Is there a way to embed or link to an MS Word document?

Our requirement
To give our restaurants access to a menu template document that they can update with their own dishes.

I can see there is a PDF embedder, but most of our restaurants don't have the ability to edit PDFs. But is there a widget with the same functionality but with Word documents?

I'm afraid that there is no widget to embed Word documents, similar to PDF embedder.

But, you can upload the Word document file to your web server and then create a link in your form. You can use the "Text" field form element for that. 

In the Editor, just highlight the text and then click the "Insert/Edit Link" icon. Paste the direct link of the uploaded Word document file in the URL field and then click the "OK" button.

You may also attach a file in the Autoresponder Email. In this way, once the user completes the form, he/she will receive a confirmation email with the attached file (Word document).

Please check this guide: How-to-Attach-a-File-to-Autoresponder-Emails

Hope this helps.