The Toast FTC lawsuit raises questions restaurant owners should understand about point-of-sale pricing, recurring subscriptions, customer support, and cancellation.
On October 29, 2026, the Federal Trade Commission and state and local government partners sued Toast and related entities in federal court in Northern California. The FTC’s case page lists the matter as pending as of November 9, 2026.
Toast disputes the allegations and says it will defend the case. The lawsuit has not established that the company violated the law.
For restaurant owners, the practical starting point is understanding what regulators allege—and what questions to ask about your own software and payment agreements.
Why Is the FTC Suing Toast?
According to the FTC’s announcement, the lawsuit challenges several aspects of Toast’s advertising, billing, and subscription practices.
The allegations concern:
Whether advertised “$0” hardware and software offers adequately disclosed associated costs and conditions.
Whether customers authorized certain paid subscription add-ons.
Whether Toast delivered the customer support it advertised.
Whether customers had a sufficiently simple way to stop recurring charges.
Whether cancellation involved unexpected costs or continued billing.
These are allegations being contested in court. They should not be read as a finding that every Toast customer experienced these issues.
What About the $0.99 Online-Order Fee?
The complaint also addresses a historical $0.99 fee charged on certain online orders above $10.
Regulators allege that Toast imposed the fee without adequate disclosure or consent and retained the proceeds. The filed complaint says Toast rolled back this particular fee in late July 2023.
That timing matters: the fee is part of the historical conduct challenged in the lawsuit, rather than a newly announced 2026 charge.
How Has Toast Responded?
In its October 29 response, Toast rejected the allegations and said it would vigorously defend the company.
A central part of its response concerns the Restore Online Shoppers’ Confidence Act, commonly called ROSCA. Toast disputes the FTC’s effort to apply that law to its negotiated agreements with restaurant customers.
The company argues that this application would disrupt commercial contracting. Toast also said the lawsuit announcement did not change its pricing, customer service, or support.
Both the government’s allegations and Toast’s position are relevant to understanding the dispute. The court will determine which claims succeed.
Why Does a Restaurant POS Lawsuit Involve Subscription Law?
Restaurant technology often operates through software as a service, or SaaS: software provided through an ongoing subscription.
A restaurant might subscribe to its core POS software and additional tools for online ordering, employee management, marketing, or other functions.
ROSCA addresses certain online transactions involving negative-option billing. In general, that means an arrangement in which charges continue unless the customer takes action to stop them.
The statute addresses three core requirements:
Disclosing material transaction terms before obtaining billing information.
Obtaining informed consent before charging.
Providing a simple mechanism to stop recurring charges.
Whether ROSCA applies to the negotiated business arrangements challenged in the Toast case is disputed. The lawsuit has not established a final answer for every B2B SaaS agreement.
What Restaurant Owners Should Review in SaaS and Payment Contracts
An integrated restaurant platform can offer meaningful benefits. Having ordering, payments, reporting, and employee tools in one environment may simplify daily operations.
The purchasing decision should also account for the complete cost, contractual commitment, support arrangements, and work involved in changing systems.
At Align Ecommerce, our commercial takeaway is straightforward: evaluate the entire technology and payment relationship before making a decision.
These questions can help with that review, whether you use Toast or another provider.
1. What Does the Software Subscription Include?
Identify which functions are included in the base subscription and which require additional charges.
Ask about:
Additional terminals and handheld devices.
Kitchen display systems.
Online ordering.
Loyalty and gift card programs.
Payroll and employee management.
Marketing tools.
Third-party integrations.
Also establish who on your team can activate paid services and where those approvals are recorded.
The goal is to connect each recurring charge to a feature your business understands and has authorized.
2. How Long Is the Contract?
A monthly invoice does not, by itself, establish a month-to-month agreement.
Review the committed term separately from the billing schedule. Record the start date, renewal date, notice deadline, and any early-termination calculation.
Ask what happens when you add another location, device, or service. Establish whether the change affects an existing commitment or creates a separate one.
Keep these dates alongside the pricing proposal so the commitment receives the same attention as the monthly cost.
3. What Is the Total Cost at Your Sales Volume?
Compare proposals using the same assumptions:
Monthly card volume.
Transaction count and average ticket.
In-person and online sales mix.
Number of locations and devices.
Required software features.
Installation and training needs.
Consider this hypothetical example.
One proposal offers software that costs $100 less per month, but its processing percentage is 0.10 percentage points higher.
At $150,000 in monthly card sales, that processing difference equals $150 per month. It exceeds the software reduction by $50 before accounting for other charges.
