The Federal Trade Commission (FTC) and eight states have filed a lawsuit against Toast Inc. alleging the restaurant software company charges restaurants hidden and unauthorized fees and unwanted add-ons; fails to deliver on its customer support promises; and makes it difficult to cancel its services.
The complaint argues that Toast’s conduct has violated the FTC Act, the Restore Online Shoppers’ Confidence Act and various state laws.
Toast has denied the charges and vowed to defend itself.
The states of Colorado, Florida, Illinois, Iowa, Nebraska, Oklahoma and Utah and county counsels from Los Angeles and San Francisco, California, joined the FTC in filing suit.
Toast sells point-of-sale hardware and software and payment processing services to small restaurants. Toast’s subscription cloud-based service takes orders, accepts payments and tracks inventory. Restaurants pay an average of $900 per month depending on the number of terminals used and add-on services.
Toast customers allege that they have been charged for subscription add-ons such as employee timekeeping, payroll processing and filing of payroll taxes without their consent, according to the complaint.
The FTC and states also accuse Toast of deceiving restaurants by imposing various fees on the cost of its hardware and software as part of a “Pay-as-you-Go” plan.
According to the complaint, Toast has also unilaterally charged some restaurant patrons a $0.99 fee without adequate disclosure or consent.
Toast is additionally accused of failing to provide customers with a simple cancellation process. Instead, as alleged in the complaint, Toast has a multi-step cancellation process that has caused some customers to incur months or years of unwanted charges. Some customers have complained about early termination fees of $150 per month for each remaining month of their contract, according to the complaint. In one case, this fee ran more than $5,000.
Although Toast promises “24/7/365” customer support, the complaint cites cases where no help was available and it took months to resolve issues, sometimes costing restaurants credit card payments.
“Toast failed to honor a number of its promises and instead imposed hidden fees, unauthorized charges and subscription traps that drained the hard‑earned profits of businesses just trying to serve their customers,” Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection. “These practices are illegal, and the FTC will continue to take aggressive action to ensure a fair, transparent and competitive marketplace.”
Toast has disputed the allegations and said it will “vigorously defend” itself against the claims.
According to Toast, the lawsuit seeks to wrongly apply the Restore Online Shoppers’ Confidence Act (ROSCA) to the commercial agreements it negotiates with its restaurant customers when the law was passed to address certain online subscription practices.
“No court has held that ROSCA applies to negotiated business-to-business agreements, and we don’t believe it applies here,” Toast said in its statement.
The company said it has been cooperating fully with the FTC’s review of this matter since mid-2025 and has engaged in good faith throughout, including efforts to reach a resolution short of litigation.
The complaint was filed in the U.S. District Court for the Northern District of California.
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