You have increased opportunity to increase prices when people are trading down to your brand. You can’t just do it across the board. It’s important for restaurants to really stand up and show their value. Applebee’s is really touting their $5.99 special on television, saying, ‘For $5.99 you get a sit-down meal.’ They’re doing a great job of articulating the value of their product. These days consumers are really in tune to what value is.

Are across-the-board increases ever the best option for a quick-serve? No. Never. Customers value your products very differently. There could be pockets of your menu that you have more opportunity to increase prices. For example, it would be smart to increase prices on sides—something that’s optional rather than the main course. The entrée has the lowest markup relative to desserts, sides, and drinks, so get people in for the main entrée and give them the option of trading up to the higher-margin items. That way you can still keep them coming in the door.

You don’t want to hurt your signature items. Use your ‘fighter brands’ wisely. They can come in and out as needed.

What else can operators do to make their increases more successful? When you’re doing your price increases, you should think about offering increased promotions or couponing. So the people who stand up and come in with a 10 percent off coupon are making an effort to send you a signal saying, ‘Price is really important to me, and I need a break.’ If you do a big across-the-board price increase, you might lose your sensitive customers. You can keep those people in the fold by using coupons or incentives like, ‘You have to be in here before 5 p.m.’ You’d rather keep them in the fold than lose them totally.

The key to price increases is to give consumers as many options as possible. If someone takes the time to clip the coupon, bring it in, pull it out of their wallet, this is a person who is telling you that price is important to them.

How do customers react to price increases? People are often scared to increase prices. But what I tell companies is when consumers are buying from you, what they’re telling you is, ‘We looked around at all the other options, and we think you offer the best value.’ Consumers are understanding of price increases. We also need to be understanding, though. There is only so much in the budget these days. It might not be a personal decision, so don’t take it personally if people stop coming. But again, all concepts should have good, better, and best options. I think there’s a lot of room to play around with price in this economy.

Should quick-serves tell their customers that prices are going up? I wouldn’t make an across-the-board statement, but crew members should be cognizant of those changes, and maybe for those customers who really say, ‘This price is a problem,’ give them a coupon for the next time they come back.

All companies have three types of consumers. There are those that say, ‘Gosh, this is a great value.’ You need to find ways to charge them more. You also have the regular people who say, ‘I like coming here, and this place is fun,’ they’re fine where they are. But then you have early-bird customers who come in earlier and have a smaller budget. They’re not bad customers to have because they’re covering their food costs and contributing to overhead. You really want all three kinds.

If there’s a family that comes in and complains about the price, staff members should be able to explain why they’re going up. The additional step would be the coupon for next time. Judicially do that. What you want to do is charge every customer who walks in the door what they’re willing to pay.

When increasing prices, how much is too much? There’s really no rule of thumb.

Is it better to raise prices incrementally? I think people really get turned off if every time they come in the price goes up and up again. The one shot is often the best. Certainly, if you have to do a big price increase, the key is to have the options available to customers.

If an operator insists on incremental increases, how many times can he raise prices? The first time most customers are understanding. The second time in six months, they really start to notice, especially in this economy. Most customers understand that all businesses are hurting right now, but they only have limited budgets.