ADW Capital Management Urges Driven Brands to Undertake Strategic Review
ADW Capital Management, which owns approximately 2.5% of the common stock of Driven Brands, issued an open letter to the company's board of directors and controlling shareholder Roark Capital Group regarding opportunities to maximize value for all shareholders and urging the company to undertake a strategic review process. The letter said, ".. Our conclusion is straightforward: Driven Brands is materially undervalued not because of external pressures, but due to self-inflicted structural, capital allocation, and governance failures. We believe that the recent accounting failures, while perhaps small in nature, are a feature of a greater disease. Roark Capital Group, the Company's controlling shareholder, appears to be distracted in trying to fix / grow its larger restaurant platforms to get them public for a limited partner base starved of "DPI" and Driven Brands has caught the brunt of this neglect. Simply put, the current trajectory is untenable and immediate and decisive action is required... We urge the Board to announce a strategic review and engage independent advisors, increase transparency, reduce overhead, and evaluate governance changes. We know Roark Capital is focused on much larger assets in in its private portfolio but why should minority shareholders suffer at Driven Brands? The Company and its Board have a fiduciary duty to all shareholders as well as its limited partners of the private funds where these shares sit. Driven Brands has valuable assets, but the Company is simply not on a path to realizing that value. The Company must pursue decisive action to unlock this massive disconnect in shareholder value."
