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FTC sues Toast: what it means for independent restaurants
On October 29, 2026, the Federal Trade Commission and eight states sued Toast, the restaurant POS company, alleging hidden fees, add-ons owners never agreed to and contracts that are hard to cancel (FTC, Oct 29, 2026, checked Nov 2026). Toast disputes the claims and says it will fight in court. No court has ruled.
If you are on Toast, you do not need to do anything drastic this week. Read your own contract, line up your last three statements against it, and note your renewal date. If you are shopping for a POS, get the same items in writing from every vendor.
What was filed, by whom, and where
| Item | What the record says |
|---|---|
| Filed | October 29, 2026, in the U.S. District Court for the Northern District of California. FTC commissioners voted 2-0 to file (FTC) |
| Who sued | The FTC, the People of California (through Los Angeles County Counsel and the San Francisco City Attorney), and the attorneys general of Colorado, Florida, Illinois, Iowa, Nebraska, Oklahoma and Utah (FTC) |
| Laws cited | The FTC Act, the Restore Online Shoppers' Confidence Act (ROSCA, a federal law on online subscriptions) and state laws (FTC) |
| What they want | A court order stopping the practices, monetary damages and civil penalties (NRN, Oct 29) |
| Toast's size | Nearly 200,000 locations by its own count and over $6 billion in 2025 revenue, more than 80% of it from payments and loans (NRN) |
Swipe the table sideways to see every column.
What the complaint says Toast did
| Topic | What the FTC alleges | So what for you |
|---|---|---|
| Subscriptions | Auto-renewing plans that average about $900 a month, depending on terminals and add-ons (Restaurant Dive, Oct 30) | Add up your software lines. Ask what each one does. |
| Add-ons | Owners enrolled in and charged for extras such as timekeeping and payroll without agreeing (FTC) | Match every add-on on your bill to something you signed. |
| The $0 plan | "Pay-as-you-Go" advertises $0 for hardware and software, recovered through higher card fees. Owners must start processing within 120 days or return the hardware or pay full retail (FTC) | Compare your card rate with a paid plan. A $0 plan can cost more on real volume. |
| Closed months | $85 a month for payment processing while temporarily closed (FTC) | Know this before a renovation or a seasonal break. |
| Leaving early | An undisclosed fee of $150 for each month left on the contract. One owner was charged $5,318.87 after four years and refused a refund (FTC) | Find the early-termination clause and do the math today. |
| Cancelling | 30 days' written notice of "intent not to renew," not clearly disclosed at sign-up. Some who sent notice say they got no reply and were billed again (FTC) | Put your renewal date on a calendar. Send notice in writing and keep proof. |
| Toast Capital loans | Cancelling or switching counts as default, so the full loan balance comes due (FTC) | If you took a Toast loan, read that agreement before you move. |
| Support | Sold as "24/7/365," but owners struggle to reach anyone who can help. The FTC cites an owner told on a Saturday that the team was off on weekends (FTC) | Test any vendor's support line on a Saturday night before you sign. |
| 99-cent guest fee | $0.99 on some online orders over $10 from September 2021 to late July 2023. It went to Toast, and neither guests nor restaurants were properly told (FTC) | Ended in 2023, per the complaint. Check what fees guests see on your own ordering page. |
Swipe the table sideways to see every column.
These are allegations. Press reports we read do not say whether Toast still charges the $150 monthly termination fee, so check your own agreement (The Next Web).
What Toast says back
- It "strongly" disagrees and is "prepared to defend our business and fight this unprecedented action through litigation" (NRN).
- Its restaurant customers negotiate their contracts, and it says the FTC "disregarded the information we provided" on that (Restaurant Dive).
- No court has applied ROSCA to negotiated business-to-business contracts, and Toast does not believe the law covers them (Restaurant Dive).
- "Nothing about today's news changes our customer service, pricing, or support" (NRN).
Expect this to take a while. A lawsuit does not change your contract today, and nothing in the coverage we read offers refunds to owners yet.
What to do, depending on where you stand
You are on Toast and happy
Stay. Pull your agreement, note the end date and the notice period, and check each add-on line. Fifteen minutes now avoids an auto-renewal surprise later.
You are on Toast and unhappy
Do not cancel in anger. Work out the exit cost first, then time your notice. Our guide to cancelling a POS contract walks through it in order.
You are shopping for a POS
Ask each vendor for the same list in writing: card rate, contract length, renewal terms, termination formula, add-on prices. See Toast alternatives compared.
You are on another POS
The same clauses exist elsewhere. Our POS cost guide shows why card rate and contract decide most of the three-year bill.
We read the bill with you, then work on the POS you keep
AZ takes no commission from any POS vendor. Our proof restaurant in Houston runs on Clover, which you should weigh when you read our view. We work on the system you already have, connect ordering, phones and guest lists to it, and tell you when switching is not worth the exit fee. New AI phone setups run as a hybrid for about three months, with some calls still going to your staff, before they go near hands-free.
Self-serve direct orders went from 17% in mid-August to every direct order today.
app order in the last 60 days was paid before the kitchen cooked it.
guests known by name, with a phone number for nine in ten of them.
From our proof restaurant's own systems, Oct 2026.
Where these facts come from
- FTC: FTC, States Take Action Against Toast Inc. (Oct 29, 2026) - checked Nov 2026
- Nation's Restaurant News: Toast is sued by the FTC (Oct 29, 2026) - checked Nov 2026
- Restaurant Dive: FTC, states sue Toast over fees (Oct 30, 2026) - checked Nov 2026
- The Next Web: FTC and eight states sue Toast - checked Nov 2026
- Fast Casual: FTC, states sue Toast - checked Nov 2026
Questions owners ask
Why is the FTC suing Toast?
The FTC and eight states allege Toast used hidden fees, charged for add-ons owners did not agree to, made false claims about $0 plans and 24/7 support, and made cancelling hard. Toast disputes this and no court has ruled.
Is the Toast lawsuit a class action?
No. It is a government enforcement case filed by the FTC and state officials, not a class action brought by private owners. It asks for a court order, monetary damages and civil penalties.
What is Toast's early termination fee?
The FTC alleges an undisclosed fee of $150 for each month left on a contract, and cites one owner charged $5,318.87. Press reports do not say whether it still applies, so read the termination clause in your own agreement.
Will Toast owners get refunds?
Not yet. The suit asks the court for monetary damages, but no court has ruled and no refund process has been announced in the coverage we read.
Should I leave Toast because of the lawsuit?
The lawsuit alone is not a reason to switch. Decide on your own bill: compare your total monthly cost and exit fee with a written quote from another POS. Our alternatives page lists the published prices.
Where can a restaurant owner report a problem?
The FTC's release points people to ReportFraud.ftc.gov and its Consumer Response Center at 877-382-4357.
Find out what your POS really costs you each month.
We read the bill and contract with you, then fix what is worth fixing.
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