Financial Data and Key Metrics Changes - Driven Brands reported a revenue increase of 7% year-over-year, totaling $535.7 million for Q3 2025 [4][16] - Adjusted EBITDA for the quarter was $136 million, reflecting a growth of approximately 4.3 million compared to Q3 2024 [4][16] - The company reduced its net leverage to 3.8 times, down from 4.1 times at the end of Q2 2025, with a target of reaching 3 times by the end of 2026 [4][21][24] - Adjusted diluted EPS from continuing operations increased to $0.34, up $0.11 from the previous year [18] Business Line Data and Key Metrics Changes - Take Five Oil Change achieved a 21st consecutive quarter of same-store sales growth, with a 7% increase in same-store sales and 18% growth in system-wide sales [5][18] - The franchise segment, including brands like Meineke and Maaco, reported a 1% increase in same-store sales, with adjusted EBITDA margins of 66% [8][19] - The international car wash segment saw a 4% increase in same-store sales, but adjusted EBITDA decreased to $15 million due to higher costs [9][20] Market Data and Key Metrics Changes - System-wide sales for Driven Brands grew by 5% year-over-year, totaling $1.6 billion [4][16] - The company added 39 net new stores in Q3, contributing to a total of 167 new stores over the past 12 months [4][15] Company Strategy and Development Direction - Driven Brands remains focused on growth and cash generation, particularly through the Take Five and franchise segments [4][12] - The company plans to open approximately 170 new Take Five locations in 2025, with a commitment to maintain a growth rate of 150 or more new units annually [6][42] - Recent organizational changes were made to strengthen operational leadership, with Mo Khalid appointed as COO and Tim Austin as President of Take Five [10][11] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a dynamic consumer environment with ongoing pressures, particularly in Q4, leading to a more conservative outlook [9][25] - The company expects revenue for the full year to be in the range of $2.1 billion to $2.12 billion, with adjusted EBITDA between $525 million and $535 million [25][26] - Management emphasized the resilience of their diversified portfolio despite macroeconomic uncertainties [9][25] Other Important Information - Free cash flow for Q3 was $51.9 million, driven by strong operating performance [21] - The company has repaid approximately $486 million of debt year-to-date, with a focus on achieving a net leverage of three times by the end of 2026 [24] Q&A Session Summary Question: Can you provide more details on the comps progression and the exit rate for Q3? - Management noted consistent performance in Q3 but acknowledged choppiness in Q4 due to broader consumer environment impacts, with potential for negative comps in Q4 primarily driven by franchise brands [28][30] Question: What are the expectations for unit growth in the coming years? - Management expressed confidence in achieving around 170 new units in 2025 and maintaining a target of 150 or more new Take Five locations annually [38][42] Question: How is the new media mix model expected to benefit brand awareness? - The new media mix model aims to optimize advertising spend across channels and improve return on advertising investment, with expectations for enhanced brand awareness as more locations are established [45][46] Question: How has the labor market affected hiring and retention? - Management did not provide specific details on labor market conditions but indicated ongoing efforts to maintain a strong workforce [76]