"Ads may use the trademark in ad text if they meet the following requirements:
"Resellers: The ad's landing page is primarily dedicated to selling (or clearly facilitating the sale of) products or services, components, replacement parts, or compatible products or services corresponding to the trademark. The landing page must clearly provide a way to purchase the products or services or display commercial information about them, such as rates or prices."
If I were a delivery service, I would argue that my business operates as a reseller of the restaurant's offerings and that my use of the trademark is permitted per this clause of the policy.
Hopefully it's a violation and can be fixed on Google's side, since I find that to be the worst part of all this.
Door dash seem to be very good at getting large chains onboard, I wonder if this is part of it. Most small restaurants last less than a year, with this kind of strategy door dash can show large chains a nice dashboard every year of how much in sales they redirected from a small restaurant to their chain.
It is not only allowed, but common, to bid on the name of a competitor. What you can not do is use their name in their ads. If I had to guess what's going on here is that at the scale DoorDash is at they're almost certainly utilizing dynamic keyword insertion where it grabs your search query and inserts it into your ad text. This is probably just an oversight honestly. I highly doubt there's some advertisers menacingly rubbing their hands together and cackling as they type in "saddleback bbq" into the ad copy. This is probably just an oversight on Google's part tbh.
Edit: I believe that you can stop this to some degree also by registering your trademarks with Google. Here's their ads policy. https://support.google.com/adspolicy/answer/6118?hl=en