it is not bad if you are doing internal linking and not anchor text spamming in the footer links. It can be used to pass PR to more important pages but should mostly be though of as providing the user a better experience when navigating your site.

footer links are bad for SEO when linking to other sites or when other sites link to you since that creates hundreds, thousands or even millions of links with the same anchor text. it's an old SEO tactic that no longer works

contact webmaster and ask them to remove the link(s) and tell them you'll paypal them $10 or whatever for their time. gets their attention and works. otherwise link removal requests often get ignored

if domain registration is not private then they know this, if email addresses and physical addresses listed on the site are same they know same owner, if ips are the same they know same owner

if you do linking, link the lesser site to the main site only.

bottom line is if you are targeting the same keywords you are against Googles TOS because you're only supposed to have one site for your business.