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The Federal Trade Commission and government attorneys in eight states sued Toast Inc. on October 29, 2026. The complaint accuses the restaurant point of sale and payments company of burying hidden fees in its contracts, signing customers up for subscription add-ons without permission, and making cancellation difficult. The FTC's press release and the agency's case docket lay out the complaint, filed in the U.S. District Court for the Northern District of California.
If your Northeast Ohio restaurant uses Toast, the complaint gives you specific charges and contract terms to review. We have written before about the contract and lease traps hiding behind "free" Toast and Square hardware. This lawsuit does not prove anything yet. It is a set of allegations Toast disputes. The specific numbers in the complaint are worth checking against your own Toast agreement, whether you are a current customer, considering Toast, or trying to understand an increase in your restaurant group's bill.
What the FTC says Toast did
The complaint, brought by the FTC along with the Los Angeles County Counsel, the San Francisco City Attorney, and the attorneys general of Colorado, Florida, Illinois, Iowa, Nebraska, Oklahoma, and Utah, lists several specific practices:
- An undisclosed early termination fee of $150 a month for the remaining length of the contract.
- An $85 monthly payment processing charge billed to restaurants that had temporarily closed.
- A $0.99 fee Toast added to online orders over $10 between September 2021 and July 2023, a charge that went to Toast rather than the restaurant.
- Customers who don't start processing payments within 120 days of signing up must return all their hardware or pay its full retail value.
- Customers were enrolled in paid subscription add-ons they never agreed to.
- A "Pay as you Go" plan advertised as $0 a month that the FTC says carried undisclosed hardware and software costs.
On cancellation, the FTC says Toast requires 30 days' written notice of "intent not to renew," a requirement the complaint says is not clearly disclosed during enrollment. One restaurant named in the complaint was charged $5,318.87 in early termination fees after four years with Toast. The complaint also says canceling a subscription can trigger default on a Toast Capital loan, which forces immediate repayment of the full balance. Advertised "24/7/365" customer support was not actually available on weekends. Some tickets took weeks or months to resolve.
Christopher Mufarrige, director of the FTC's Bureau of Consumer Protection, put it plainly: "Toast failed to honor a number of its promises and instead imposed hidden fees, unauthorized charges and subscription traps that drained the hard earned profits of businesses just trying to serve their customers." The FTC is seeking a permanent injunction, a monetary judgment, and civil penalties.
Toast disputes the allegations. In a statement reported by Payments Dive, the company said it will "vigorously defend" itself. It also said it has cooperated with the FTC's review since mid-2025 and tried to reach a resolution before litigation, and that the FTC "disregarded the information we provided showing the extent to which our restaurant customers negotiate their contracts."
Why this matters for a Northeast Ohio restaurant
Toast disputes the allegations, and the case has not been decided. You can still use the complaint's charge names, dollar amounts and cancellation requirements to review your current agreement and statements.
Check both the fee amount and how often it applies. An $85 monthly fee on a closed location totals $1,020 over 12 months. A $150 monthly early termination fee totals $1,800 for 12 remaining months. Your account history and the time left on your agreement determine which charges, if any, apply to your restaurant. Keep the signed agreement, amendments and itemized charges together before asking your provider to explain a fee.
What to check if you run Toast
If your restaurant runs on Toast, the complaint gives you a checklist, not a verdict:
- Pull your signed Toast agreement and search it for "intent not to renew," "early termination," and "temporarily closed." Note the exact dollar amounts and notice periods.
- Review your last three statements for a recurring processing or service charge on any location that was closed, between seasons, or between owners.
- Check whether your online ordering total matches what customers were actually charged, including any per-order fee layered on top of the menu price.
- If you have already given written notice to cancel, confirm Toast acknowledged it in writing and keep that confirmation.
- Add up everything you paid Toast over the last 12 months and divide by 12. That is your real monthly cost, not the number from the original sales pitch.
What Cloud 9 does instead
Cloud 9 Payments runs on transparent interchange plus pricing with no annual contract and no early termination fee. If you want to see how your current processing and POS costs compare, or whether Clover fits your restaurant better than the system you are on now, send us a recent statement at cloud9payments.com/contact/#form/ or call or text 1-855-297-6722. We will walk through what you are actually paying, line by line.
Figures, dates, and quotes above come from the FTC's October 29, 2026 complaint and press release, current as of November 9, 2026. These are legal allegations, not findings of fact, and Toast disputes them. Nothing here is legal advice.
