, 2024 and April 1, 2023, respectively.

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


	Three Months Ended
Number of securities (in thousands)	March 30, 2024	April 1, 2023
Restricted stock units	458	41


Stock Options	1,740	2,003



Total	2,198	2,044

Note 11—Income Taxes

The Company’s tax provision is comprised of the most recent estimated annual effective tax rate applied to year-to-date ordinary income before taxes. The tax impacts of unusual or infrequently occurring items, including changes in judgment about valuation allowances and effects of changes in tax laws or rates, are recorded discretely in the interim period in which they occur.


~~Restricted stock awards~~			~~609~~
~~Restricted stock units~~			67
~~Performance stock units~~			~~135~~
~~IPO options~~			~~1,514~~
~~Employee stock purchase plan~~			~~123~~
~~Other options~~			48
~~Total~~			~~2,496~~

~~Note 10—Related-Party Transactions~~

three months ended April 1, 2023. The Company had management advisory services agreements with Roark Capital Management, LLC (“Roark”), an affiliated entity, which provided that the Company pay an annual advisory services fee to Roark. The Company and Roark terminated all advisory services agreements in January 2021 in connection with the Company’s initial public offering. The Company paid $1 million under these service agreements duringeffective income tax rate for the three months ended March ~~28, 2020.~~30, 2024 was 59.1% compared to 26.9% for the three months ended April 1, 2023. The effective tax rate for the three months ended March 30, 2024 was primarily driven by the asset impairment charges and the non-deductible equity-based compensation expense. The effective tax rate for three months ended April 1, 2023 was driven by the inclusion of foreign disregarded entity losses.

As of March 27, 2021, the Company has made payments for facilities maintenance services in the aggregate amount of approximately $0.5 million to Divisions Maintenance Group, an entity owned by affiliates of Roark Capital Management, LLC, which is related to the company’s principal stockholders (Driven Equity LLC and RC IV Cayman ICW Holdings LLC). The transactions were reviewed, ratified, and approved by the Audit Committee of the Company’s Board of Directors in accordance with the Company’s Related Person Transactions Policy.

Note ~~11—~~12—Commitments and Contingencies

~~The Company is~~We are subject to various lawsuits, administrative proceedings, audits, and ~~claims arising in the ordinary course of business.~~claims. Some of these lawsuits purport to be class actions and/or seek substantial damages. ~~The Company is~~We are required to record an accrual for litigation loss contingencies that are both probable and reasonably estimable. Management regularly assesses our insurance deductibles, analyzes litigation information with our attorneys, and evaluates our loss experience in connection with pending legal proceedings. We record our 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, we record the minimum estimated liability related to the lawsuit or claim. As additional information becomes available, we reassess the potential liability and revise our accruals, if necessary. Legal fees and expenses associated with the defense of all of our 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 our estimates.

Genesee County Employees’ Retirement System v. Driven Brands Holdings Inc., et al.

~~While~~ – 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 ~~does not presently believe that any~~as well as a current and a former Company executive (the “Individual Defendants”) alleging violations of Section 10(b) and Rule 10b-5 of the ~~legal~~Exchange Act by the Company, as well as violations of Section 20(a) of the Exchange Act by the Individual Defendants. Genesee County Employees’ Retirement System, Oakland County Employees’ Retirement System, and Oakland County Voluntary Employees’ Beneficiary Association (collectively the “Michigan Funds”) have moved for appointment as lead plaintiffs and for Bernstein Litowitz Berger & Grossmann LLP to be appointed as lead counsel for the purported class. The Michigan Funds purport to represent a class of stockholders who purchased Company shares between October 27, 2021 and August 1, 2023. On March 5, 2024, the Michigan Funds filed a notice of unopposed motion asking the Court to grant their prior motion to appoint them as lead plaintiffs. The Court has yet to rule on the unopposed motion. The Company disputes the allegations of wrongdoing and intends to vigorously defend against the action. No assessment as to the likelihood or range of any potential adverse outcome has been made as of the date of this filing.

Other than the matter described above, as of March 30, 2024, there are no current proceedings ~~to which it is currently a party will ultimately~~or litigation matters involving the Company or its property that we believe would have a material adverse ~~impact, there can be no assurance that the Company will prevail in all of the proceedings~~effect on our consolidated financial position or ~~that the Company will not incur~~cash flows, although they could have a material ~~losses from them.~~adverse effect on our operating results for a particular reporting period.

2118

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

The following discussion and analysis for Driven Brands Holdings Inc. and Subsidiaries (“Driven ~~Brands”,~~Brands,” “the ~~Company”, “we”, “us”~~Company,” “we,” “us,” or “our”) should be read in conjunction with our ~~condensed~~ consolidated financial statements and the related notes to our ~~condensed~~ consolidated financial statements included elsewhere in this quarterly report. On August 3, 2020, the Company completed the ICWG Acquisition (the “ICWG Acquisition Date”). The Company’s results of operations for the three months ended March 27, 2021 include the operations of ICWG. In this Management’s Discussion and Analysis of Financial Condition and Results of Operations, no comparable information is discussed with respect to ICWG for the three months ended March 28, 2020, which is prior to the ICWG Acquisition Date. We operate on a ~~52/~~52 or 53-week fiscal year, which ends on the last Saturday in December. The three months ended March ~~27, 2021~~30, 2024 and ~~March 28, 2020~~April 1, 2023 were both 13 week periods.

