“We have resisted an across-the-board price increase so far this year, largely because we know that the economy is already causing so many people to make difficult choices about how and where they spend their money,” said the voice over the conference call. It was Steve Ells, founder and CEO of Chipotle, during the company’s third-quarter investor conference. “However, in light of food costs that have continued to rise farther and more rapidly than we expected, we will be raising menu prices,” Ells continued.

Increases on a $7 burrito paled in comparison to the $700 billion bailout package that passed just 19 days before, but the news was equally as bad for quick-serves. If Chipotle, as a standard bearer for the industry, can’t fend off menu price increases then countless quick-serves will likely suffer the same fate this year.

As consumers trade down, food prices inch up, and energy prices refuse to turn south, menu price hikes might become unavoidable for many brands. For those looking down the barrel of such a gun, pricing guru Rafi Mohammed only has this to say: “Give me 60 minutes with any company, and I’ll show them how to make more money through pricing.”

Mohammed has worked on pricing issues for the last 20 years and is the founder of Culture of Profit LLC, a consulting company that works with companies on pricing strategies. As author of The Art of Pricing and co-author of Internet Marketing: Building Advantage in a Networked Economy, he is one of the premier authorities on uncovering hidden profits through strategic pricing.

With a clear and honest look at the daunting economic climate, Mohammed offers QSR readers advice on how to make price increases work.

How is the economic slowdown affecting pricing? Restaurants are in a unique situation where, No. 1, wholesale costs are going up and, No. 2, we’re in a situation where consumers are under considerable stress because of the economy and because the value of their marketbacks is going down as well. Restaurants are facing a one-two punch. In the good ol’ days when times were really good, when wholesale costs increased, restaurants could easily pass along the price hike because the economy was doing really well. But now that consumers have the shaky economy and price increases, there are certain limits to their budgets.

At what point does an operator not have any choice but to raise prices? Companies can reach a point where costs are going up, and at certain restaurants you might be able to increase prices without a problem. There are also quick-serves that consumers might be trading down to. If I’m a restaurant seeing my demand increase because more people are trading down, that’s great because that gives me more flexibility to raise prices. If I’m not, and I’m seeing demand is down and my profit margin is down, then I have the option to increase prices, but that’s only one thing I can do. It’s really important to come out with new types of specials or other lower-cost items to keep customers in the fold.

Is there a smart way to increase prices and ensure repeat business? Let’s say I go to my favorite restaurant, and all of a sudden I see they did a 6 percent price increase. Sure, they might get me one time, but the next time I’m going to remember that the prices increased. It’s important to keep people in the family and to have a mix of products that are lower costs. For example, in the consumer packaged-goods market, Procter & Gamble is doing an excellent job of having different versions of its products—for Bounty it has a good, better, and best option. What they’re doing is keeping people in the family by offering less-costly options that people can trade down to without damaging the brand.

If I were a quick-serve restaurant faced with low demand and increased prices, I wouldn’t want to turn off those customers where this is their last straw. Offering discounted specials is an important factor for these restaurants.