I've lived in Manhattan for years and this is the first time I've heard of this restaurant. It certainly isn't known for the food because I can probably name the top 20 restaurants in the city off the top of my head. Sounds like it's a scam for tourists.
Which, of course, sucks. It's not a typical New York thing, for sure. Don't know why these guys are still in business because crap like this will get you annihilated in Manhattan.