Overview ~~of Operations~~

Driven Brands is the largest automotive services company in North America with a growing and highly-franchised base

of more than ~~4,200~~5,000 locations across 49 U.S. states and 1413 other countries. Our scaled, diversified platform fulfills an extensive range of core ~~consumer~~retail and commercial automotive needs, including paint, collision, glass, and repair ~~car wash, oil change and maintenance. Driven Brands provides~~services, as well as a ~~breadth~~variety of ~~high-quality and~~ high-frequency services, such as oil changes and car washes. We have continued to ~~a wide range~~grow our base of ~~customers, who rely on their cars in all economic environments to get to work and in many other aspects of their daily lives. Our asset-light business model has generated~~ consistent recurring revenue by adding new franchised and ~~strong operating margins with limited maintenance capital expenditures, which has resulted in significant cash flow generation~~company-operated stores and ~~capital-efficient~~same store sales growth.

~~We have a diversified portfolio~~ Driven Brands generated net revenue of highly-recognized brands, including Take 5 Oil Change®, Meineke Car Care Centers®, MAACO®, CARSTAR®, and 1-800-Radiator & A/C® that compete in the large, growing, recession-resistant and highly-fragmented automotive care industry. Our U.S. industry is underpinned by a large, growing population of more than 275approximately $572 million vehicles in operation, and is expected to continue its long-term growth trajectory given (i) long-term increases in annual miles traveled; (ii) consumers more frequently outsourcing automotive services due to vehicle complexity; (iii) increases in average repair costs and (iv) average age of the car on the road getting older. Duringduring the three months ended March ~~27, 2021, our network generated $329 million in revenue from $1 billion in system-wide sales. We serve a diverse mix~~30, 2024, an increase of customers, with sales coming from retail customers and commercial customers such as fleet operators and insurance carriers. Our success is driven in large part by our mutually beneficial relationships with more than 2,500 individual franchisees and independent operators.

~~Our organic growth is complemented by a consistent and repeatable M&A strategy, having completed more than 50 acquisitions since 2015. Notably, in August 2020 we acquired ICWG, the world’s largest conveyor car wash company by location count~~ ~~with more than 900 locations across 14 countries, demonstrating our continued ability to pursue and execute upon scalable and highly strategic acquisitions.~~

~~Significant Factors Impacting Financial Results~~

During the second half of fiscal year 2020, we completed the acquisition of ICWG and several other independently-owned car wash sites, which launched our entry into the car wash market and created a new operating and reportable segment. During the second quarter of fiscal year 2020, we completed the acquisition of Fix Auto, which is included in our Paint, Collision & Glass segment, and we also completed acquisitions of several independently-owned oil change shops, which are included in our Maintenance segment. These acquisitions were a core driver of growth in our key performance indicators and our financial results for the three months ended March 27, 2021, as2% compared to the ~~three months ended March 28, 2020. For additional information on our acquisitions, see Note 3 to the condensed consolidated financial statements.~~

~~For the~~ ~~three months ended March 27, 2021, we recognized a net loss of $20 million, or $(0.13) per diluted share, compared to a net loss of $4 million, or $(0.04) per diluted share, for the~~ ~~three months ended March 28, 2020~~. This decrease was primarily due to a $45 million loss on debt extinguishment related to the write-off of unamortized discount associated with the early termination of the Car Wash Senior Credit Facilities, $16 million increase in depreciationprior year, and ~~amortization expense related to acquisitions~~, and a $7 million increase in net loss on foreign currency transactions. These additional charges were offset by a $149 million increase in revenue, primarily related to the acquisition of ICWG and Fix Auto, as well as continued organic store growth, offset by a corresponding increase in operating expenses related to this growth. Adjusted Net Income increased $23 million for the three months ended March 27, 2021 to $30 million, compared to $7 million for the three months ended March 28, 2020. The increase in Adjusted Net Income was primarily due to increased store count and associated system-wide sales ~~driven by a combination~~ of organic growth and acquisitions, particularly the acquisition of ICWG. See Note 3 to our condensed consolidated financial statements for additional information about acquisitions. Adjusted EBITDA was $78 million for the three months ended March 27, 2021, an increase of $47 million compared to Adjusted EBITDA of $31 million for the three months ended March 28, 2020. Adjusted Net Income and Adjusted EBITDA are non-GAAP financial measures of performance. For ~~a discussion of our use of these non-GAAP measures and a reconciliation from net loss to Adjusted Net Income and Adjusted EBITDA, see “Reconciliation of Non-GAAP Financial Information~~”.

~~As a result of pent-up demand, the economic stimulus package, and rising consumer confidence, total system-wide sales were over $1~~approximately $1.6 billion during the three months ended March ~~27, 2021,~~30, 2024, an increase of ~~28%~~7% from the ~~three months ended March 28, 2020.~~ prior year.

Q1 2024 Highlights and Key Performance Indicators

(as compared to same period in the prior year, unless otherwise noted)

•Net revenue increased 2% to $572 million, driven by same store sales and net store growth.

