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Comment by philwelch | Hacker News Reader

Don't know if it's true, but there's a cute urban legend about the location thing.

Apparently, McDonald's franchise location strategy always used to be to analyze all kinds of variables to find the most cost-effective location in a given area. Burger King's strategy was always to build right next to McDonald's.

Of course, for various game-theoretic reasons, the optimal location for competing businesses is usually right next to each other.

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I read something similar about Starbucks. Their approach is or was to be located next to a dry cleaner or movie rental business (when they existed). The thought was that people have to go to those stores twice to drop-off and pick-up and they thought it increased the chances that people would stop in for a coffee.

I read something else similar involving Starbucks. Apparently other coffee chains have taken the strategy of building next to Starbucks. The thinking is to let Starbucks pay for marketing, then when the lines are long at Starbucks, people will try the rival instead. Some will prefer it, and so a customer is born.

In the British version of "The Apprentice", one of the contestants located his coffee cart next to a Starbucks and cleaned up as a lower-priced alternative.

Jamba Juice is a well-known example of the "just build next to a Starbucks" philosophy... even when Starbucks weren't everywhere.

I'd think they should put one next to laundromats, mechanic garages, anywhere where you have to kill time.

I always go to the same Jiffy Lube because there's a Starbucks across the street from it.

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