I understand the train of thought you're having. It may not be the best kind of business scaling-wise but if done right he could open some more somewhere else and horizontally scale that way. Everything can be scalable when pushed into the right direction.
More branches = more employees = almost automatic administration = more money.
Another point why this result may not be typical of attempts to duplicate this business in other parts of the country is that he is doing this in Washington DC, the epicenter of where cash is being artificially injected into the economy by defecit spending. Silicon Valley, DC, and NYC exist in a different world from the rest of the US
You're right about DC having a regional effect, but wrong about "cash being artificially injected," especially since deficit spending has very little impact on DC's economy (think lobbying and consulting).
I lived in DC for a few years and there's a strong work + happy hour culture for young professionals. It's pretty standard to hit the bar after work and get home at 9-10pm on any weeknight.
The result: a group of tired young professionals who have zero desire to clean up their apartments.
Government spending IS spent in the DC area. Every government contractor has major offices if not outright headquartered in DC area. For example: Northrop Grumman, CSC, Lockheed Martin, and General Dynamics are all headquartered there. Any new bureaucracy finds offices in the region - TSA's 4000+ headquarters employees are in Northern VA.
I know I am going off on a tangent but since 2008 the US government has been spending $1,300 billion more than it collects each year! Instead of spending that in the DC area why not just send a check for $10,000 to each and every household in the US. Of course these numbers do not include the TARP cash that is deluging Wall St.
I don't want to follow this tangent further, but you're right about the headquartering of consultancies in the DMV area. Booz Allen is there too. Still:
Instead of spending that in the DC area why not just send a check for $10,000 to each and every household in the US.
Because that money is funding a decade-long war overseas and a series of tax cuts enacted several years ago that were recently extended.
Of course these numbers do not include the TARP cash that is deluging Wall St.
Almost all of the TARP money has been paid back. [0]
More branches = more employees = almost automatic administration = more money.
Those are only my opinions, therefore not facts.