FTC Lawsuit Against Toast: What Restaurant Owners Should Check Before Renewing or Switching

Key fact: On October 29, 2026, the Federal Trade Commission and state/local government co-plaintiffs—including Florida's Attorney General—filed a lawsuit against Toast, Inc. and affiliates in the U.S. District Court for the Northern District of California, case 3:26-cv-12705. The case is pending. Allegations in a complaint are not findings by a court.

What the FTC and states allege

These are allegations concerning particular practices and agreements, not a universal schedule of charges for every restaurant. For example, the FTC's description of a $150-per-month remaining-term charge is tied to alleged Pay-as-you-Go arrangements; the terms of other plans may differ. Read the filed complaint, particularly paragraphs 43–45 and 102–109.

Five financial and operational issues to review

1. Your actual cancellation and renewal language

Find the signed merchant agreement, order forms, software subscriptions, renewal dates, notice requirements and any amendments. Ask Toast in writing for a breakdown of all termination charges and the exact steps and deadline needed to prevent renewal. The complaint alleges certain customers faced complicated cancellation processes and unexpected fees; whether that applies to you depends on your own agreement and facts.

2. Monthly subscription and add-on charges

Compare at least three recent invoices and processing statements. Check POS licenses, online ordering, payroll, marketing, loyalty, support, delivery integrations and any services added after signup. Document charges you do not recognize and request an itemized explanation in writing.

3. Inactivity, equipment and financing obligations

Determine who owns each terminal, whether the hardware is leased or provided under program terms, and whether a closure or processing interruption triggers costs. If you have a Toast Capital loan, ask the lender to explain whether ending payment processing or switching POS providers could accelerate repayment. Do not assume your loan can transfer to a new provider.

4. The real cost of downtime and customer support

Review your support agreement and escalation channels. A restaurant evaluating a new system should ask who handles an outage at dinner rush, how replacement devices work, and which features continue functioning if connectivity is interrupted.

5. Migration of restaurant data and integrations

Before changing systems, inventory menus, modifiers, taxes, discounts, tips, gift-card liabilities, open tickets, employees, historical reports, third-party delivery platforms and online ordering. Verify what can be exported or rebuilt. A different POS platform is not automatically a one-for-one replacement for Toast's restaurant-specific features.

What has Toast said?

Toast strongly disputes the allegations and says it will defend the case. Its October 29 statement argues the FTC is seeking to apply the Restore Online Shoppers' Confidence Act (ROSCA) to negotiated business-to-business agreements and contends that the law does not apply in the manner regulators assert. Toast also says the litigation does not change its current service, pricing or support. Read Toast's official response.

Neither the FTC's complaint nor Toast's response should be treated as a final court determination. The case is still pending as of this article's publication.

Before switching from Toast: a practical restaurant checklist

1. Get the documents: signed processing agreement, all POS/software order forms, leases, financing terms, renewal notices and recent statements.
2. Request written numbers: cancellation date, termination fees, hardware return obligations, outstanding loan balances, and any remaining recurring charges.
3. Preserve records: download reports and confirm menus, customer data, gift cards and integrations can be transitioned lawfully and reliably.
4. Compare complete operating costs: card processing, monthly platform and app fees, hardware, service, installation, support and cancellation costs—not just an advertised swipe rate.
5. Validate restaurant workflows: table service, kitchen printers/KDS, tips, online orders, delivery integrations and staff training before choosing a replacement.
6. Plan a controlled cutover: choose a quiet period, test transactions and refunds, and ensure you have a backup plan before deactivating an existing system.

Questions about disputed charges or cancellation?

Write down the date, representative, case number and explanation for each interaction with your provider. Keep copies of the agreement and invoice history. If you believe charges are unauthorized or contractual terms were misrepresented, consider qualified legal counsel or the relevant government consumer-protection office; do not stop payments or close a linked bank account without understanding potential contractual and financing consequences.

Primary sources and further reading

• FTC: Toast case record and status
• FTC: October 29, 2026 federal complaint (PDF, 71 pages)
• FTC: public announcement and summary of claims
• Toast: response disputing the allegations
• Federal court docket listing

Published November 4, 2026. This independent merchant-education article is not affiliated with Toast or the FTC. Allegations are presented as allegations; plan-specific terms vary. Check the court record for later updates.