The idea is that $120 of pizza doesnt’ actually cost the restaurant 20% more than $100 of pizza. It’s 20% retail price of foods that likely cost less than half that. He can pay with sweat equity rather than cash. (But yes, he would hope or regulate that the discount be used on pizza rather than soda, where his markup may be less or fixed.)
Plus, he’s getting the multiplier effect of a community of patrons who now have a stake in the restaurant.