•Consolidated same store sales increased 0.7%.

•The Company added 20 net new stores in the quarter.

•Net Income decreased 86% to $4 million or $0.03 per diluted share in the current ~~outbreak~~year, primarily relating to impairment charges, increased equity-based compensation expense, depreciation and amortization and interest expenses as well as an unfavorable impact from foreign exchange, partially offset by gains primarily from the sale of ~~COVID-19 led~~a business, assets held for sale, and favorable lease terminations.

•Adjusted Net Income (non-GAAP) decreased 3% to ~~adverse impacts on global economies, including the U.S., Canada~~$38 million or $0.23 per diluted share. The decrease was primarily due to decreased Segment Adjusted EBITDA within our Car Wash and ~~Europe during fiscal year 2020~~Paint, Collision & Glass segments as well as increased interest and ~~into fiscal year 2021. While COVID-19 did not have a material adverse effect on~~depreciation expense, partially offset by increased Segment Adjusted EBITDA within our ~~business operations for the three months ended March 27, 2021, an~~Maintenance and Platform Services segments.

•Adjusted EBITDA (non-GAAP) increased ~~level of volatility~~6% to $131 million. The increase was primarily due to increased Segment Adjusted EBITDA within our Maintenance and ~~uncertainty still exists,~~Platform Services segments, partially offset by decreased Segment Adjusted EBITDA within our Car Wash and ~~we are continuing to monitor any potential impact to our business.~~Paint, Collision & Glass segments.

Key Performance Indicators

Key measures that we use in assessing our business and evaluating our segments include the following:

System-wide sales. System-wide sales represent the total of net sales for our franchised, independently-operated, and company-operated stores. This measure allows management to better assess the total size and health of each segment, our overall store performance, and the strength of our market position relative to competitors. Sales at franchised stores are not included as revenue in our results from operations, but rather, we include franchise royalties and fees that are derived from sales at franchised stores. Franchise royalties and fees revenue represented 9% and 16%, respectively, of our total revenue for the three months ended March 27, 2021 and March 28, 2020, respectively. For the three months ended March 27, 2021 and March 28, 2020, approximately 97% and 88%, respectively, of franchise royalties and fees revenue is attributable to royalties, with the remaining balance attributable to license and development fees. Revenue from company-operated stores represented 56% and 53% of our total revenue for the three months ended March 27, 2021 and March 28, 2020, respectively. Revenue from independently-operated stores represented 17% of our total revenue for the three months ended March 27, 2021.

Store count. Store count reflects the number of franchised, independently-operated, and company-operated stores open at the end of the reporting period. Management reviews the number of new, closed, acquired, and divested stores to assess net unit growth and drivers of trends in system-wide sales, franchise royalties and fees revenue, company-operated store sales, and independently-operated store sales.

Same store sales. Same store sales reflect the change in sales year-over-year for the same store base. We define the same store base to include all franchised, independently-operated, and company-operated stores open for comparable weeks during the given fiscal period in both the current and prior ~~year.~~year, which may be different from how others define similar terms. This measure highlights the performance of existing stores, while excluding the impact of new store openings and closures and acquisitions and divestitures.

Segment Adjusted EBITDA. We define Segment Adjusted EBITDA as earnings before interest expense, net, income tax expense, and depreciation and amortization, with further adjustments for acquisition-related costs, ~~straight-line rent,~~ equity compensation, loss on debt extinguishment, foreign currency transaction related gains or losses, store opening costs, cloud computing amortization, and certain non-recurring and non-core, infrequent or unusual charges. Segment Adjusted EBITDA is a supplemental measure of operating performance of our segments and may not be comparable to similar measures reported by other companies. Segment Adjusted EBITDA is a performance metric utilized by our Chief Operating Decision Maker to allocate resources to and assess performance of our segments. Refer to Note 5 in our ~~condensed~~ consolidated financial statements for a reconciliation of income before taxes to Segment Adjusted EBITDA ~~to income before taxes~~ for the three months ended March ~~27, 2021~~30, 2024 and ~~March 28, 2020.~~April 1, 2023.

2320

The following table sets forth our key performance indicators for the three months ended March ~~27, 2021~~30, 2024 and ~~March 28, 2020:~~April 1, 2023:

Three months ended

Three Months Ended

(in thousands, except store count or as otherwise noted)

March 27, 2021

March 28, 2020

System-Wide Sales

System-Wide Sales by Segment:

Maintenance

277,884

230,500

Maintenance

Car Wash

113,211

—

Paint, Collision & Glass

542,433

495,635

Paint, Collision & Glass

Platform Services

69,356

56,848

Total

1,002,884

782,983

Total

System-Wide Sales by Business Model:

Franchised Stores

762,693

688,092

Franchised Stores

Company-Operated Stores

184,028

94,891

Independently-Operated Stores

56,163

—

Independently-Operated Stores

Total

1,002,884

782,983

Store Count

Store Count by Segment:

Maintenance

1,470

1,431

Maintenance

Car Wash

954

—

Paint, Collision & Glass

1,627

1,463

Paint, Collision & Glass

Platform Services

198

Total

4,249

3,092

Total

Store Count by Business Model:

