Totally. We’re definitely lucky over here. From my talks with people in restaurant industry in NA, it’s just extremely expensive to start a business, on top of the regulatory restrictions that you’ve mentioned. And obviously the holy grail of money making - liquor. I can get beer in almost every random ramen shop near me. It takes months/years of approval to open a place with a liquor license in Vancouver, Canada. Margins on alcohol are huge, that gives breathing room to little margins places make from food.
I haven’t been outside Japan for nearly a decade so I can’t compare it with other countries, but my impression is that Japan has more small restaurants than some other places. It’s not unusual to go into a ramen, curry, gyoza, soba, or other eating place with fewer than a dozen seats and staffed by just one or two people.
The existence of such small places increases the eating-out options. I don’t know why such small food businesses are viable here but not elsewhere; perhaps regulatory frameworks (accessibility, fire, health, tax, labor, etc.) play a role.