Driven Brands Holdings Inc.DRVN
Driven Brands Holdings Inc. Leases Disclosure
Leases
The Company’s lease and sublease portfolio primarily consists of the real property leases related to franchisee and company-operated locations, as well as office space and various vehicle and equipment leases. Leases for real property generally have terms ranging from to 25 years, with most having one or more renewal options ranging from to 10 years. The Company does not include option periods in its determination of the lease term unless renewals are deemed reasonably certain to be exercised. Equipment and vehicle leases generally have terms ranging from to five years. The Company’s portfolio of leases does not contain any material residual value guarantees or restrictive covenants.
The following table details the total investment in operating and finance leases where the Company is the lessee:
(in thousands) | Balance Sheet Location | December 27, 2025 | December 28, 2024 | |||||||||||
| As Restated | ||||||||||||||
| Right-of-use assets | ||||||||||||||
| Finance leases | $ | 24,286 | $ | 18,809 | ||||||||||
| Operating leases | Operating lease right-of-use assets | 513,458 | 451,793 | |||||||||||
| Total right-of-use assets | $ | 537,744 | $ | 470,602 | ||||||||||
| Current lease liabilities | ||||||||||||||
| Finance leases | $ | 6,683 | $ | 5,417 | ||||||||||
| Operating leases | 47,094 | 42,417 | ||||||||||||
| Total current lease liabilities | $ | 53,777 | $ | 47,834 | ||||||||||
| Long-term lease liabilities | ||||||||||||||
| Finance leases | $ | 19,181 | $ | 13,892 | ||||||||||
| Operating leases | Operating lease liabilities | 501,506 | 439,838 | |||||||||||
| Total long-term lease liabilities | $ | 520,687 | $ | 453,730 | ||||||||||
The lease cost for operating and finance leases recognized in the consolidated statements of operations were as follows:
(in thousands) | December 27, 2025 | December 28, 2024 | December 30, 2023 | ||||||||||||||
| As Restated | As Restated | ||||||||||||||||
| Amortization of right-of-use assets | $ | 6,879 | $ | 5,501 | $ | 3,957 | |||||||||||
| Interest on lease liabilities | 1,530 | 1,368 | 811 | ||||||||||||||
| Operating lease expense | 82,578 | 75,544 | 70,077 | ||||||||||||||
| Short-term lease expense | 2,129 | 1,756 | 1,378 | ||||||||||||||
| Variable lease expense | 940 | 956 | 1,515 | ||||||||||||||
| Total lease expense, net | $ | 94,056 | $ | 85,125 | $ | 77,738 | |||||||||||
The Company recorded a $6 million, $1 million, and $63 million impairment loss during the years ended December 27, 2025, December 28, 2024, and December 30, 2023, respectively, related to Company’s decision to exit certain leased locations.
The Company also subleases certain facilities to franchisees and others, which generated $5 million in sublease revenue during each of the years ended December 27, 2025 and December 28, 2024, respectively, and $4 million in sublease revenue during the year ended December 30, 2023, and is included as a component of supply and other revenue on the consolidated statements of operations.
For the year ended December 27, 2025, the Company sold 41 Take 5 properties in various locations throughout the U.S. for a total of $71 million. For the year ended December 28, 2024, the Company sold 34 Take 5 properties in various locations throughout the U.S. for a total of $51 million. For the year ended December 30, 2023, the Company sold 25 Take 5 properties in various locations throughout the U.S. for a total of $39 million. Concurrently with the closing of these sales, the Company entered into various operating lease agreements pursuant to which the Company leased back the properties. These lease agreements have terms typically ranging from 14 to 20 years and provide the Company with the option of extending the lease for up to 20 additional years. The Company does not include option periods in its determination of the lease term unless renewals are deemed reasonably certain to be exercised. The Company recorded an operating lease right-of-use asset and operating lease liability of approximately $55 million and $55 million, respectively, for the year ended December 27, 2025 and $41 million and $41 million, respectively, for the year ended December 28, 2024 related to these lease arrangements. The Company recorded a net loss of $2 million for the year ended December 27, 2025, and net gains of $4 million and $3 million for the years ended December 28, 2024 and December 30, 2023, respectively.
| Year Ended | |||||||||||
| December 27, 2025 | December 28, 2024 | ||||||||||
| As Restated | |||||||||||
| Weighted average remaining lease terms (years) | |||||||||||
| Operating | 11.8 | 11.3 | |||||||||
| Financing | 7.1 | 4.6 | |||||||||
| Weighted average discount rate | |||||||||||
| Operating | 6.35 | % | 6.19 | % | |||||||
| Financing | 6.31 | % | 6.61 | % | |||||||
Supplemental cash flow information related to the lease arrangements were as follows:
| Year Ended | |||||||||||||||||
| (in thousands) | December 27, 2025 | December 28, 2024 | December 30, 2023 | ||||||||||||||
| As Restated | As Restated | ||||||||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||||||||
| Operating cash flows used in operating leases | $ | 79,503 | $ | 72,958 | $ | 62,541 | |||||||||||
| Operating cash flows used in finance leases | 1,530 | 1,368 | 811 | ||||||||||||||
| Financing cash flows used in finance leases | 5,472 | 4,390 | 2,857 | ||||||||||||||
| Right-of-use assets obtained in exchange for lease obligations: | |||||||||||||||||
| Operating leases | $ | 120,100 | $ | 77,176 | $ | 105,176 | |||||||||||
| Finance leases | 13,074 | 6,283 | 5,858 | ||||||||||||||
As of December 27, 2025, future minimum lease payments under noncancellable leases were as follows:
| (in thousands) | Finance | Operating | Income from Subleases | ||||||||||||||
| 2026 | $ | 8,256 | $ | 83,816 | $ | 3,236 | |||||||||||
| 2027 | 7,553 | 79,960 | 2,953 | ||||||||||||||
| 2028 | 3,910 | 73,425 | 2,145 | ||||||||||||||
| 2029 | 2,397 | 68,232 | 865 | ||||||||||||||
| 2030 | 1,052 | 63,355 | 816 | ||||||||||||||
| Thereafter | 10,025 | 444,490 | 1,904 | ||||||||||||||
| Total undiscounted cash flows | $ | 33,193 | $ | 813,278 | $ | 11,919 | |||||||||||
| Less: Present value discount | 7,329 | 264,678 | |||||||||||||||
| Less: Current lease liabilities | 6,683 | 47,094 | |||||||||||||||
| Long-term lease liabilities | $ | 19,181 | $ | 501,506 | |||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | May 19, 2026 | Showing above |
| 2024 | Feb 26, 2025 | |
| 2023 | Feb 28, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Mar 18, 2022 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.