Franchised Stores

2,766

2,598

Franchised Stores

Company-Operated Stores

749

494

Independently-Operated Stores

734

—

Independently-Operated Stores

Total

4,249

3,092

Same Store Sales %

Maintenance

16.5

(2.8

Maintenance

Car Wash

Paint, Collision & Glass

Total consolidated

Segment Adjusted EBITDA

Maintenance

Car Wash

Paint, Collision & Glass

(9.4

4.6

Platform Services

22.0

2.2

Total

0.5

2.2

Segment Adjusted EBITDA

Platform Services

Adjusted EBITDA as a percentage of net revenue by segment

Maintenance

40,440

21,466

Car Wash

34,155

—

Car Wash

Paint, Collision & Glass

17,639

15,877

Platform Services

11,008

7,465

Platform Services

Total consolidated

Reconciliation of Non-GAAP Financial Information

To supplement our consolidated financial statements prepared and presented in accordance with GAAP, we use certain non-GAAP financial measures throughout this quarterly report, as described further below, to provide investors with additional useful information about our financial performance, to enhance the overall understanding of our past performance and future prospects and to allow for greater transparency with respect to important metrics used by our management for financial and operational decision-making.

Non-GAAP financial measures have limitations in their usefulness to investors because they have no standardized meaning prescribed by GAAP and are not prepared under any comprehensive set of accounting rules or principles. In addition, non-GAAP financial measures may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies. As a result, non-GAAP financial measures should be viewed as supplementing, and not as an alternative or substitute for, our consolidated financial statements prepared and presented in accordance with GAAP.

Adjusted Net Income/Adjusted Earnings per Share. We define ~~adjusted net income~~Adjusted Net Income as net income calculated in accordance with GAAP, adjusted for acquisition-related costs, ~~straight-line rent,~~ equity compensation, loss on debt extinguishment, cloud computing amortization, and certain non-recurring, non-core, infrequent or unusual charges, amortization related to acquired intangible assets and the tax effect of the adjustments. Adjusted Earnings Per Share is calculated by dividing Adjusted Net Income by the weighted average shares outstanding. Management believes this non-GAAP financial measure is useful because it is a key measure used by our management team to evaluate our operating performance, generate future operating plans, and make strategic decisions.

The following table provides a reconciliation of Net Income to Adjusted Net Income and Adjusted Earnings per ~~Share to net loss as defined by GAAP:~~

Adjusted Net ~~Income/Adjusted~~Income /Adjusted Earnings per Share

Three months ended
(in thousands, except per share data) March 27, 2021 March 28, 2020
Net loss $ (19,932) $ (3,947)
Acquisition related costs(a)
1,646 195
Non-core items and project costs, net(b)
32 1,256
Sponsor management fees(c)
— 539
Straight-line rent adjustment(d)
2,485 850
Equity-based compensation expense(e)
983 (101)
Foreign currency transaction loss, net(f)
10,511 3,479
Asset impairment and closed store expenses(g)
(786) 4,321
Loss on debt extinguishment(h)
45,498 —
Amortization related to acquired intangible assets(i)
3,652 3,965
Adjusted net income before tax impact of adjustments 44,089 10,557
Tax impact of adjustments(j)
(13,641) (3,626)
Adjusted net income 30,448 6,931
Net income (loss) attributable to non-controlling interest 7 (99)
Adjusted net income attributable to Driven Brands Holdings Inc. $ 30,441 $ 7,030
Weighted average shares outstanding(k)
Basic 154,827 88,990
Diluted 158,761 88,990
Adjusted earnings per share(k)
Basic $ 0.19 $ 0.08
Diluted $ 0.19 $ 0.08


	Three Months Ended
(in thousands, except per share data)	March 30, 2024		April 1, 2023
Net income	$	4,261	$	29,749
Acquisition related costs(a)	1,794		1,847
Non-core items and project costs, net(b)	4,711		1,824


Cloud computing amortization(c)	1,345		—
Equity-based compensation expense(d)	11,861		2,564
Foreign currency transaction loss (gain), net(e)	4,321		(1,675)



Asset sale leaseback (gain) loss, impairment and closed store expenses(f)	9,560		1,844

Amortization related to acquired intangible assets(g)	7,020		6,036

Valuation allowance for deferred tax asset(h)	1,134		—
Adjusted net income before tax impact of adjustments	46,007		42,189
Tax impact of adjustments(i)	(7,885)		(3,085)
Adjusted net income	38,122		39,104
Net income attributable to non-controlling interest	—		—
Adjusted net income attributable to Driven Brands Holdings Inc.	$	38,122	$	39,104

Earnings per share
Basic	$	0.03	$	0.18
Diluted	$	0.03	$	0.17

Adjusted earnings per share
Basic	$	0.23	$	0.24
Diluted	$	0.23	$	0.23

Weighted average shares outstanding for Net Income
Basic	159,631		162,784
Diluted	160,604		166,874

Adjusted EBITDA. We define Adjusted EBITDA as earnings before interest expense, net, income tax expense, and depreciation and amortization, with further adjustments for acquisition-related costs, ~~straight-line rent,~~ equity compensation, loss on debt extinguishment, cloud computing amortization, and certain non-recurring, non-core, infrequent or unusual charges. Adjusted EBITDA may not be comparable to similarly titled metrics of other companies due to differences in methods of calculation. Management believes this non-GAAP financial measure is useful because it is a key measure used by our management team to evaluate our operating performance, generate future operating plans, and make strategic decisions.

