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I went through both sites and noticed that you don't have canonicals on any of your pages. Also don't see any XML sitemaps. If you can only show the businesses that are in that particular area, and remove the ones that are not I would  probably go for that, unless you are doing Local Search as well. I would be curious to see the example of canonical issue you mentioned. Are these Joomla sites? I'm just asking because there are no description tags on anything except the home page.