It's not just jacking up prices; it's about keeping competition down to reasonable levels. If you have the world's best restaurant that everyone needs to eat at, then great; but most restaurants are going to be in the middling end of the scale, where they're vulnerable to having "too much" competition. If you serve decent Mexican food, then your revenue will be damaged by every "decent Mexican place" that opens in your vicinity.
Don't get me wrong; there's plenty of room for "decent Mexican places," but if too many of them open, then they might all end up with not enough customers to survive. Limiting the number of restaurants means that there will be enough customers for most of them.
"It's not just jacking up prices; it's about keeping competition down to reasonable levels.
Limiting the number of restaurants means that there will be enough customers for most of them."
There's no such thing as 'keeping competition down to reasonable levels.' That's why we have a market. The optimal supply of restaurants and customers should be determined by the market, not government or protectionist incumbents. Unless you can make a legitimate case that allowing more food trucks, restaurants, or whatever else harms the health or security of society, there is zero reason to limit their numbers.
"Don't get me wrong; there's plenty of room for "decent Mexican places," but if too many of them open, then they might all end up with not enough customers to survive. Limiting the number of restaurants means that there will be enough customers for most of them."
Too bad. That's not the business of government, its the effect of market. They may all go out of business if people stop liking Mexican. Government shouldn't be picking winners that's the people's business.
If you generalize this system, it creates a relatively small class of people allowed to own businesses, unwilling or incapable of hiring all the other ones as staff. If business owners plus their employees plus the regulators themselves constitute 51% of the population, it would even be democratically stable, while 49% of the population would have zilch.
Don't get me wrong; there's plenty of room for "decent Mexican places," but if too many of them open, then they might all end up with not enough customers to survive. Limiting the number of restaurants means that there will be enough customers for most of them.