The following table provides a reconciliation of Net Income to Adjusted ~~EBITDA to net loss:~~EBITDA:

Adjusted EBITDA
Three months ended
March 27, 2021 March 28, 2020
Net loss $ (19,932) $ (3,947)
Income tax benefit (4,446) (1,321)
Interest expense, net 18,091 17,516
Depreciation and amortization 23,852 7,799
EBITDA 17,565 20,047
Acquisition related costs(a)
1,646 195
Non-core items and project costs, net(b)
32 1,256
Sponsor management fees(c)
— 539
Straight-line rent adjustment(d)
2,485 850
Equity-based compensation expense(e)
983 (101)
Foreign currency transaction loss, net(f)
10,511 3,479
Asset impairment and closed store expenses(g)
(786) 4,321
Loss on debt extinguishment(h)
45,498 —
Adjusted EBITDA $ 77,934 $ 30,586


Adjusted EBITDA

	Three Months Ended
	March 30, 2024		April 1, 2023
Net income	$	4,261	$	29,749
Income tax expense	6,164		10,971
Interest expense, net	43,772		38,141
Depreciation and amortization	43,229		38,198
EBITDA	97,426		117,059
Acquisition related costs(a)	1,794		1,847
Non-core items and project costs, net(b)	4,711		1,824
Cloud computing amortization(c)	1,345		—
Equity-based compensation expense(d)	11,861		2,564
Foreign currency transaction loss (gain), net(e)	4,321		(1,675)



Asset sale leaseback (gain) loss, impairment and closed store expenses(f)	9,560		1,844
Adjusted EBITDA	$	131,018	$	123,463

a.(a)Consists of acquisition costs as reflected within the ~~condensed~~unaudited 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. We expect to incur similar costs in connection with other acquisitions in the future and, under GAAP, such costs relating to acquisitions are expensed as incurred and not capitalized.

b.(b)Consists of discrete items and project costs, including ~~(i) third-party~~third party consulting and professional fees associated with strategic transformation initiatives ~~and (ii) other miscellaneous expenses, including non-capitalizable~~as well as non-recurring payroll-related costs.

(c) Includes non-cash amortization expenses relating to ~~the Company’s initial public offering and other strategic transactions.~~cloud computing arrangements.

c.(d)~~Includes management fees paid to Roark Capital Management, LLC.~~

d.~~Consists of the non-cash portion of rent expense, which reflects the extent to which our straight-line rent expense recognized under GAAP exceeds or is less than our cash rent payments.~~

e.Represents non-cash equity-based compensation expense.

f.(e) Represents foreign currency transaction (gains) losses, net ~~losses~~that primarily related to the remeasurement of our intercompany ~~loans. These~~loans as well as gains and losses ~~are slightly offset by unrealized gains~~ on ~~remeasurement of~~ cross currency ~~swaps.~~swaps and forward contracts.

g.(f)Relates to ~~the~~(gains) losses, net on sale leasebacks, impairment of certain fixed assets and operating lease right-of-use assets related to closed ~~locations. Also represents~~and underperforming locations, assets held for sale, and lease exit costs and other costs associated with stores that were closed prior to ~~their~~the respective lease termination dates.

h.~~Represents the write-off of unamortized discount associated with early termination of debt.~~

i.(g) Consists of amortization related to acquired intangible assets as reflected within depreciation and amortization in the ~~condensed~~unaudited consolidated ~~statements~~statement of operations.

j.(h) Represents valuation allowances on income tax carryforwards in certain domestic jurisdictions that are not more likely than not to be realized.

(i) Represents the tax impact of adjustments associated with the reconciling items between net income and Adjusted Net Income, excluding the provision for uncertain tax positions and valuation allowance for certain deferred ~~taxes.~~tax assets. To determine the tax impact of the deductible reconciling items, we utilized statutory income tax rates ranging from 9% to ~~38%,~~36% depending upon the tax attributes of each adjustment and the applicable jurisdiction.

Share and per share amounts have been adjusted to reflect an implied 88,990-for-one stock split that became effective on January 14, 2021. See Note 1 in the accompanying condensed consolidated financial statements for additional information.

2624

Results of Operations for the ~~three months ended~~Three Months Ended March ~~27, 2021 compared~~30, 2024 Compared to the Three Months Ended April 1, 2023

Net Income

We recognized net income of $4 million, or $0.03 per diluted share, for the three months ended March ~~28, 2020~~30, 2024, compared to $30 million, or $0.17 per diluted share, for the three months ended April 1, 2023. The decrease of approximately $25 million was primarily due to the following:

•non-cash impairment charges of $19 million, primarily relating to assets held for sale in the current period;

•increased interest expense of $6 million, primarily due to increased borrowings and higher variable rates on the Revolving Credit Facility;

•unfavorable impact from foreign exchange of $6 million;

•increased depreciation and amortization expenses of $5 million relating to capital expenditures and new store openings that occurred in the prior 12 months; and

•decreased operating margins within the Car Wash and Paint, Collision & Glass segments.

