Toast Hit With FTC Lawsuit Over Hidden Fees and Subscription Traps

October 31, 2026 - 00:25

Federal and state regulators have taken legal action against restaurant software provider Toast, accusing the company of deceptive billing practices and trapping customers in costly subscriptions.

The Federal Trade Commission, joined by eight states, filed the lawsuit alleging that Toast misled restaurant owners about the true cost of its point-of-sale and management platform. According to the complaint, the company failed to clearly disclose fees, added unauthorized products and services to customer accounts, and imposed restrictive cancellation terms that made it difficult for businesses to leave.

The lawsuit claims Toast's sales tactics left many small restaurant operators paying for services they never requested and struggling to exit contracts. Regulators argue these practices violated consumer protection laws and harmed businesses that rely on the software to run their daily operations.

Toast has denied the allegations and said it intends to defend its business practices in court. The company maintains that it provides transparent pricing and that its products help restaurants operate more efficiently.

The case adds to growing scrutiny of subscription-based software companies and how they disclose fees and cancellation policies. If successful, the lawsuit could force changes in how Toast markets and bills its services, and it may set a precedent for other technology vendors serving small businesses. Restaurant industry groups say they are watching the case closely because many operators depend on such platforms for payments, payroll, and inventory management.