A wonderful restaurant owner retired recently, and now the restaurant is empty. Why didn't he/she/they convert their business to an employee-owned business, so that customers can continue to eat their wonderful food and the original owner could keep a toe in the business?

They might have had a reason, or they might not have been aware it was possible. These businesses are called Employee Owned companies (often set up as ESOPs).

Business owners thinking about succession can find out more about ESOPs from this article provided by Tools for Business Success.  Go to https://GSCC.toolsforbusiness.info/illinois/2b/needtoknow/employeeowned/ to learn more!