These decreases were partially offset by:

•a gain primarily relating to the sale of a business, assets held for sale, and favorable lease terminations of approximately $13 million during the three months ended March 30, 2024 compared to a loss of $2 million during the three months ended April 1, 2023;

•a decrease in tax expense of $5 million; and

•positive same store sales, primarily within the Maintenance segment, and organic store count that occurred in the prior 12 months.

Adjusted Net Income

Adjusted net income was $38 million for the three months ended March 30, 2024, a decrease of $1 million, compared to $39 million for the three months ended April 1, 2023. This decrease was primarily due to the following:

•increased interest expense of $6 million, primarily due to increased borrowings and higher variable rates on the Revolving Credit Facility;

•increased depreciation expenses of $5 million relating to capital expenditures and new store openings that occurred in the prior 12 months; and

•decreased operating margins within the Car Wash and Paint, Collision & Glass segments.

The decreases were partially offset by:

•positive same store sales, primarily within the Maintenance segment, and organic store count that occurred in the prior 12 months.

Adjusted EBITDA

Adjusted EBITDA was $131 million for the three months ended March 30, 2024, an increase of $8 million, compared to $123 million for the three months ended April 1, 2023. The increase in Adjusted EBITDA was primarily due to:

•positive same store sales, primarily within the Maintenance segment, and organic store count that occurred in the prior 12 months.

The increases were partially offset by:

•decreased operating margins within the Car Wash and Paint, Collision & Glass segments.

To facilitate the review of our results of operations, the following tables set forth our financial results for the periods indicated. All information is derived from the ~~condensed~~ consolidated statements of operations. ~~Independently-operated store sales and expenses are derived from our acquisition~~Certain percentages presented have been rounded to the nearest number, therefore, totals may not equal the sum of ~~ICWG and are only reflected~~the line items in the ~~results of operations from the August 3, 2020 acquisition date through the end of our current period, and, as such, it is not meaningful to compare to prior period results.~~tables below.

Net Revenue


			Three months ended
		Three Months Ended
		Three Months Ended
		Three Months Ended
(in thousands)
(in thousands)
(in thousands)	(in thousands)		March 27, 2021		March 28, 2020		Change
Franchise royalties and fees	Franchise royalties and fees		$	30,414	$	29,412	$	1,002	3	%
Franchise royalties and fees
Franchise royalties and fees
Company-operated store sales
Company-operated store sales
Company-operated store sales	Company-operated store sales		183,855		94,891		88,964		94	%
Independently-operated store sales	Independently-operated store sales		56,163		—		56,163		N/M
Advertising contributions			17,255		14,883		2,372		16	%
Independently-operated store sales
Independently-operated store sales
Advertising fund contributions
Advertising fund contributions
Advertising fund contributions
Supply and other revenue	Supply and other revenue		41,733		40,921		812		2	%
Total revenue			$	329,420	$	180,107	$	149,313	83	%
Supply and other revenue
Supply and other revenue
Total net revenue
Total net revenue
Total net revenue

Franchise Royalties and Fees

Franchise royalties and fees increased $1$2 million, ~~for the three months ended March 27, 2021 as compared to the three months ended March 28, 2020. This was~~or 4%, primarily due to the addition of 168 franchised stores and a corresponding $75 million increase in franchised system-wide sales as compared to the three months ended March 28, 2020. The increase in franchise system-wide sales was primarily due to the acquisition of Fix Auto in April 2020, which contributed $84 million of system-wide sales during the three months ended March 27, 2021.


			Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)			3
~~Condensed~~ Consolidated Statements of ~~Operation~~sOperations			3
~~Condensed~~ Consolidated Statements of Comprehensive Income (Loss)			4
~~Condensed~~ Consolidated Balance Sheets			5
~~Condensed~~ Consolidated Statements of Shareholders’/Members' Equity			6
~~Condensed~~ Consolidated Statements of Cash Flows			7
Notes to the ~~Condensed~~ Consolidated Financial Statements			9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			2219
Item 3. Quantitative and Qualitative Disclosures About Market ~~Risk.~~Risk			34
Item 4. Controls and Procedures			35
~~Item~~ 4 ~~. Controls and Procedures.~~			35

PART II. OTHER INFORMATION
Item 1. Legal Proceedings			36
Item 1A. Risk Factors			36
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			36
Item 3. Defaults Upon Senior Securities			36
Item 5. Other Information			36
Item 6. Exhibits			37

