I worked in restaurants for years and this is the correct answer. I also die a little inside at how many posts say to pay servers a living wage but then balk at the idea of paying extra for the meal. Where else would the money come from??! As you said, if they raise menu prices, their competition will undercut and do this. It would also affect takeout prices where tips are usually lower. People hate tipping and want a magic solution where waiters make more but also nobody’s charged more.