I really didn't know this was going on and I'll add to Gary's post that I beleive the vast majority of places don't pay. How does it get to the writers? Who knows what songs your playing so which writer gets a fee ? All impossible questions and I agree with Russ, just a gangster type shakedown. Sort of like the Miusicians Union years ago. Pay your dues and what do you get---nothing.
The place I mentioned doesn't even advertise it's restaurant no less music. They do very well without any ads. Its small and off the beaten path but quality will work every time.
Did someone drop a dime on them? Again, another place gone from the music scene.