Illinois Attorney General Kwame Raoul has joined the Federal Trade Commission and a coalition of states in a bipartisan lawsuit against Toast Inc., alleging the restaurant software and financial-technology company saddles restaurants with hidden fees and unauthorized charges, fails to deliver promised customer support and makes it difficult to cancel its services.
Toast markets and sells point-of-sale hardware and software and payment-processing services to small businesses in the restaurant industry. Its cloud-based products are used to take and manage orders, accept payments and track inventory. The company sells its software through annual or biennial subscriptions, billed monthly, and also markets financing products called Toast Capital loans to existing customers.
"Our lawsuit alleges that Toast took advantage of small business owners by charging hidden fees and automatically signing them up and charging for add-ons that they didn't want," Raoul said. "The company also failed to provide the customer service it promised and made it unnecessarily confusing and difficult to cancel subscriptions. I remain committed to working with my colleagues and federal partners to hold companies accountable when they break the law."
Christopher Mufarrige, director of the FTC's Bureau of Consumer Protection, said small businesses "deserve tools and services that are transparent, reliable and truthful." He said Toast "imposed hidden fees, unauthorized charges and subscription traps that drained the hard-earned profits of businesses just trying to serve their customers," calling the practices illegal.
What the complaint alleges
According to the complaint, restaurants must enroll in auto-renewing subscriptions that average around $900 per month, depending on the number of terminals and add-on services bundled in. Add-ons include employee timekeeping, payroll processing and filing of payroll taxes. Customers frequently complain they were enrolled in and charged for add-ons without their consent, the complaint says.
The complaint alleges Toast advertises a "pay-as-you-go" plan in which customers pay higher per-transaction fees while getting hardware and software for $0 per month, but then deceives customers by imposing various undisclosed fees. For example, clients who fail to start processing payments within 120 days of purchasing their subscription must return all hardware or pay its full retail value.
The complaint also alleges Toast unilaterally charged restaurant patrons a $0.99 fee without adequate disclosure or consent from patrons or restaurants. From September 2021 through late July 2023, Toast added the fee to certain online orders above $10 placed through its platform. The fee went to Toast, not the restaurants, on top of fees the restaurants were already paying.
Cancellation and loans
The lawsuit alleges Toast failed to provide a simple cancellation process, instead using a multi-step process requiring coordination of multiple internal teams and leaving many customers to incur months or years of unwanted charges. In some cases, Toast charged high, unexpected early-termination fees. One consumer complained of being charged a $5,318.87 early-termination fee after canceling an account of four years, according to the complaint.
Cancellation is even more costly for customers with balances on a Toast Capital loan, the complaint alleges. If customers cancel or change providers, Toast treats it as a loan default and requires immediate repayment of the total outstanding amount, forcing customers to choose between paying unwanted subscription charges or facing accelerated loan charges plus any early-termination fees.
Customer support claims
Raoul and the coalition also allege Toast does not live up to its promises on customer service. Nearly every page of Toast's website highlights a claim that customers can get help 24 hours a day, seven days a week, and Toast lists "24/7/365 support" as a feature in each subscription package, the complaint says. In reality, the complaint alleges, consumers have difficulty reaching anyone who can help at any time of day.
The complaint notes one consumer called support on a Saturday only to be told the team that could help was not available, costing the business owner thousands of dollars in credit card transactions. Other consumers report spending weeks to months trying to resolve issues, often with no follow-up.
The complaint alleges Toast's conduct violates the FTC Act, the Restore Online Shoppers' Confidence Act and Illinois consumer protection laws. Joining Raoul and the FTC are the people of the state of California, through the Los Angeles County Counsel and San Francisco City Attorney, and the attorneys general of Colorado, Florida, Iowa, Nebraska, Oklahoma and Utah.
Background
Toast, Inc. is a cloud-based restaurant management software company based in Boston, according to its Wikipedia profile, which lists the company as publicly traded on the New York Stock Exchange under the ticker TOST and reports 2025 revenue of about $6.15 billion.