As federal regulators take aim at one of the largest restaurant technology companies in America, a bigger question emerges: Is the restaurant POS industry still working for restaurants, or are restaurants increasingly working for their technology providers?
October 31, 2026 | Flyght Insights | Restaurant Technology
Running a restaurant has never been particularly easy.
Between rising food costs, labor challenges, shrinking margins, and customers who have grown accustomed to ordering dinner from their phones, restaurant operators have enough to worry about without wondering whether their technology provider is quietly becoming another expense they can't control.
Yet that's precisely the concern raised by a new federal lawsuit against Toast, one of the country's largest restaurant point-of-sale (POS) providers.
On October 29, 2026, the Federal Trade Commission, joined by seven state attorneys general and California local government officials, filed a lawsuit against Toast alleging hidden and unauthorized charges, misleading subscription practices, inadequate customer support, and barriers that make it unnecessarily difficult for restaurants to cancel their services.
The allegations are serious. But what's arguably more important is that they don't appear in isolation.
Looking at Toast's history, particularly since becoming a publicly traded company in 2021, reveals a series of decisions that raise important questions about the future of restaurant technology.
And while Toast is the company currently in the spotlight, the underlying issues extend far beyond one POS provider.
First, What Is Toast Actually Accused Of?
According to the FTC's October 29 announcement, the lawsuit alleges several troubling practices:
- Unauthorized subscriptions and add-ons. Restaurants allegedly discovered charges for products and services they hadn't knowingly approved.
- Hidden fees. Some advertised low-cost or $0 software and hardware offerings allegedly came with financial obligations that weren't adequately disclosed.
- Difficult cancellations. Restaurants allegedly encountered confusing procedures, unexpected early termination charges, and continuing bills after attempting to cancel.
- Financing that complicates switching providers. Restaurants using Toast Capital loans could allegedly face immediate repayment of their outstanding balances if they canceled Toast services.
- Misleading support promises. Although Toast advertised around-the-clock customer support, the FTC alleges restaurants sometimes couldn't reach personnel capable of resolving their problems when they needed help.
One particularly striking example involves early termination fees. The FTC alleges that some restaurants were subject to charges of $150 for every month remaining on their contracts, while one restaurant operator reportedly faced a termination charge exceeding $5,300.
Think about that for a moment.
A restaurant might be unhappy with its technology, dissatisfied with support, or struggling financially, yet face thousands of dollars in additional costs simply to move to another provider.
For an industry where a few percentage points can determine whether a business survives, these aren't insignificant amounts.
Importantly, these remain allegations in an ongoing lawsuit, not judicial findings. Toast disputes the government's claims and has stated that it intends to vigorously defend itself.
But even before a court determines what happened, the complaint highlights a broader issue restaurant owners should understand.
The more of your business a technology provider controls, the more expensive it can become to challenge that provider's decisions.
A Pattern Worth Examining: Toast Before and After Its IPO
Toast went public in September 2021, raising approximately $1 billion through its initial public offering.
That milestone changed its relationship with investors, introducing the expectations, financial reporting requirements, and market pressures that come with being publicly traded.
There's nothing inherently wrong with that. Public companies can produce excellent technology, innovate rapidly, and serve customers extraordinarily well.
But there is an important distinction between growing a business by continuously earning customer loyalty and growing revenue by making each existing customer more financially valuable.
The difference deserves attention.
2021–2023: The 99-Cent Online Ordering Controversy
One of the clearest examples emerged in 2023.
Toast introduced a $0.99 processing fee on certain online orders, charged directly to restaurant customers rather than to the restaurants themselves.
The fee was especially controversial because restaurants had already invested in Toast's online-ordering platform, and many operators objected to their technology provider introducing an additional charge into their customer relationships.
Imagine operating a neighborhood restaurant where you've spent years establishing trust with customers, managing menu prices, and protecting your reputation.
Then your technology provider adds another fee to an online order.
