The FTC's fee rule, in effect since May 12, 2025, covers live-event tickets and short-term lodging, not restaurants. State rules differ. California allows restaurant mandatory fees if they are clearly and conspicuously displayed, with an explanation of their purpose, wherever prices are shown. Massachusetts guidance (from September 2, 2025) and Minnesota's FAQ (law in effect from January 1, 2025) expect mandatory fees inside the total price, with large-party service charges or automatic gratuities disclosed instead. Colorado's law took effect on January 1, 2026. This guide is general information, not legal advice.
Why this matters for your website
Menus on your website are a place where prices are shown. If you add a mandatory service charge, kitchen fee or wellness surcharge, the rules in your state may decide whether that charge must be built into menu prices or shown in a particular way. A website that shows menu prices without the fee, when the law requires otherwise, can put the restaurant at risk.
The federal rule does not cover restaurants
In January 2025 the FTC published its "Trade Regulation Rule on Unfair or Deceptive Fees" (16 CFR Part 464), effective May 12, 2025 [1]. The final rule addresses fees for live-event tickets and short-term lodging [1]. In the rule's discussion, the FTC said it would not address issues raised by other industries, including restaurants, that fall outside the scope of the final rule, and that it could still use its existing Section 5 authority against unfair or deceptive practices elsewhere [1].
So there is no federal rule specific to restaurant fees, but general federal law on deceptive practices still applies, and several states have acted on their own. The four covered below have laws or official guidance aimed at restaurants.
California
California's Honest Pricing Law (SB 478) applies from July 1, 2024 [2]. It was amended by SB 1524, which created an exemption for restaurants, bars and certain other food vendors. The Attorney General's page says mandatory fees charged by restaurants, bars and other select food vendors are exempted "so long as the fee is clearly and conspicuously displayed wherever prices are shown" [2].
A July 2024 summary by Greenberg Traurig, which we cite as a secondary source, quotes the bill: the fee must be "clearly and conspicuously displayed, with an explanation of its purpose," on "any advertisement, menu, or other display that contains the price of the food or beverage item" [3]. The same summary points to California's definition of clear and conspicuous text as "a larger type than the surrounding text, or in a contrasting type, font, or color" [3].
Because the rule follows the price wherever it appears, on a restaurant website this usually means the fee and its purpose sit on the online menu and on every ordering page, in type that stands out, rather than only on the bill. Greenberg Traurig notes that the law does not spell out exactly what compliance looks like on each display [3], so confirm your wording with counsel.
Massachusetts
Massachusetts consumer protection regulations on junk fees (940 CMR 38) took effect on September 2, 2025 [4]. The Attorney General's tips for restaurants say "all fees must be incorporated into the total price of a product wherever prices are displayed on menus and bills" [4]. According to the same tips:
- mandatory service charges for waitstaff serving large parties are permitted, and the charge and its conditions should be shown clearly on the menu, for example a stated percentage for parties above a set size;
- taxes do not have to be included in menu prices but must be disclosed on the bill;
- delivery platforms may show menu prices as total prices but must clearly display the maximum mandatory delivery fee [4].
On a Massachusetts restaurant website, the Attorney General's guidance points to menu prices that already include any mandatory fee, plus a clear note on the menu page about any large-party service charge.
Minnesota
Minnesota's price transparency law took effect on January 1, 2025. The Attorney General's FAQ (revised April 2025) says a restaurant's mandatory fee "must be included in the total price advertised, displayed, or offered to consumers by the restaurant" [5]. Restaurants can still charge and itemize such fees, but the advertised total has to include them [5].
