I found my issue was that I was using the term as the taxonomy, which brought me all posts under the taxonomy and not the category(term).
This was a quick fix, I just wish I would have caught on to it last night:
$args = array(
'post_type' => 'restaurant-menu',
'tax_query' => array(
array(
'taxonomy' => 'menu-category',
'field' => 'slug',
'terms' => $term_name
)
)
);
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