This is a comparison example, not a statement about Toast’s pricing. It illustrates why the advertised software price alone cannot establish the lower overall cost.
4. What Does Customer Support Cover?
Support availability is one part of the evaluation. The ability to resolve the specific problem also matters.
Ask who handles:
A payment interruption during dinner service.
A kitchen printer or device problem.
A deposit or reconciliation question.
An unfamiliar subscription charge.
A cancellation or account change.
Request an explanation of how unresolved issues are escalated and which teams can authorize corrections.
A useful support commitment explains both how to reach someone and how an issue moves toward resolution.
5. What Happens to Financing If You Change Providers?
A restaurant using financing should review that agreement before making a processing change.
The Illinois Attorney General’s announcement describes the complaint’s allegation that leaving Toast or switching providers can trigger immediate repayment of outstanding Toast Capital financing.
The consequences for an individual restaurant depend on its actual financing documents and circumstances.
Ask the lender or servicer to explain any repayment, default, or processing-related conditions in writing. Keep financing payoff amounts separate from software termination charges when evaluating the cost of a change.
6. How Would Your Data and Operations Move?
Before committing to a platform—or deciding to leave one—establish how the restaurant would retrieve essential records and maintain operations.
Consider sales reports, menus, modifiers, gift card balances, payroll records, customer information, and accounting integrations.
A downloadable report does not necessarily mean another platform can import the information.
Also confirm whether a proposed payment processor supports the software and hardware you intend to use. Request written confirmation of compatibility before building a transition plan around it.
Should Restaurants Leave Toast Because of the Lawsuit?
That decision should reflect the restaurant’s experience, requirements, and agreements.
If the platform works well, the charges are understood, and support meets the business’s needs, the lawsuit can be a reason to organize records and review renewal dates.
If there are unexplained charges or unresolved problems, document the specific issues and request written answers.
A potential move should account for contractual obligations, financing, equipment, staff training, integrations, and the transition budget.
Questions to Ask About Your Restaurant’s Payment Setup
Whether you use Toast or another provider, a clear understanding of your account starts with five questions:
Can I explain every recurring charge?
Can I identify the agreement or authorization behind each paid service?
Do I know my renewal and notice dates?
Do I understand what changing providers would cost?
Have I confirmed how essential records and functions would move?
If you want a second perspective on the payment side of your restaurant’s setup, contact Align Ecommerce to discuss your requirements and the questions to resolve before considering a change.
This article provides general business education, not legal advice. A qualified attorney can assess a specific agreement, disputed charge, or cancellation right.
Frequently Asked Questions
Toast FTC Lawsuit: Restaurant Owner FAQs
Answers about the allegations, Toast's response, and questions restaurant owners can consider when reviewing software and payment agreements.
Why is the FTC suing Toast?
Regulators allege misleading pricing and support claims, unauthorized charges, and obstacles to subscription cancellation. Toast disputes the allegations, which have not been established as violations by the court.
Has Toast been found liable in the FTC lawsuit?
The FTC's case page listed the matter as pending on November 9, 2026. A complaint contains allegations, not findings of liability.
What is Toast's response to the lawsuit?
Toast disputes the allegations and says it will defend the case. The company also argues that ROSCA does not apply to its negotiated business agreements with restaurant customers.
Is the $0.99 Toast online-order fee a new 2026 charge?
No. The complaint discusses a historical fee on certain online orders above $10 and says Toast rolled it back in late July 2023. It is not described here as a new 2026 charge.
What is ROSCA, and why is it part of the Toast lawsuit?
ROSCA is the Restore Online Shoppers' Confidence Act. It addresses certain online subscription transactions, including disclosure, consent, and stopping recurring charges. Its application to the business agreements challenged in this case is disputed.
Does the lawsuit cancel my Toast contract or guarantee a refund?
Do not treat the lawsuit filing as cancellation confirmation, a fee waiver, or a refund promise. Review your agreement and obtain account-specific legal advice about any disputed obligation.
What should restaurant owners review in POS and SaaS agreements?
Review software and processing costs, add-on authorizations, contract duration, renewal and notice dates, cancellation terms, support, financing, and data exports. Compare the complete operating and transition costs before deciding whether to stay or change providers.
Information checked November 9, 2026. This article summarizes public allegations and Toast's response. Allegations are not court findings. Information may change as the case progresses.
Sources: FTC case page; filed complaint; Toast's response; ROSCA statutory text.
General business information only, not legal advice. A qualified attorney can assess your agreement, disputed charges, or cancellation rights.