Syntactically (or "grammatically"), what's interesting is that it is ambiguous between two different structures:
- Mimi's { restaurant and pizza }
- { Mimi's restaurant } and { pizza }
Structure #1 is the intended one, whereby there is some owner/founder named Mimi, and they run an establishment that serves both as a restaurant and a pizzeria. The problem is that the structure could also be interpreted as #2, whereby Mimi owns only the restaurant and the pizza might be owned by someone else entirely!
Semantically, restaurant is a facility, whereas pizza is a food. Both are independently fine - Mimi's Restaurant is a restaurant owned by Mimi and Mimi's Pizza is a place where you can eat pizza made by Mimi. But it is somewhat awkward that the two are linked together - Mimi's Restaurant and Pizza almost sounds like it is a place where you can eat both restaurants and pizza!
Hopefully that should give you an idea as to why it is odd (or irregular). Even so, that does not make it ungrammatical. Despite its ambiguity between the two meanings, it conforms perfectly to the rules of English syntax. Whether it is appropriate or acceptable depends on social convention (i.e. what a society says that restaurant names should look like). Considering that a restaurant with a similar name does in fact exist, and since the average English native speaker living in that area has probably never explicitly thought about the name being peculiar, I don't think it would be fair to call the name inappropriate or unacceptable.
By the way, the wording of this question sounds awfully like a homework problem. Please note that the Ask-a-Linguist website is not intended to be used for getting quick and easy answers to homework problems. (Apologies if this is misdirected.)