Actually, the first major assumption in this particular model is that the demand will walk to the nearest outlet. Everything else - adding a second dimension, relocation costs, possibility of entry, first-mover advantages, prices, product quality, etc. - can be easily added to the model - just add a bunch of ratios and coefficients* to your equations.

*The second major problem which this model does not suffer though is that when your model gets closer to reality, its predictions become highly dependent on many coefficients the true values of which you do not know most of the time.