The customer sees a higher bill. Your restaurant gets the frustration. The technology company collects the additional money.
That's a pretty uncomfortable arrangement.
Following widespread criticism, Toast announced on July 19, 2023, that it would remove the fee.
In its own public statement, Toast acknowledged:
“We made the wrong decision.”
That admission mattered. But it also exposed a larger concern.
A technology provider had demonstrated that it could monetize a restaurant's customer transaction without the restaurant having meaningful control over the decision.
The company reversed course following customer backlash, but the underlying technical and commercial ability to impose such fees remains an important issue for operators to consider.
Source: Toast's July 19, 2023 announcement.
2023–2026: The Expansion of the Restaurant Technology Ecosystem
Over the following years, Toast continued expanding its restaurant technology platform.
POS systems were no longer simply about ringing up sales and printing kitchen tickets.
The broader platform now encompasses online ordering, payroll, labor management, inventory, loyalty, payment processing, and financing.
On the surface, this sounds terrific.
Restaurants are understandably tired of managing a dozen different vendors that blame one another whenever something breaks.
An integrated platform can make operations dramatically easier.
But there's a difference between integration and dependency.
When one technology company supplies nearly every critical business function, replacing that company becomes far more complicated.
A restaurant may need to consider not just replacing its POS, but also migrating customer information, rebuilding online ordering, changing payment processing, moving payroll, retraining employees, replacing hardware, and potentially addressing outstanding financing obligations.
Integration creates convenience.
Dependency creates leverage.
The question becomes whether that leverage is being used to improve the customer's experience or strengthen the vendor's negotiating position.
2026: The Financial Incentive Is Impossible to Ignore
Toast's own financial filings provide useful context.
According to its 2025 annual report, Toast generated approximately $6.15 billion in total revenue.
Of that amount:
- Approximately $5.04 billion came from financial technology solutions.
- Approximately $936 million came from subscription services.
- Approximately $180 million came from hardware and professional services.
In other words, roughly 82% of Toast's reported 2025 revenue came from financial technology solutions, a category heavily associated with payment processing.
Revenue isn't the same as profit, and a significant portion of payment-processing revenue covers associated costs. Nevertheless, the numbers demonstrate just how central financial services have become to Toast's business model.
Toast also reported approximately 164,000 restaurant locations at the end of 2025 and annualized recurring revenue exceeding $2 billion.
These are substantial achievements.
They're also an illustration of why the financial relationship between restaurants and their technology providers deserves more scrutiny.
When a business generates enormous recurring revenue from subscriptions and payment transactions, retaining existing restaurants and expanding the products they purchase become important economic drivers.
That doesn't establish wrongdoing.
But it does create an incentive structure worth understanding.
A restaurant owner wants technology that delivers the best operational value. A publicly traded technology company must also deliver financial results to its shareholders. Those objectives can align, but they won't always.
Sources: Toast 2025 Annual Report and Toast Investor Relations.
What the FTC Lawsuit Reveals About the POS Industry
This lawsuit isn't just about whether a company properly disclosed a fee or made a subscription too difficult to cancel.
It's about who holds the power in the relationship between restaurants and technology providers.
And that relationship has changed dramatically.
Historically, many restaurant operators purchased POS equipment, licensed software, selected a payment processor, and hired a technology partner to support the system.
That model certainly had problems. Systems didn't always integrate well, updates could be painful, and troubleshooting sometimes turned into a spectacular game of vendor finger-pointing.
Modern cloud POS systems solved many of those frustrations.
But in doing so, the industry increasingly shifted toward subscription-based platforms where the technology provider controls more of the restaurant's operations.
A well-designed integrated platform is a tremendous asset.
A platform that makes leaving expensive, complicated, or operationally dangerous is something else entirely.
And that's where we believe the restaurant industry is approaching an important crossroads.
Our Prediction: Restaurant Technology Is Entering an Era of Greater Scrutiny
At Flyght, we believe the next several years will bring meaningful changes in how restaurants evaluate, purchase, and manage technology.
