Toast, the U.S.-based restaurant technology and financial services company, is facing a lawsuit from the Federal Trade Commission (FTC) and a coalition of state authorities over allegations that it charged restaurants undisclosed fees, enrolled customers in unwanted services, and made it difficult to cancel subscriptions. The complaint, filed on October 29, 2026, in the U.S. District Court for the Northern District of California, also challenges the company’s claims about round-the-clock customer support. Toast has denied the allegations.
The lawsuit brings together the FTC, the state of California through the Los Angeles County Counsel and San Francisco City Attorney, and the attorneys general of Colorado, Florida, Illinois, Iowa, Nebraska, Oklahoma and Utah. It names Toast and several affiliated entities as defendants. The complaint alleges violations of the Federal Trade Commission Act, the Restore Online Shoppers’ Confidence Act and relevant state laws.
A central part of the case concerns Toast’s Pay-as-you-Go subscription offer, which advertises restaurant hardware and software at no monthly cost in exchange for higher payment-processing fees. According to the FTC, the advertised price does not adequately disclose several conditions and charges. The complaint alleges that restaurants using the offer could face hardware costs if they fail to begin processing payments within 120 days, while businesses that temporarily close may still be charged $85 per month for payment processing. It also alleges that customers canceling their contracts could face an early termination fee of $150 for every remaining month.
The complaint also revisits a controversial 99-cent online ordering fee that Toast charged on certain orders above $10 between September 2021 and July 2023. The FTC alleges that the fee was added without adequate disclosure or consent from either restaurants or their customers, and that the money went to Toast rather than the restaurants. The charge had previously drawn criticism from restaurant operators before the company discontinued it in 2023.
Another area of concern is the alleged enrolment of restaurants in add-on services without their consent. The complaint says customers reported being charged for products such as employee timekeeping, payroll processing, and payroll tax filing that they had not authorized. It further alleges that cancellation required multiple interactions with different Toast teams, written notice and, in some cases, unexpected termination charges. One customer cited in the complaint allegedly received a $5,318.87 early termination bill after canceling an account. The FTC has also challenged Toast’s customer support claims. The company advertises 24/7/365 assistance, but the lawsuit alleges that restaurant operators frequently struggled to reach staff capable of resolving technical or operational problems. The complaint includes accounts of customers waiting weeks or months for responses and businesses unable to obtain support during critical operating periods.
Toast said it remains committed to helping restaurants operate more effectively and increase sales. In a statement reported by Nation’s Restaurant News, the company said: “Nothing about today’s news changes our customer service, pricing, or support.” The lawsuit represents allegations that will be tested in court; no finding of liability has been made.
