ABSTRACT
Conflict within franchise channels of distribution has been the direct and indirect subject of a significant body of theoretical and empirical research in marketing (for a review of this literature see Gaski 1984; see also Anand and Stern 1985). However, mathematical modelling of the franchise relationship has focused primarily on the question of optimal channel structure rather than on the particular sources of franchisor/franchisee conflict (for example, see Inaba 1980; Blair and Kaserman 1982; McGuire and Staelin 1983). One major source of that conflict which has received little specific attention has to do with the divergent interests of franchisors and franchisees regarding levels of market penetration and site location (Zeller, Achabal, and Brown 1980).