Not necessarily because every POS provider will engage in the practices alleged in the Toast lawsuit, but because restaurant operators are beginning to recognize the economic consequences of vendor dependency.
Here's what we expect.
1. More Restaurants Will Demand Transparency Into Their Total Technology Costs
For years, POS purchasing decisions have often focused on the advertised monthly software price.
But that number can be misleading.
The real cost of restaurant technology includes software subscriptions, payment-processing fees, online ordering, labor and payroll products, loyalty programs, hardware, implementation, support, and contractual obligations.
A POS system advertised at a low monthly rate can become expensive when those additional costs are included.
We expect operators to become increasingly sophisticated about evaluating the entire financial relationship rather than simply comparing monthly subscription prices.
And frankly, it's about time.
A restaurant wouldn't evaluate its food costs by looking at the price of lettuce while ignoring the rest of the inventory.
Technology deserves the same financial discipline.
2. Vendor Lock-In Will Become a Much Bigger Part of the Buying Decision
Restaurants have historically asked whether a POS system has the features they need.
Going forward, we believe more operators will ask another important question:
What happens if we want to leave?
Can the restaurant export its transaction history, customer information, and product data?
Does the hardware work with another platform?
Can it change payment processors?
Will outstanding financing obligations become due?
Are there termination fees, automatic renewals, or other contractual restrictions?
These questions should be answered before signing a contract, not after discovering that the relationship no longer works.
The best technology partners shouldn't need complicated exit barriers to retain their customers.
They should earn that relationship through performance.
3. Payment Processing Will Face Greater Financial Scrutiny
Payment processing has become deeply embedded in the economics of modern restaurant POS platforms.
That's understandable. Processing fees create recurring revenue tied directly to a restaurant's transaction volume.
But it also means restaurants should be particularly careful about how processing rates are presented, how they can change, and what flexibility exists to renegotiate terms.
Consider a restaurant processing $2 million in card transactions annually.
A difference of just 0.25 percentage points in its effective processing rate represents $5,000 per year.
Across five locations, that's $25,000 annually.
The difference between competitive and uncompetitive processing arrangements can easily outweigh the advertised cost of POS software.
We expect restaurants to place greater emphasis on understanding their actual effective processing rates, examining statements, and comparing the economics of bundled and alternative processing arrangements.
4. Support Quality Will Matter More Than Marketing Promises
The FTC's allegations about customer support deserve particular attention.
A restaurant doesn't operate on a convenient Monday-through-Friday schedule.
A POS failure at 7:30 p.m. on a Saturday isn't a minor inconvenience. It can affect service, payment acceptance, staff productivity, and the guest experience.
Claiming to offer 24/7 support is one thing.
Having qualified people available who can actually resolve critical issues is another.
We believe restaurants will increasingly distinguish between access to a support channel and access to effective technical support.
Those are not the same product.
As systems become more interconnected, support accountability will become an even more important competitive differentiator.
5. Regulators May Push the Industry Toward Fairer Contracts and Clearer Disclosures
The FTC's action could have implications beyond Toast.
If regulators successfully challenge certain subscription, disclosure, or cancellation practices, other restaurant technology companies may review their own agreements and business processes.
However, this outcome isn't guaranteed.
Toast disputes the FTC's legal theories, including whether the Restore Online Shoppers' Confidence Act applies to the business-to-business contracts at issue.
The courts will ultimately determine which claims succeed.
Even so, the lawsuit has created a very public examination of practices that restaurant operators may have previously considered unavoidable.
We believe that scrutiny alone could encourage better disclosure, simpler cancellation procedures, and greater accountability across the POS industry.
There's Nothing Wrong With a Technology Company Making Money
It's worth being clear about something.
Toast has developed a capable restaurant technology platform, and its growth demonstrates that many restaurants find value in its products.
There's nothing inherently wrong with a POS provider bundling products, earning payment-processing revenue, or offering financing.
