City Attorney Chiu sues Toast for trapping restaurants in subscriptions riddled with unauthorized fees

San Francisco, CA (October 29, 2026) – San Francisco City Attorney David Chiu announced today that he joined the Federal Trade Commission (FTC) and the Los Angeles County Counsel’s Office in filing a lawsuit against Toast, Inc. for unlawfully charging hidden fees and locking restaurants in subscriptions with unauthorized add-ons. The lawsuit seeks to end Toast’s misleading and deceptive business practices and secure restitution for impacted restaurants in California.

“Mom-and-pop restaurants are already fighting to keep their doors open amid rising inflation and food costs,” said City Attorney Chiu. “Restaurants trusted Toast to simplify operations so they could focus on keeping their kitchens running and customers fed. Instead, Toast trapped restaurants in inflexible subscriptions riddled with hidden fees. San Francisco takes pride in being world-famous for our exceptional restaurants. We’re asking the Court to put an end to Toast’s deceptive practices that harm our restaurant industry.”

“Small businesses are the backbone of communities across the country, and they deserve tools and services that are transparent, reliable and truthful,” said Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection. “Toast promised restaurants ‘$0’ products and ‘24/7/365’ support, but instead imposed hidden fees, unauthorized charges and subscription traps that drained the hard‑earned profits of businesses just trying to serve their customers. These practices are illegal, and the FTC will continue to take aggressive action to ensure a fair, transparent and competitive marketplace.”

“My office is committed to protecting small businesses from unfair, deceptive, and unlawful practices,” said Los Angeles County Counsel Dawyn R. Harrison. “We are happy to partner with the FTC, San Francisco City Attorney, and Attorney Generals from other states in this case and hope this lawsuit sends a message to other businesses that they must comply with all consumer protection laws.”

Background
Toast is a financial technology company that sells point-of-sale (POS) hardware, software, and payment processing services to small businesses in the restaurant industry. Toast is based in Boston, Massachusetts, with a corporate office in San Francisco.

Restaurants in San Francisco and across the country use Toast. They purchase hardware such as register POS terminals, handheld devices used to take orders, and kitchen displays. Then restaurants must purchase the accompanying monthly subscription fee for software that processes orders and payments. On average, restaurants pay over $900 per month for subscription services and other transaction fees.

Toast routinely makes false and deceptive claims about the cost of its services by obscuring fees and charging subscription add-ons without consent. Toast then makes it difficult to modify or cancel subscriptions.

Restaurants can enroll in subscriptions online but cannot cancel online. Instead, they have to call customer support or use Toast’s live chat. Although Toast touts 24/7 customer support, restaurants regularly report receiving no response or reaching representatives who cannot help.

Toast also fails to clearly disclose that canceling a subscription after an initial 120 days triggers an early termination fee of $150 for each remaining month of the contract. For restaurants that use Toast Capital Loans to cover business expenses, canceling their Toast subscription counts as a default and requires immediate repayment of the entire loan.

Toast has a history of deceptive behavior. Between 2021 and 2023, Toast said that its subscriptions would not result in additional fees for restaurant patrons. Yet Toast charged restaurant customers hidden fees when they used the Toast app to purchase takeout meals. Toast eliminated the fee only after facing significant public backlash.

San Francisco, on behalf of the People of the State of California, joins the FTC, Los Angeles County, and the state attorneys general of Colorado, Florida, Illinois, Iowa, Nebraska, Oklahoma, and Utah in the lawsuit. The lawsuit alleges Toast, Inc.’s misleading and deceptive business practices and inflexible cancelation policies violate the California Unfair Competition Law as well as other state and federal laws. The People are seeking penalties, restitution for impacted restaurants, and injunctive relief to ensure additional restaurants are not harmed.

The case is United States of America, et al., v. Toast, Inc. et al., U.S. District Court for the Northern District of California, Case No. 3:26-cv-12705. View a copy of the lawsuit.