Restaurant crowd
After Billy loses his crown, he goes into town and beats up the corrupt cop who beat up his friend, the crowd at the restaurant eventually start cheering.
Why do you think the crowd cheer him on?
I'm guessing that it was such a small town that everyone knows everyone. Otherwise, it'd look some crazily dressed guy beating up a cop. The scene afterwards where Billy knows which school to find that boy who wanted an autograph, suggests this too.