What does the FTC's Toast lawsuit mean for my restaurant?

If your restaurant runs on Toast, the lawsuit the FTC and eight states filed on Oct. 29, 2026, raises practical questions about your contract, your fees and your way out. Here is what the complaint alleges, what Toast says, and what to check in your own account now.

Who is suing Toast, and where?

The FTC and eight states filed one joint case against Toast in federal court in Northern California on Oct. 29, 2026. The case number is 3:26-cv-12705.

The attorneys general of Colorado, Florida, Illinois, Iowa, Nebraska, Oklahoma and Utah joined the FTC's action. California is represented by the Los Angeles County Counsel and the San Francisco City Attorney. San Francisco's announcement is part of the same case, not a second lawsuit. Texas is not one of the plaintiffs.

The FTC voted 2-0 to file. The complaint says Toast customers span 156,000 locations worldwide. It also says "at least tens of thousands of consumers" have complained.

What does the complaint say Toast did to restaurants?

The complaint says Toast charged restaurants fees they didn't expect or approve, and made leaving slow and expensive. These are allegations, and the court hasn't ruled on any of them.

Diners were affected too. From September 2021 through late July 2023, the complaint says, Toast added a $0.99 fee to certain online orders over $10. The FTC says the fee went to Toast, not the restaurant, and the complaint says Toast hasn't refunded it.

One support example in the FTC's announcement involves a weekend. An owner who called on a Saturday was told the team they needed wasn't available on weekends. The FTC says that cost thousands in lost credit card sales.

What does Toast say about the lawsuit?

Toast "strongly disagrees" with the allegations and will defend itself, American Banker reported. The company says it has cooperated with the FTC's review since mid-2025.

Its main legal argument concerns the Restore Online Shoppers' Confidence Act (ROSCA), a 2010 law. "No court has held that ROSCA applies to negotiated business-to-business agreements, and we don't believe it applies here," Toast said.

In a statement reported by Restaurant Dive, Toast said it is "prepared to defend our business and fight this unprecedented action through litigation." The FTC notes that a complaint contains allegations, and the court decides the case.

Does the lawsuit change my Toast contract today?

No. The filing doesn't cancel a contract, waive a fee or order a refund on its own. Those could come only from a court ruling or a settlement.

What the plaintiffs want is broad. The complaint asks for a permanent injunction, monetary relief and civil penalties. The states' laws also allow restitution, refunds, and rescission or reformation of contracts.

Until a court acts, plan around the agreement you signed. That means your renewal date, notice rules and termination terms.

Will my restaurant get money back?

Possibly, but no one can say yet. San Francisco's City Attorney says the case seeks restitution for affected restaurants, along with penalties and an order to stop the practices. The FTC and San Francisco announcements don't put a dollar figure on it.

Keep your records now. Save invoices, statements, emails, chat transcripts and any cancellation notices you sent. If refunds ever flow, those records show what you paid and when.

You can also report problems to the FTC at ReportFraud.ftc.gov, which the agency lists in its announcement.

What should my restaurant check in its Toast account now?

Start with the paperwork, because the complaint says key terms weren't clearly disclosed at sign-up.

1. Find your merchant agreement and order form, and note your term end date. The complaint says subscriptions auto-renew annually or for one- or two-year terms.
2. Put the notice deadline on your calendar. The complaint says written notice not to renew is due at least 30 days before the term ends, and 90 days for payroll.
3. Read the early termination section before deciding anything mid-term.
4. Compare 12 months of invoices with what you ordered, and dispute unknown add-ons in writing.
5. If you have a Toast Capital loan, read its change-of-provider terms before you switch.
6. Talk to a business attorney before you stop paying or cancel early.

This post is general information, not legal advice.

Example: one restaurant's notice dates (hypothetical)

Say a restaurant's Toast term ends March 31, 2027, and it uses Toast payroll. Here is how the deadlines described in the complaint would land.

Real bills can run much higher. The FTC cites a customer charged a $5,318.87 early termination fee after four years of service. Your own agreement, not this example, sets the numbers.

What should I ask before signing my next POS contract?

Get written answers to the questions this case centers on, before you sign anything:

• How long is the term, and how and when do I give notice not to renew?
• How is any early termination fee calculated?
• Do I own the hardware, and will it work with another processor later?
• How are add-ons turned on, and can I turn them off myself?
• What are the support hours, by phone, for payment problems?
• Does a loan or cash advance limit my ability to switch?
• Will my statement itemize interchange, card brand fees and markup?

For more, see our guide to choosing a POS system and a card processor and to card processing for restaurants and bars. If you run MICROS or Aloha, see keeping your POS on a new processor.

When BP Global Merchant Services fits

BP Global is a Dallas-based, independent Elavon Payments MSP that works with restaurants across the U.S. We offer Union POS, built for high-volume bars and restaurants, plus Clover and processing behind existing Oracle MICROS and NCR Aloha installs. Pricing is interchange-plus, with every fee itemized, or dual pricing. To see in writing what you pay now and what you'd pay with us, start with the Free Statement Review.