A Two-player Model for the Simultaneous Location of Franchising Services with Preferential Rights

We consider the discrete location problems faced by two decision-makers, franchisees, that will have to simultaneously decide where to locate their own services (unsure about the decisions of one another). All services compete among themselves. At most one service can be located at each potential location. We consider that one of the decision-makers has preferential rights meaning that if both decision-makers are interested in the same location, only to this decision-maker will be given the permission to open the service. We present a mathematical formulation and some conclusions based on computational results.