CASE STUDY $5\mathrm{.}2$: DETERMINING THE NEW FAST$-$FOOD RESTAURANT

LOCATION FOR ALWAYS FRESH

You have been hired as a consultant to do a location analysis

for Always Fresh, a rapidly growing national chain of fast$-$food

restaurants. Originating in Southern California, the chain has

expanded into several major cities, including Phoenix, Las

Vegas, Dallas, New York City, Boston, and Chicago. The company is now exploring the idea of opening a fast$-$food restaurant in the Washington, DC metropolitan area with a focus in

the state of Virginia. The following cities have been determined

as potential locations: Alexandria, Fairfax, Falls Church, and

Fredericksburg. Senior management has identified the sites in

these cities and is asking you to evaluate them for a new fastfood restaurant.

Ideally, the company wants to locate the new restaurant in a

place that has high visibility; high traffic density; the right demographics $($e$.$g$.,$ high number of young people and households with

children, and high number of middle$-$income groups$)$; ample

parking space; accessibility $($e$.$g$.,$ access to major highways and

access by public transportation$)$; low crime rates; large space;

and affordable rent. The company wants to avoid sites with a high

density of competing businesses, but considers entertainment

and recreation$-$type businesses complementary to its restaurant

business. The company also wants to be away from declining economic areas.

After lengthy interviews with the senior managers and

further market research, you have determined that the critical location factors have the following weights in terms of their

importance:

$1.$ Visibility: $0\mathrm{.}2$

$2.$ Traffic density: $0\mathrm{.}1$

$3.$ Demographics: $0\mathrm{.}2$

$4.$ Parking space: $0\mathrm{.}1$

$5.$ Accessibility: $0\mathrm{.}1$

$6.$ Crime rate: $0\mathrm{.}05$

$7.$ Space size: $0\mathrm{.}05$

$8.$ Affordability of the site: $0\mathrm{.}05$

$9.$ Surrounding businesses and competitors: $0\mathrm{.}1$

$10.$ Economic climate: $0\mathrm{.}05$

You have visited the specific restaurant sites and worked

with the senior management to determine the pros and cons

of each site.

Alexandria. Pros: very high visibility, high traffic

density, very high accessibility, very low crime rate, high

population base, and right demographics. Cons: very little

parking space, space size restrictions, very high rent, high

number of competitors$$moderate to high number of

complementary businesses, and positive economic climate.

Fairfax. Pros: high visibility, moderate to high traffic

density, high accessibility, right demographics $($but

small population size$),$ enough parking space, good site

space, and moderate to low rent. Cons: moderate to high

crime rate, high number of competitors$$moderate to

low number of complementary businesses, and positive

economic climate.

Falls Church. Pros: moderate to high visibility, low crime

rate, right demographics $($but small population size$),$

abundant parking space, good site space, affordable rent,

low number of competitors$$moderate to low number of

complementary businesses, and positive economic climate.

Cons: limited accessibility and limited traffic density.Fredericksburg. Pros: large space, abundant parking

space, highly affordable site, and low number of

competitors$$moderate to low number of complementary

businesses. Cons: low visibility, low traffic density, low

population base and demographics, very high crime rate,

low accessibility, and neutral to negative economic climate.

Given this set of criteria and the team$$s evaluation,

your next task is to make recommendations to senior

management.

Questions

$1.$ Given the set of positive and negative features of the four

candidate locations, develop a set of factor scores for each

location. Use the factor weights and the scores for each

location to create a factor weighting model. Which location

should the company choose?

$2.$ What additional criteria should Always Fresh consider

besides the set of criteria already mentioned?