Signatures			38


(in thousands)	(in thousands)	March 27, 2021		December 26, 2020		(in thousands)	March 30, 2024	December 30, 2023
Series 2018-1 Securitization Senior Notes, Class A-2	Series 2018-1 Securitization Senior Notes, Class A-2	$	266,750	$	267,438
Series 2019-1 Securitization Senior Notes, Class A-2	Series 2019-1 Securitization Senior Notes, Class A-2	293,250		294,000
Series 2019-2 Securitization Senior Notes, Class A-2	Series 2019-2 Securitization Senior Notes, Class A-2	270,875		271,563
Series 2020-1 Securitization Senior Notes, Class A-2	Series 2020-1 Securitization Senior Notes, Class A-2	173,688		174,125
Series 2020-2 Securitization Senior Notes, Class A-2	Series 2020-2 Securitization Senior Notes, Class A-2	448,875		450,000
Car Wash First Lien Term Loan		0		528,858
Car Wash Second Lien Term Loan		0		175,000
Car Wash Revolving Credit Facility		0		18,000
Series 2021-1 Securitization Senior Notes, Class A-2
Series 2022-1 Securitization Senior Notes, Class A-2
Term Loan Facility
Revolving Credit Facility
Other debt (a)	Other debt (a)	25,729		26,763
Total debt	Total debt	1,479,167		2,205,747
Less: unamortized discount		0		(46,030)
Less: debt issuance costs		(33,265)		(34,510)

Less: unamortized debt issuance costs
Less: unamortized debt issuance costs
Less: unamortized debt issuance costs
Less: current portion of long-term debt	Less: current portion of long-term debt	(17,142)		(22,988)
Total long-term debt, net	Total long-term debt, net	$	1,428,760	$	2,102,219


(in thousands, except share and per share amounts)	March 27, 2021 (Unaudited)		December 26, 2020
Assets
Current assets:
Cash and cash equivalents	$	175,371	$	172,611
Restricted cash	10,133		15,827
Accounts and notes receivable, net	104,215		84,805
Inventory	42,913		43,039
Prepaid and other assets	45,697		25,070
Income tax receivable	2,057		3,055
Advertising fund assets, restricted	31,072		29,276
Total current assets	411,458		373,683
Notes receivable, net	3,845		3,828
Property and equipment, net	766,511		827,392
Operating lease right-of-use assets	910,255		884,927
Deferred commissions	9,253		8,661
Intangibles, net	829,406		829,308
Goodwill	1,718,249		1,727,351
Total assets	$	4,648,977	$	4,655,150
Liabilities and shareholders' equity
Current liabilities:
Accounts payable	$	67,229	$	67,802
Accrued expenses and other liabilities	185,707		190,867
Income tax payable	4,388		3,513
Current portion of long term debt	17,142		22,988
Advertising fund liabilities	22,906		20,276
Total current liabilities	297,372		305,446
Long-term debt, net	1,428,760		2,102,219
Deferred tax liability	241,305		249,043
Operating lease liabilities	846,360		818,001
Income tax receivable liability	155,970		0
Deferred revenue	22,350		20,757
Long-term accrued expenses and other liabilities	31,551		53,324
Total liabilities	3,023,668		3,548,790
Common stock, $0.01 par value, 900 million shares authorized at March 27, 2021 and December 26, 2020, respectively; 167 million and 89 million shares issued and outstanding at March 27, 2021 and December 26, 2020, respectively(1)	1,674		565
Additional paid-in capital	1,602,092		1,055,172
Retained earnings	12,036		31,975
Accumulated other comprehensive income	7,443		16,528
Total shareholders’ equity attributable to Driven Brands Holdings Inc.	1,623,245		1,104,240
Non-controlling interests	2,064		2,120
Total shareholders' equity	1,625,309		1,106,360
Total liabilities and shareholders' equity	$	4,648,977	$	4,655,150


in thousands	Common stock		Additional paid-in capital		Retained earnings		Accumulated other comprehensive income (loss)		Non-controlling interests		Total shareholders'/members' equity
Balance as of December 26, 2020	$	565	$	1,055,172	$	31,975	$	16,528	$	2,120	$	1,106,360
Net income (loss)	—		—		(19,939)		—		7		(19,932)
Other comprehensive income (loss)	—		—		—		(9,085)		—		(9,085)
Equity-based compensation expense	—		983		—		—		—		983
Issuance of common stock upon initial public offering, net of underwriting discounts and commissions	1,082		660,418		—		—		—		661,500
Common stock issued upon underwriter's exercise of over-allotment	48		99,177		—		—		—		99,225
Repurchase of common stock	(21)		(42,956)		—		—		—		(42,977)
Exercise of stock options	—		25		—		—		—		25
Establishment of income tax receivable liability	—		(155,970)		—		—		—		(155,970)
IPO fees	—		(14,757)		—		—		—		(14,757)
Other	—		—		—		—		(63)		(63)
Balance at March 27, 2021	$	1,674	$	1,602,092	$	12,036	$	7,443	$	2,064	$	1,625,309

Balance as of December 28, 2019	$	565	$	242,240	$	41,983	$	3,626	$	1,464	$	289,878
Net loss	—		—		(3,848)		—		(99)		(3,947)
Other comprehensive income (loss)	—		—		—		(15,767)		0		(15,767)
Equity-based compensation expense	—		(101)		0		—		—		(101)
Balance at March 28, 2020	$	565	$	242,139	$	38,135	$	(12,141)	$	1,365	$	270,063


Supplemental cash flow disclosures - non-cash items:
Accrued capital expenditures	$	3,804	$	4,283
Supplemental cash flow disclosures - cash paid for:
Interest	$	16,424	$	16,020
Income taxes	1,373		10


