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“Management Shake-Up at Toast Inc. Following Controversial Fee Program”

Toast Inc., a prominent Big Tech restaurant vendor, has announced a significant change in its senior management just weeks after facing widespread backlash for introducing new fees on diners without their consent. The move drew sharp criticism from industry experts, with some likening it to infamous financial swindles.

Toast’s CEO, Chris Comparato, is set to step down on January 1, with co-founder and COO Aman Narang taking the helm, according to the company’s recent release. Comparato has held the CEO position since 2015.

The controversy surrounding Toast erupted earlier this year when it accessed the point-of-sale systems and bank accounts of its restaurant clients, adding a 99-cent fee to customers’ tabs for online orders exceeding $10. Notably, these fees were charged directly to diners rather than the 85,000 restaurant clients.

Critics argued that diners had not agreed to do business with Toast and were likely unaware of the vendor’s involvement. The move sparked comparisons to notorious financial schemes, such as Bernie Madoff’s.

Toast’s financial performance also raised eyebrows, as the company reported a loss of $275 million on revenue of $2.7 billion in 2022, prompting experts to question the motives behind the controversial fees.

Ann Skeet, senior director of leadership ethics at Santa Clara University’s Markkula Center for Applied Ethics, characterized the fee program as a “fundamental breach of ethical leadership practice.”

Despite stepping down as CEO, Comparato will remain on the company’s board of directors. Mark Hawkins, former president and CFO of Salesforce, is set to become the chairman of Toast’s board on January 1.

The decision to change leadership follows a nationwide outcry from Toast clients and the threat of a congressional investigation. Diners found themselves subject to fees imposed remotely by Toast, which appeared on checks as charges by the restaurant. However, the funds were then transferred to Toast’s accounts.

While Toast rescinded the fees on July 19, it left a trail of mistrust among restaurant clients. Matt Wilhelmson, owner of Koehn Bakery in Missouri, expressed his lack of trust in Toast as a business partner, echoing the sentiments of many restaurateurs.

Experts highlighted that Toast’s attempt to charge fees to the customers of its clients, without the consent of either party, was unprecedented and ethically questionable. Unlike traditional digital vendor fees, which involve a direct relationship between the vendor and the customer using the service, Toast’s approach disrupted established business dynamics.

Despite the controversy, Toast’s point-of-sale product has been lauded for its technological capabilities, customization options, and record-keeping features. While some restaurant owners explored alternatives in the wake of the fee debacle, many found it challenging to switch vendors due to the cost and disruption associated with such a transition.

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