The FAQ treats some charges differently:
| Charge | Minnesota treatment, per the AG FAQ |
|---|---|
| Mandatory fee (for example a kitchen or wellness fee) | Must be included in the advertised total price [5] |
| Automatic gratuity | Does not need to be included in the advertised total, but must be disclosed clearly and conspicuously [5] |
| Card surcharge a guest can avoid by paying cash | Not a mandatory fee, so it does not need to be in the total price, though other consumer laws still apply [5] |
| Third-party delivery fees | Delivery platforms must clearly display any flat fee or percentage charged for delivery [5] |
Read together, the FAQ's answers suggest that on a Minnesota restaurant website, menu prices shown online include any mandatory fee, and any automatic gratuity policy is stated clearly near the menu or booking information.
Colorado
Colorado's HB25-1090 targets drip pricing and took effect on January 1, 2026. A January 2026 summary by the law firm Clark Hill, which we cite as a secondary source, says the law requires a total price that includes costs that are not reasonably avoidable, and that it does not ban restaurant service charges or automatic gratuities but changes how they must be disclosed [6]. According to the same summary:
- disclosures should state the charge's purpose and how it is distributed;
- vague wording such as "service charge may apply" will no longer be enough;
- the disclosure should appear where guests see prices, including menus and websites, before they order;
- the Colorado Attorney General's office was expected to complete rulemaking during 2026 [6].
Because rulemaking may change the details, Colorado restaurants should check the Attorney General's current guidance and talk to counsel before finalizing menu wording.
Other states and cities
Fee rules are changing, and other states or cities may have rules of their own. Before adding a fee, check with your state Attorney General's consumer protection office and your local authorities.
How to show fees honestly on a website
Whatever your state requires, these practices keep fees clear:
- Decide the policy first. Is the charge mandatory, optional or a gratuity? The answer changes how it must be shown.
- Put it where prices are. A fee notice belongs at the top of each menu and on ordering pages, not only in a terms page.
- Say what it is for. Plain words such as "A 3% kitchen fee is added to every check and paid to our kitchen staff" are clearer than "fees may apply." (That example is illustrative; use your actual policy.)
- Match every channel. The website, printed menus, ordering platforms and receipts should all say the same thing.
- Review when the law changes. Set a reminder to check your state's guidance once a year.
Frequently asked questions
Does the FTC junk fee rule apply to restaurants?
No. The final rule covers live-event tickets and short-term lodging. The FTC said other industries, including restaurants, fall outside its scope, though general federal law on deceptive practices still applies.
Can a California restaurant still charge a service fee?
The California Attorney General's page says restaurant mandatory fees are exempted if clearly and conspicuously displayed wherever prices are shown, and SB 1524, as summarized by Greenberg Traurig, adds that the fee's purpose must be explained on menus and other displays that show prices.
Do automatic gratuities count as mandatory fees in Minnesota?
The Minnesota Attorney General's FAQ says automatic gratuities do not need to be included in the advertised total but must be disclosed clearly and conspicuously.
Do Massachusetts menus have to include fees in prices?
The Massachusetts Attorney General's tips for restaurants say all fees must be incorporated into the total price wherever prices are displayed on menus and bills, with large-party service charges shown clearly on the menu.
Where on the website should a fee notice go?
At the top of each menu and on any ordering or booking page where prices appear, written in plain words.
Sources
Checked on October 29, 2026.
- Federal Register (via GovInfo), Trade Regulation Rule on Unfair or Deceptive Fees. Published January 10, 2025; effective May 12, 2025. Primary source
- California Department of Justice, Office of the Attorney General, SB 478 - Hidden Fees. Primary source
- Greenberg Traurig, California 'Junk Fee' Bill SB 1524 Becomes Law: What It Means for Restaurants. July 2, 2024. Secondary source
- Massachusetts Attorney General's Office, Junk Fees Regulations Tips for Restaurants. Regulations at 940 CMR 38, in effect from September 2, 2025. Primary source
- Minnesota Attorney General's Office, Frequently Asked Questions About Minnesota's New Price Transparency Law. Revised April 2025. Primary source
- Clark Hill, What is Colorado's "Junk Fee" Ban? Compliance Checklist For Hotels, Restaurants & Hospitality Businesses (HB 25-1090). January 20, 2026. Secondary source
