Then came the 50s, the little town on top of the hill overlooking the vast expanse of a monochrome buildings perched on wide avenues laid out in a magnificent system of quadrants by French Architect Charles L'Enfant.
The war had ended, the Great Depression a fading image in the rear view mirror. All of a sudden, the Government was hiring and Federal workers abound.
From the Navy Yard to Bolling, thousands upon thousands of jobs were created to support the burgeoning Military/Industrial Complex.
The 1960s ushered in a period of hard drugs, rampant liquor and sordid strip clubs that dotted the strip, virtually every corner, on both sides of the street.
Slowly and steadily, the area started going downhill. Schools became desegregated and the white and wealthy moved out to the sprawling suburbs.
But now gentrification has come to this side of the river, and with a consolidated headquarters for the U.S. Department of Homeland Security with 4.5 million square feet of office space already breaking ground, thousands upon thousands of employees will start moving permanently within two years.
2013: Coast Guard
2014: DHS and FEMA
2016: TSA, CBP, and ICE
The 1960s was also an era of assassinations and in 1968, Martin Luther King was martyred. The ensuing riots ravaged the town for four endless days -- the capital ablaze, the scars left behind by the looting and arson still evident a generation later.
Lena had just finished her inventory at the store. The convenience store had opened up three years ago and was doing great business. They had a steady flow of customers from the amazing foot traffic and prime location right on the prominent corner.
Congress Heights was happy to get its first grocery store three years ago -- a sprawling Giant selling fresh fruit with clean aisles. For the last three decades, this area was in a sad state of neglect. Now 19 projects worth over $455 million dollars had been either started or slated since 2006 with the headquarters of the Department of Homeland Security moving into neighboring St Elizabeths.
Still, many local residents from east and west and up and down Malcomn X Avenue found the Corner Mom and Pop store reliable, well stocked and selling exactly what they wanted.
And with more than 2,650 residential units and 6.6 million sq. ft. of office space in the pipeline within one mile of Congress Heights, business would surely pick up and be sustained.
The Mellon Convenience Store had an advantage of many others -- their large basement that served as storage. Because of this storage, the store could maintain a large inventory of merchandise.
The advantage of this is that the store is always stocked which is extremely beneficial since the store never closes. However, since the store had to purchase goods ahead of time, they had to ensure proper documentation and accounting.
In Inventory Control, do you restock the shelves by pushing the old items back to make room for new items of the same kind (The Last item stocked will be the first one sold -- LIFO), or do you move them to the front (FIFO)?
Well it depends. Perishable items (dairy, mayonnaise, juice) need to be FIFO, but other items like clothing or raw material can be either.
Why does it matter, you may ask. Because it will make a huge difference in the Profit/Loss statements. For one, FIFO results in higher inventory accounts compared to LIFO. Also results in lower Cost of Goods Sold amount.
COGS = Beginning Inventory + Purchases - Ending Inventory
Subway works a little differently. They actually purchase raw material (flour, barley, sugar, salt, etc). All these ingredients cost something.
In Subway's case, whatever finished loafs, meat and veggies they have at the end of each quarter (Goods Avail for Sale) subtract the inventory of raw materials to make these finished products is the Cost of Goods Sold.
The $5 Subway sandwich is such a great marketing idea for the Franchisor. That's because the company gets paid no matter what the profit margin is for the Franchisee. The profit margin is normally $1.20 per sandwich. So we are hoping that the diner is extra thirsty.
Subway is such a great restaurant because
- The bread is fresh and the smell lingers
- The customer can ask exactly how they want their sandwich
- The space is clean and presentable
- The sandwiches are delicious
- Price is Right (sometimes even as economical as making it at home)
The drawbacks of starting a franchise, is the amount of money invested upfront. There is a franchise fee along with an build-up fee which could run a couple hundred thousand dollars or more.
Because of the Time Value of Money, this is money that is tied up and will take some years before an investor recoups this investment.
| FV= PV (1 + i )N |
- FV = Future Value
- PV = Present Value
- i = the interest rate per period
- n= the number of compounding periods
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