A multiple objective integer programming approach for planning franchise expansion

Abstract

The number and configuration of franchise outlets in a market defines the distribution strategy of a franchise company. The introduction of new franchise outlets contributes to conflict between the franchisee and franchisor over the degree of market penetration. The selection of sites for new franchises is an important factor in the long-term profitability of many types of franchises. This selection process requires consideration of objectives of the franchisee and franchisor which are often conflicting in nature. This paper deals with the problem of locating new franchises in an existing franchise network using multiple objective integer programming models and methods.