On October 29, 2026, the Federal Trade Commission, seven state attorneys general, and the people of California sued Toast in federal court. The complaint alleges hidden fees, add-ons restaurants didn't agree to, difficult and expensive cancellations, and support claims that weren't met. Toast denies the allegations and says it will defend itself in court. Nothing has been decided.
Whatever the outcome, the complaint is a useful prompt for every restaurant owner, on any POS. Each issue it raises maps to a term in a contract you can read today.
What is the FTC alleging?
The allegations fall into four themes. These are claims in a complaint, not findings. The details are in the FTC's press release and the full complaint.
Unexpected charges. Restaurants report being enrolled in add-ons like payroll and timekeeping without agreeing to them. The complaint says the $0-a-month Pay-as-you-Go plan carries fees that aren't clearly disclosed, including $85 a month for processing while a restaurant is temporarily closed. It also says that from September 2021 through late July 2023, Toast added a $0.99 fee to certain online orders over $10 without adequate disclosure, and kept the money.
Cancellation terms. The complaint describes an undisclosed early termination fee of $150 for each remaining month of the contract, and a 30-day written notice requirement before renewal that it says wasn't clearly disclosed at signup. Restaurants that don't start processing within 120 days must return the hardware or pay full retail for it.
Financing restrictions. Toast Capital borrowers who cancel or switch providers are treated as in default, so the loan balance comes due immediately.
Support. Toast advertises "24/7/365 support." The complaint describes an owner who called on a Saturday and was told the team that could help wasn't available on the weekend.
Toast's response, per Nation's Restaurant News, is that the FTC "disregarded the information we provided" about how much restaurants negotiate their contracts, and that "nothing about today's news changes our customer service, pricing, or support." Toast has also argued that ROSCA, the subscription law the FTC cites, doesn't apply to business-to-business contracts. The court will decide.
Why does this matter if the case isn't decided?
Because the terms in question aren't unusual. Auto-renewals, termination fees, minimums, hardware clawbacks and bundled add-ons show up across the POS and payments industry.
Most POS decisions are made on the monthly price and the processing rate. The costs that surprise owners usually sit elsewhere: what happens in a slow month, during a temporary closure, or when it's time to leave. Those terms rarely come up on signing day, which is why they're worth checking now.
What should I check in my POS contract?
Pull up your agreement, your last three processing statements and your last three software invoices. Then go through this list.
Is there a term, and does it auto-renew? Find the contract length and whether it renews automatically. If it does, find the notice window. Missing a written notice deadline can mean another full term.
What's the early termination fee, exactly? Look for the formula, not just whether a fee exists. A per-month-remaining fee can add up to thousands early in a long term.
What do you owe while you're closed? Seasonal trucks, renovations, emergencies. Look for monthly minimums or fees that keep billing at zero sales.
Who owns the hardware? If it was "free," find the conditions. Is there a deadline to start processing? Do you have to return it, or pay retail, if you leave?
What's on your invoice that you didn't ask for? Check every line item on your software bill. If you didn't knowingly turn something on, ask to remove it and ask for a credit.
Are your guests paying a fee you don't see? Place an online order from your own site and read the receipt. Every fee on it should be one you chose, and you should know where the money goes.
Is your financing tied to your processor? If a loan or cash advance is repaid from your card sales, find out what happens to the balance if you switch.
When can you actually reach support? Test it. Call during your busiest shift or on a weekend and see who picks up.
If you find something you didn't expect, write down the date and the dollar amount. Whether you negotiate, dispute a charge or switch, you'll want the record.
Should I switch POS systems?
Not necessarily. If you're mid-term with a per-month termination fee, it can cost less to wait for your renewal date and leave cleanly. If you have financing tied to your processor, confirm what switching would trigger before making a decision. And for larger operations with many integrations, switching is a real project. For some restaurants, staying put is the right call. The goal is to make it with the contract in front of you, not to let a renewal date pass by default.
How does Avocado price?
No contract term and no cancellation fee. If you stop selling, you stop paying.
No monthly software fee. Online ordering, KDS, loyalty, SMS and email marketing, gift cards and invoicing are included, so there are no software add-ons to be enrolled in.
One rate per card payment: 5% + 15¢. That's 2.6% + 15¢ card processing plus a 2.4% Avocado fee.
Hardware sold at cost, and you own it. No lease.
If a restaurant covers the whole rate itself, 5% + 15¢ is higher than the posted processing rate on many traditional plans. The restaurant can also choose to have guests cover some or all of it. That's a setting the restaurant controls and can change at any time, and the fee appears in the order total before the guest pays. Card networks and some states restrict surcharges, so check the rules where you operate first. We cover that in Is it legal to add a credit card surcharge?
Optional services are billed separately: LTE connectivity is $30 a month, and a custom website is $150 plus $15 a month. Support is available 7 days a week, 7am to 10pm Central.
Want to see how your current costs compare? Reach out and send us a recent processing statement and software invoice. We'll compare what you pay today with Avocado, including any switching costs you identify.
This post summarizes allegations in a lawsuit that hasn't been decided. Toast denies them. Nothing here is legal advice. If you're disputing a charge or a contract, talk to a lawyer.
