An analytical hierarchy approach for selecting restaurant locations in Lebanon

Abstract

The Fast Food industry in Lebanon is more competitive and dynamic than ever and managers as well as franchisors are increasingly faced with complicated yet vital decisions, especially when it comes to site selection. This is a particularly critical decision because of the big investment and the relatively low flexibility that this decision imposes. Add to this its tight relation with future sales generation and success. In this research, criteria that need to be considered for location selection are first identified and pulled together to produce a comprehensive set that is relevant to restaurants and applicable in Lebanon. The selected set, which is organized into a hierarchy tree, encompasses criteria that are quantitative and qualitative, both being vital and taken into account when selecting a new location. Criteria are divided between management and customers. The research then presents a multi-criteria model, the Analytic Hierarchy Process (AHP), which provides managers with quantitative synthesis of qualitative and quantitative judgments to reach the optimal choice in the selection between different location alternatives. Weights and rankings of the developed hierarchy of criteria are calculated by collecting data by interviewing 10 experts in the field and by an online questionnaire for Lebanese fast food restaurants customers. Experts ranked Visibility and Nearby Customer Base as the most important criteria, whereas for customers, Store Physical Characteristics and Area Particularity were given the highest weights.