Since the beginning of the pandemic recovery in 2021, smaller quick service restaurant (QSR) operators have battled it out with the larger and more established chains. Their goal? To win the hearts, minds, and foodservice budgets of the Canadian QSR consumer – while stealing market share from major chains in the process. After aggressive expansion and a period of stagnation, Canada’s major QSR chains collectively declined in units in 2020, adding fewer than 200 units from 2019 to 2023 and remaining under their historical peak. By contrast, smaller chains added around 900 units during the same period, while independent operators, despite pandemic disruptions, successfully rebuilt their presence by adding 1,000 units, Circana’s Recount® data shows.

The major chains still dominate the market, though growth momentum has shifted to smaller chains and independent operators, which have emerged as the pacesetters. They are succeeding thanks to several factors that position them well for a strong future where they can compete, head-to-head, with the larger chains.

Here’s how they’re winning:

1. Rapid expansion and greater reach

Smaller chains and independents have grown their store counts at a much faster pace than the major chains. This helps them increase their reach and awareness and broaden the variety of offerings available to the restaurant-going public. 

2. Capturing Gen Z’s attention

Smaller brands have successfully attracted more than their fair share of Gen Z consumers, who are eager to explore and expand their restaurant repertoire beyond their parents’ QSR brands. And this generation likes to support brands that speak to them on a personal level.

3. Adopting digital tools

While they were late to the digital space, the smaller chains and independents have embraced digital ordering technologies, allowing them to compete with larger players on a customer-by-customer basis. Together with the Gen Z influences above, this focus pays dividends today and promises future success as digital platforms grow alongside this generation.

4. Global flavors, local appeal

A focus on authentic global flavors appeals to the increasingly diverse Canadian population and provides fresh and innovative menu offerings for all to enjoy. 

With a perception of higher quality food, service, atmosphere, and ambiance, these up-and-coming QSR operators can charge higher prices and attract a higher share of on-premises visits. Their adventurous menus and unique experiences are defining the future of Canada’s foodservice landscape. Meanwhile, legacy QSR providers scramble to keep up with the rapid pace of change. But make no mistake, they will not sit by and watch as these upstarts erode their hard-earned market share. In the end, the consumer will be the winner as operators raise the bar in this battle.

To learn more about how QSRs are changing the game, read our report, The Rise of Small QSR Chains and Independents in Canada. Do you have any questions for Circana? Email GrowthInsights@circana.com.