The most important machine in a San Diego restaurant is no longer the oven. It is the cash register, and the Federal Trade Commission now says the company behind that register built it into a trap.
In a 71 page complaint filed October 29, 2026 in the U.S. District Court for the Northern District of California (Case No. 3:26-cv-12705), the FTC and eight states accuse Toast Inc. and five affiliated companies, including Toast Capital LLC and Toast Processing Services LLC, of burying restaurants in hidden fees, signing them up for add-ons they never asked for, and making it so hard to quit that some kept paying for services they had already told the company to turn off.
California is a plaintiff, suing through Los Angeles County Counsel Dawyn R. Harrison and San Francisco City Attorney David Chiu under the state's Unfair Competition Law and False Advertising Law, and the state is asking for restitution for impacted restaurants in California. These are allegations, not findings. The case is pending, and Toast says it will fight.
"Mom-and-pop restaurants are already fighting to keep their doors open amid rising inflation and food costs," City Attorney Chiu said in announcing the suit. "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." The FTC's consumer protection chief, Christopher Mufarrige, put it harder: Toast "imposed hidden fees, unauthorized charges and subscription traps that drained the hard-earned profits of businesses just trying to serve their customers."
No San Diego restaurant is named in the complaint. What makes this a San Diego story is the sheer number of local dining rooms wired into the system now sitting in front of a federal judge. The Boston based company runs point of sale, payments, online ordering, payroll and business loans at nearly 200,000 business locations nationwide, and in San Diego it is not on the margins. It is in the middle of the scene.
"Mom-and-pop restaurants are already fighting to keep their doors open amid rising inflation and food costs," City Attorney Chiu said in announcing the suit. "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." The FTC's consumer protection chief, Christopher Mufarrige, put it harder: Toast "imposed hidden fees, unauthorized charges and subscription traps that drained the hard-earned profits of businesses just trying to serve their customers."
No San Diego restaurant is named in the complaint. What makes this a San Diego story is the sheer number of local dining rooms wired into the system now sitting in front of a federal judge. The Boston based company runs point of sale, payments, online ordering, payroll and business loans at nearly 200,000 business locations nationwide, and in San Diego it is not on the margins. It is in the middle of the scene.
Job postings for Good Time Design, Ty Hauter's group behind Moonshine Beach in Pacific Beach, Moonshine Flats and The Blind Burro in the East Village and Bub's at the Ballpark, require knowledge of the Toast POS system. Toast's own list of the most-booked restaurants in San Diego through its Toast Tables platform includes two spots from Verant Group, barleymash and The Smoking Gun in the Gaslamp, plus Coronado Brewing Company, Postino, URBN, Lucha Libre Taco Shop, Curryosity, Aladdin Cafe, Little Sakana and Hillcrest's Common Stock.
Downtown based RMD Group, the company behind Rustic Root, Huntress and Lumi, hires managers to run its "POS (Toast) system." Cali BBQ in Spring Valley calls Toast its "primary technology partner." Richard Walker's Pancake House takes online orders through Toast in Downtown, La Jolla, Del Mar and Carlsbad. Chef Brad Wise's Trust Restaurant in Hillcrest and his steakhouse Rare Society take online orders through Toast, Cafe Coyote has fed Old Town tourists through a Toast ordering page for years,
Little Italy's Coco Maya and Allegro order through Toast, Bottlecraft switched its bottle shops to Toast Retail and told the company it is "so intuitive," and Novo Brazil Brewing in Mission Valley has been linked to Toast's card pre-authorization system in this site's own reporting. None of these businesses is accused of anything. They are the installed base, and the installed base is enormous.
And if a San Diego operator now wants to find the local boss of the company holding their register, their payroll and possibly their loan, the public record offers a maze instead of a name. Toast does not publicly name a San Diego market chief, and it lists no San Diego office. Its own locations run to Boston headquarters and offices in places like San Francisco and Costa Mesa, while San Diego is worked by field salespeople out of home offices. Toast's own job postings show the county carved into districts, including a San Diego North district, whose managers hire and coach teams of Territory Account Executives and report up to a Regional Vice President whose name the postings do not give.
And if a San Diego operator now wants to find the local boss of the company holding their register, their payroll and possibly their loan, the public record offers a maze instead of a name. Toast does not publicly name a San Diego market chief, and it lists no San Diego office. Its own locations run to Boston headquarters and offices in places like San Francisco and Costa Mesa, while San Diego is worked by field salespeople out of home offices. Toast's own job postings show the county carved into districts, including a San Diego North district, whose managers hire and coach teams of Territory Account Executives and report up to a Regional Vice President whose name the postings do not give.
The alleged trap, as regulators describe it, starts at sign-up. Restaurants are locked into auto-renewing subscriptions running one or two years, starting at about $90 per location per month and averaging around $900 a month once terminals and add-ons are bundled in. The add-ons are where the complaint gets ugly. Regulators allege customers were frequently enrolled in, and charged for, extras without their consent, including employee timekeeping, payroll processing, payroll tax filing, Toast Kiosk at $100 per device per month and Kitchen Display Systems at $35 per device per month. When customers caught the charges and asked for a service to be shut off, one internal Toast account quoted in the complaint says the quiet part out loud: customers "request to turn it off, and then we keep billing them for Email Marketing for months."