And there's certainly nothing wrong with being publicly traded.
The issue arises when a technology company's financial incentives begin pulling against the interests of the restaurants it serves.
Restaurants should be able to understand what they're paying, approve what they're buying, receive the support they were promised, and make informed decisions about whether to continue a relationship.
Those shouldn't be controversial expectations.
They're fundamental characteristics of a healthy business partnership.
What Restaurants Should Be Doing Right Now
Whether you're using Toast, another major POS platform, or a combination of different restaurant technologies, this is an excellent opportunity to evaluate the relationship.
Start by reviewing five things:
- Your actual technology costs. Examine every subscription, processing statement, transaction fee, and recurring charge.
- Your agreements. Understand your renewal dates, termination requirements, minimum commitments, and any financing arrangements.
- Your support arrangements. Know exactly who is responsible when a critical system fails and whether qualified assistance is available during your operating hours.
- Your data and equipment. Determine what you own, what you can export, and what would need replacing if you switched platforms.
- Your long-term flexibility. Understand whether adding another service today makes changing providers substantially more expensive tomorrow.
Most importantly, don't assume that an integrated platform automatically creates a better financial or operational outcome.
Convenience is valuable, but it shouldn't come at the expense of transparency or control.
The Flyght Perspective: Technology Should Serve the Restaurant, Not the Other Way Around
At Flyght, we believe restaurants deserve technology partners who understand the business they're supporting.
That means looking beyond a single POS terminal or a processing rate.
A restaurant's technology environment includes its POS, payment processing, network infrastructure, internet connectivity, phones, online ordering, back-office systems, security, and support.
All of those pieces need to work together.
And when something doesn't work, the restaurant needs someone who takes responsibility for fixing it rather than sending the operator through a maze of different departments and vendors.
That's the philosophy behind Flyght.
We help restaurants design, implement, manage, and support their technology as a connected operation, with clear accountability and a focus on long-term business value.
But here's an equally important principle: No technology partner, including Flyght, should expect to retain a customer simply because leaving is difficult.
Customer relationships should be built on transparency, competence, fair economics, and trust.
Ultimately, that's what we believe the POS industry needs more of.
The Bottom Line
The FTC's lawsuit against Toast is still pending, and the courts will determine whether the company's conduct violated the law.
But the bigger lesson doesn't require waiting for a verdict.
Restaurant technology has evolved from a collection of operational tools into an increasingly consolidated set of platforms that control significant portions of a restaurant's business.
That creates extraordinary opportunities for efficiency and innovation.
It also introduces new risks around pricing, transparency, competition, and vendor dependency.
As publicly traded technology companies pursue growth and stronger financial performance, restaurant operators should be increasingly vigilant about where their interests align with those of their providers and where they don't.
Our prediction is that the next major competitive battleground in restaurant technology won't be just about features, artificial intelligence, or better-looking terminals.
It will be about trust, transparency, accountability, and the freedom to make decisions that are best for the restaurant.
And the companies that embrace those principles rather than resist them will be better positioned to earn the restaurant industry's business.
Because at the end of the day, your POS provider shouldn't have more control over your restaurant than you do.
Concerned about what your restaurant is actually paying for technology?
Flyght helps restaurant operators evaluate their POS, payment processing, networks, software, and support arrangements to identify unnecessary costs, operational risks, and opportunities for improvement.
Whether you're considering a new POS system or simply want an independent assessment of your current setup, we're here to help you understand your options.
Flyght | One Partner. All Your Technology.
419-724-3115 | whatisflyght.com
Sources and Further Reading
- Federal Trade Commission: Toast, Inc. Case 252-3101, October 29, 2026.
- FTC: Hidden and Unauthorized Fees, Subscription and Cancellation Practices, October 29, 2026.
- Toast's Response to the FTC Lawsuit, October 29, 2026.
- Toast: Update on Digital Ordering Fees, July 19, 2023.
- Toast 2025 Annual Report, SEC Form 10-K, February 2026.
