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I'm on the side of the small business owner here, but for some perspective on why restaurant businesses have to go though hell to get set up in SF, search Yelp for "9th avenue burger king". The short version is that people in the neighborhoods go insane if businesses (particularly restaurants, and especially chains) set up in their area.

People still line up to start restaurants in SF.

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I'm not much of a free-marketeer, but if enough people "in the neighborhoods" want to eat at a burger king such that it would be economically viable, why should other people be allowed to prevent them from doing that?

Because in this case the burger king was located in the lower floor of a two-story residential building and caused air pollution and litter in the neighborhood.

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