The State of Franchising: 2009: the Franchising Community is Going to See a Rise in Closed Units As Higher Operating Costs Root out Inefficient and Underperforming Units (Special Report: Succeeding in Challenging Times‪)‬

As an economist, I try to understand what the economy and markets are telling us about the future. As a businessman, I try to find the opportunities in those messages. Over the past few years both have been relatively easy efforts. On the contrary, the next few years will be decidedly harder efforts because we are in the midst of fundamental changes. People talk about this crisis as a credit crunch. It may have been precipitated by credit issues, but it has become a fundamental re-pricing of asset values and risk premiums. The problem won't be solved by governments throwing money at it, although that is a necessary first step to stave off even more problems. This crisis will get solved when assets--houses, stocks, bonds, commodities and so forth--find a pricing bottom that holds. That bottom gets formed when income levels can support a stable level of demand and people, not just in the United States, but worldwide, have increased discretionary income with which to pay for these assets.