	Three months ended March 27, 2021
(in thousands)	Foreign currency translation adjustment		Cash flow hedges		Defined benefit pension plan		Accumulated other comprehensive income
Balance at December 26, 2020	$	16,834	$	(87)	$	(219)	$	16,528
Net change	(9,243)		30		128		(9,085)
Balance at March 27, 2021	$	7,591	$	(57)	$	(91)	$	7,443


	Three months ended March 28, 2020
(in thousands)	Foreign currency translation adjustment		Cash flow hedges		Defined benefit pension plan		Accumulated other comprehensive income (loss)
Balance at December 28, 2019	$	3,626	$	0	$	0	$	3,626
Net change	(15,767)		0		0		(15,767)
Balance at March 28, 2020	$	(12,141)	$	0	$	0	$	(12,141)


		Three months ended March 27, 2021
	Three months ended March 30, 2024																		Three months ended March 30, 2024
(in thousands)	(in thousands)	Maintenance		Car Wash		Paint, Collision & Glass		Platform Services		Corporate and Other		Total		(in thousands)	Maintenance	Car Wash	Paint, Collision & Glass	Platform Services		Corporate and Other	Total
Franchise fees and royalties		$	7,927	$	0	$	17,309	$	5,178	$	0	$	30,414
Franchise royalties and fees
Company-operated store sales	Company-operated store sales	114,067		57,048		11,930		983		(173)		183,855
Independently-operated store sales	Independently-operated store sales	0		56,163		0		0		0		56,163
Advertising		0		0		0		0		17,255		17,255
Supply and other		6,157		1,453		14,652		28,435		(8,964)		41,733
Total revenue		$	128,151	$	114,664	$	43,891	$	34,596	$	8,118	$	329,420
Advertising fund contributions
Supply and other revenue
Total net revenue
Segment Adjusted EBITDA	Segment Adjusted EBITDA	$	40,440	$	34,155	$	17,639	$	11,008	$	(25,019)	$	78,223


	Three Months Ended						2024			2023
(in thousands, unless otherwise noted)	March 30, 2024			April 1, 2023			% Net Revenue For Segment			% Net Revenue For Segment
Company-operated store sales	90,227			102,446			62.3		%	65.3	%
Independently-operated store sales	53,047			52,532			36.7		%	33.4	%
Supply and other revenue	1,448			2,002			1.0		%	1.3	%
Total net revenue	$	144,722		$	156,980		100.0		%	100.0	%
Segment Adjusted EBITDA	$	29,134		$	41,048		20.1		%	26.1	%

System-Wide Sales							Change
Company-operated stores	$	90,227		102,446			$	(12,219)		(11.9)	%
Independently-operated stores	53,047			52,532			515			1.0	%
Total System-Wide Sales	$	143,274		$	154,978		$	(11,704)		(7.6	%)

Store Count (in whole numbers)							Change
Company-operated stores	388			400			(12)			(3.0	%)
Independently-operated stores	718			716			2			0.3	%
Total Store Count	1,106			1,116			(10)			(0.9	%)
Same Store Sales %	(7.4		%)	(11.3		%)


~~(in thousands)~~	Three months ended March 27, 2021
~~Company-operated store sales~~	$	~~57,048~~
~~Independently-operated store sales~~	~~56,163~~
~~Supply and other revenue~~	~~1,453~~
~~Total revenue~~	$	~~114,664~~
~~Segment Adjusted EBITDA~~	$	~~34,155~~

~~System-Wide Sales~~
~~Company-operated stores~~	$	~~57,048~~
~~Independently-operated stores~~	~~56,163~~
~~Total System-Wide Sales~~	$	~~113,211~~
~~Store Count~~
~~Company-operated stores~~	~~220~~
~~Independently-operated stores~~	~~734~~
~~Total Store Count~~	~~954~~


Exhibit Number						Exhibit Description
~~3.1~~						~~Amended and Restated Certificate of Incorporation of Driven Brands Holdings Inc. (incorporated by reference from Exhibit 3.1 to Driven Brands Holdings Inc.’s Form 10-K, filed March 24, 2021).~~




~~3.2~~31.1*						~~Amended and Restated Restated Bylaws of Driven Brands Holdings Inc. (incorporated by reference from Exhibit 3.2 to Driven Brands Holdings Inc.’s Form 10-K, filed March 24, 2021).~~
~~31.1~~						Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes Oxley Act of ~~2002.~~2002
~~31.2~~31.2*						Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes Oxley Act of ~~2002.~~2002
~~32.1~~32.1*						Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002 and 18 U.S.C. Section ~~1350.~~1350
~~32.2~~32.2*						Certification of Chief Financial Officer pursuant to to Section 906 of the Sarbanes Oxley Act of 2002 and 18 U.S.C. Section 1350.
~~101.INS~~101.INS*						XBRL Instance Document
~~101.SCH~~101.SCH*						XBRL Schema Document
~~101.CAL~~101.CAL*						XBRL Calculation Linkbase Document
~~101.DEF~~101.DEF*						XBRL Definition Linkbase Document
~~101.LAB~~101.LAB*						XBRL Label Linkbase Document
~~101.PRE~~101.PRE*						XBRL Presentation Linkbase Document
104						Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
*						Filed herewith.
†						Indicates management contract or compensatory plan.