With the seemingly neverending bad news coming daily from Wall Street and Washington, the average American consumer has been forced into a prudent financial strategy.  But in reality, it's pretty simple.  If you have less disposable income, you spend less.

 

And with workers fearing for their jobs and some trying to deal with mortgages that are spiraling out of control, Americans are now heeding advice that has long since been conventional wisdom: watch what you spend, live below your means and save money so you can be prepared for any type of rough patch you may encounter.

 

And the new spending patterns have had a definte impact on some of today's most notable franchises.  For example, McDonald's has seen some of it's best growth over the last decade in the past few months as the higher end restaurants have been abandoned for the more inexpensive food choices found at the restaurant chain.

 

Conversely, most franchise companies that offer the higher priced goods and services have been hit hard by the recession and some have even tried to target the penny-pinching customer by offering huge incentives.

 

Interestingly, the video game industry has seemed unfazed with the current climate and its franchisors continue to expand at a record pace.

 

While prudence by the spender may be having a negative effect on the economy currently, many analysts think that it will be good for the country over the long term as the American consumer will be better prepared to handle the next downturn.

 

But in the meantime, franchisors and franchisees should continue to be aggressive with their pricing and monitor their expenses as best they can until this financial storm is over.