"مَطْعَم مُحَمَّد جَميل وَغالي."
Translation:Mohamed's restaurant is pretty and expensive.
I see where you are coming from. You want to add (AL) to Mohammed because it is a genitive case between مطعم and محمد, is this the case?
In other situations, you are actually right. But here, it is not the case. Because "Mohammed" is a proper name. We do not add (AL) to a proper name to define it. A proper name is defined by its nature as a proper name.
Such things or type of information are usually delivered by context rather than a specific grammatical rule. So, in your example "Restaurant Baku" - whether the restaurant's name is Baku, or it is located in Baku, both can be delivered as مطعم باكو. This is of course if the receiver and the speaker are on the same page. Things, however, can be made clear a bit by making up a sentence instead of a phrase or an expression of 2 words, in the case of a restaurant located in Baku, by saying (the restaurant which is in Baku) المطعم الذي في باكو (الذي: allaTHí, here stands for "which/who/that"; masculine).