I worked in restaurants (some chain) for years and we never automatically served cake to people for free. I mean, c'mon? We don't know if they are diabetic or have food allergies. Just what a restaurant owner needs, some irate parent sueing a server over serving free cake to her allergic kid!

You should have checked beforehand to find out what their policies on kids' birthdays are. I know that for us, we charged for cake and any 'extras' or birthday packages. And what's this about a free gift? Last I checked restaurants weren't gift wharehouses. We sometimes gave out balloons but that's IT.

And I've worked in restaurants for the better part of 15 years, so don't tell me this is not the usual.
YOU should be the one giving your child gifts, not the restaurant.