Then there is the plan advertised at $0 a month. Regulators allege Toast's "Pay-as-you-Go" pitch hid the real bill in the fine print. Restaurants that did not start processing payments within 120 days had to return all hardware or pay its full retail price. Restaurants that closed temporarily, for a remodel, a fire, a flood, still owed $85 a month. And restaurants that tried to leave early owed an undisclosed $150 for every month left on the contract. One customer was charged a $5,318.87 early termination fee after cancelling an account held for four years, and the complaint says Toast refused to refund it.
San Diego diners allegedly got clipped too, 99 cents at a time. From September 2021 through late July 2023, the complaint says, Toast charged patrons a $0.99 "Order Processing Fee" on certain online orders over $10, and the money went to Toast, not the restaurant. The fee was buried inside a line labeled "Taxes & Fees," and the little explanation pop-up said it was "set by Toast to help provide affordable digital ordering services for local restaurants," without ever saying Toast pocketed it.
Then there is the plan advertised at $0 a month. Regulators allege Toast's "Pay-as-you-Go" pitch hid the real bill in the fine print. Restaurants that did not start processing payments within 120 days had to return all hardware or pay its full retail price. Restaurants that closed temporarily, for a remodel, a fire, a flood, still owed $85 a month. And restaurants that tried to leave early owed an undisclosed $150 for every month left on the contract. One customer was charged a $5,318.87 early termination fee after cancelling an account held for four years, and the complaint says Toast refused to refund it.
San Diego diners allegedly got clipped too, 99 cents at a time. From September 2021 through late July 2023, the complaint says, Toast charged patrons a $0.99 "Order Processing Fee" on certain online orders over $10, and the money went to Toast, not the restaurant. The fee was buried inside a line labeled "Taxes & Fees," and the little explanation pop-up said it was "set by Toast to help provide affordable digital ordering services for local restaurants," without ever saying Toast pocketed it.
Restaurants could not opt out. Customers blamed the restaurants. Toast killed the fee in late July 2023 after a public backlash, but regulators allege it never refunded what it collected. How much it collected is redacted in the public complaint, blacked out in the government's own filing. Anyone who ordered takeout online from a Toast powered San Diego restaurant in that window likely paid a fee to a Boston tech company that the menu never mentioned.
Quitting, regulators say, is the hardest part of all. A restaurant can sign up for Toast online in minutes, but the complaint alleges it cannot cancel online. Buried in Section 8.1, on page 11 of a 25 page merchant agreement, is a requirement to give 30 days' written notice of an "intent not to renew." Customers who sent notice say they heard nothing back while the charges continued. Those who got through to support were worked over with scripted "probing questions" and retention pitches, then transferred to an internal cancellation desk the complaint calls the "churn line," a number that is not publicly listed and is staffed only on weekdays, 9 a.m. to 5 p.m. Eastern, by a company that advertises "24/7/365" support.
Quitting, regulators say, is the hardest part of all. A restaurant can sign up for Toast online in minutes, but the complaint alleges it cannot cancel online. Buried in Section 8.1, on page 11 of a 25 page merchant agreement, is a requirement to give 30 days' written notice of an "intent not to renew." Customers who sent notice say they heard nothing back while the charges continued. Those who got through to support were worked over with scripted "probing questions" and retention pitches, then transferred to an internal cancellation desk the complaint calls the "churn line," a number that is not publicly listed and is staffed only on weekdays, 9 a.m. to 5 p.m. Eastern, by a company that advertises "24/7/365" support.
One owner who called on a Saturday was allegedly told the team he needed did not work weekends, and lost thousands of dollars in card transactions. And for restaurants carrying a Toast Capital loan, the complaint alleges the trap snaps fully shut: cancel or switch processors and you are in default, and the entire loan balance comes due at once. Regulators say at least tens of thousands of customers have complained to the FTC, online or directly to Toast.
Toast denies the case. The company says it "strongly disagrees" with the allegations and will "vigorously defend" itself, that it cooperated with the FTC's review since mid-2025 and tried to settle short of litigation, and that the federal subscription law at the center of the case, the Restore Online Shoppers' Confidence Act, has never been applied by any court to contracts negotiated between businesses. "Nothing about today's news changes our customer service, pricing, or support," the company said. The FTC's vote to file was 2-0.
So the fight now lands in a San Francisco courtroom, but the registers are here. They are on the bar at Moonshine Flats, on the counter at Cali BBQ, in the dining room at Barleymash, and in hundreds of smaller San Diego rooms whose owners signed the same merchant agreement described in the complaint.
Toast denies the case. The company says it "strongly disagrees" with the allegations and will "vigorously defend" itself, that it cooperated with the FTC's review since mid-2025 and tried to settle short of litigation, and that the federal subscription law at the center of the case, the Restore Online Shoppers' Confidence Act, has never been applied by any court to contracts negotiated between businesses. "Nothing about today's news changes our customer service, pricing, or support," the company said. The FTC's vote to file was 2-0.
So the fight now lands in a San Francisco courtroom, but the registers are here. They are on the bar at Moonshine Flats, on the counter at Cali BBQ, in the dining room at Barleymash, and in hundreds of smaller San Diego rooms whose owners signed the same merchant agreement described in the complaint.
Until a judge rules, the regulators' advice is the only defense the complaint leaves them: know your renewal date, know your notice window, know your exit fee, and know whether your loan is chained to your register, because the federal government is now alleging that every one of those fine print terms was a feature, not a bug.
Originally published on October 30, 2026.
Originally published on October 30, 2026.
