A stochastic dynamic programming model for valuing exclusivity from encroachment in franchising
Valuing territorial exclusivity in franchising is difficult because of the uncertainty associated with variables such as future franchise sales and brand strength. We present a stochastic dynamic programming model to value the exclusivity option from the perspective of both the franchisor and the franchisee. When there is positive value to the franchisor of including the exclusivity option in the contract, and to the franchisee of purchasing this option, the likelihood of franchisor-franchisee encroachment-related conflict is reduced. We also discuss structural results and explain our results using a numerical example.
Year of publication: |
2012
|
---|---|
Authors: | Tikoo, S ; Liu, S ; Nair, S K |
Published in: |
Journal of the Operational Research Society. - Palgrave Macmillan, ISSN 0160-5682. - Vol. 63.2012, 2, p. 151-159
|
Publisher: |
Palgrave Macmillan |
Saved in:
Online Resource
Saved in favorites
Similar items by person
-
A stochastic dynamic programming model for valuing exclusivity from encroachment in franchising
Tikoo, S, (2012)
-
Models and Methods A Rigorous Method for Inspection of Model-Based Formal Specifications
Liu, S, (2010)
-
Analysis of back-office outsourcing contracts for financial services operations
Basu, P, (2012)
- More ...