The Federal Trade Commission (FTC) has decided to exclude restaurant fees from its proposed “junk fees” ban, marking a significant win for the restaurant industry. The decision means that service fees, delivery charges, credit card surcharges, and other common restaurant-related costs will not be subject to the new rule. Had these fees been included, independent restaurant operators could have faced compliance costs amounting to about 10 percent of their total income.
Michelle Korsmo, President & CEO of the National Restaurant Association, expressed satisfaction with the outcome: “The FTC heard us loud and clear. Today’s successful outcome is a direct result of the concerted efforts of thousands of restaurant operators who voiced their concerns to the FTC and lawmakers on Capitol Hill.” She noted that since the pandemic, restaurants have struggled with economic challenges, and this rule could have imposed additional burdens costing operators over $3.5 billion.
In 2023, the FTC introduced a proposal aimed at banning several fees it considered unnecessary. This would have impacted many accepted charges in restaurants such as delivery and large-party service fees.
The National Restaurant Association and its Restaurant Law Center argued in public comments that the FTC lacked legal authority to enforce such regulations on restaurants. Support from 4,600 restaurant operators and advocacy during the 2024 Public Affairs Conference contributed to excluding these fees from the final rule.
Korsmo added: “We are extremely pleased that the FTC recognizes the role restaurants play in our economy and our communities and chose to empower operators to make important business decisions without additional financial burdens.”
