In most systems that do this, my 1 star review is countered by another 1 star review.

I had a contractor fail to do the simplest possible task (write a XML layout for a login screen). Gave him a 1 star. He threatened to give me a 1 star too if I didn't change the review, and did so as promised.

However, I have seen owners explain that certain reviews were part of a targeted attack to damage the owner's reputation, so I think it's the fairest approach.

Does this really fix the problem?

1. This would be at a tertiary level. Customers would need to dig quite deep to even get to the response. The average number rating isn't impacted and it's the primary signal a customer is evaluating.

2. An honest response from a business owner can feel distasteful, even if it's earned. This is even worse for franchise owners because it feels like a big corporation is responding this way.

This is the answer. A good review system will allow owner comments on each review, even ones without text. Google Maps is quite good in this - even if the place has lower rating, if the owner comments sensibly on each negative review, that's a huge plus.