Toast Sued by FTC For Misleading Customers on Subscriptions

The U.S. Federal Trade Commission and a group of eight states sued Toast Inc., alleging the restaurant management and financial technology company falsely told customers they could try its products for free before enrolling them in a subscription that was difficult to cancel.

Toast, which had 156,000 customers and $6.1 billion in revenue last year, violated federal and state consumer protection laws, according to the suit filed Thursday in California federal court. The company bills itself as a “one-stop shop” for restaurants, helping manage inventory, take orders and accept payments.

In a statement, Toast said it will fight the suit, arguing the FTC improperly used a 2010 law governing certain online subscription practices to target the company’s commercial agreements with restaurant customers. “No court has held that” the Restore Online Shoppers’ Confidence Act “applies to negotiated business-to-business agreements, and we don’t believe it applies here,” Toast said.

The company had claimed it offered 24/7 customer support, but instead provided minimal customer service, the FTC alleged. Toast also began charging a 99-cent order-processing fee to consumers that placed digital orders above $10 in 2023, in addition to the payment processing fees paid by the restaurant, without clearly disclosing that money would be paid to the company and not the restaurant, according to the complaint.

The FTC also alleged that Toast made it difficult for restaurants and small businesses to cancel their subscriptions, requiring at least 30 days notice and not offering an online cancellation option. The complaint also alleges Toast violated ROSCA, which requires companies to clearly and conspicuously disclose all material terms before charging consumers on an ongoing basis.

Top photo: In this photo illustration, a person holds a smartphone displaying the logo of Toast Inc. (NYSE: TOST), an American cloud-based restaurant software company, with the company’s distinctive orange toast-shaped icon visible in the background, on July 31, 2025 in Chongqing, China. Bloomberg.