"Their restaurant is not in front of us."
Translation:המסעדה שלהם לא נמצאת מולנו.
I omitted נמצאת and it was marked correct. Why/when is it not necessary?
It's not really necessary here. The main use of נמצא is to make sentences clearer. For example, הכרית על המיטה can mean both "The pillow on the bed" and "The pillow is on the bed"; if you want to say the latter, you would usually add נמצאת for "is" (a copula for location), for the sentence to be less ambiguous.