The annual survey by the NPD Group found the vast majority of restaurant closures from 2010 to 2011 were local mom-and-pop restaurants.
Among the 1,486 restaurant locations shuttered last year, 1,261 were independents, it said.
It can be difficult for restaurants to attract new franchisees and secure money for capital expansion in an uncertain economic environment, NPD said.
Those closures came even as overall visits to Canadian eateries increased by two per cent.
The survey compiled in December, which tracks consumer usage of commercial and non-commercial food service outlets, suggests that spending in restaurants also improved by three per cent compared to 2010.
“Though chain operators have seen their share of challenges, it’s the independent restaurants that are in the midst of an uphill battle,” said Robert Carter, executive director of Canada foodservice for The NPD Group.
“However, considering the industry sales improvement we’re starting to see, those operators who are managing to push through this difficult period stand to benefit in the future.”
The survey found that restaurants specializing in casual dining, especially those focused on Italian, seafood or a varied menu fared the worst.
The fastest growing categories included frozen yogurt, quick service Mexican and casual Asian cuisine.
In the quick service restaurant category, independent sandwich stores led losses with a nine per cent decline, or 366 closed outlets.
Only a few restaurants in that market achieved a net increase.
Gourmet coffee and tea chains grew by 108 outlets and there was a three per cent increase in the number of Canadian frozen yogurt stores. NPD said the frozen yogurt trend will continue in 2012 as more U.S. chains make their way north.
By region, the only two Canadian provinces to see an increase in restaurant units last year were Alberta and Manitoba.