Although Culver’s took a price increase on some of its menu items, it held the price at $2.99 for its popular SnackPak (a ButterBurger, small fries and a small drink).

“The biggest challenge we face is how to deal [with rising expenses] without passing too much of the cost onto the consumer,” Contino explains.

Consumers see food-price increases at the supermarket, so they understand that restaurants face similar problems and must adjust menu prices. But most Top 400 chains appear to have kept price hikes in line with—and not in excess of—the overall inflation rate.

McDonald’s Corp. President and COO Ralph Alvarez recently said that the chain keeps a close eye on economic indicators. “We know we have to stay below food-away-from-home inflation,” which has been running at a 4% annual rate, he told reporters after the company’s annual shareholders meeting. “We believe we can’t exceed that.”

Leslie Kerr, who monitors national menu price trends as a principal with Boston-based consultancy Intellaprice, has noticed that more restaurant companies are marketing themselves to value seekers. “When I talk with people in the industry, they’re driving the value message as much as possible,” she says.

“Some customers may translate that to mean more discounts. But the operators are trying a lot of other techniques. You never want to get into the price game if you can avoid it. It’s a tough game to win.”

Strategies at work include promoting higher-margin items, lowering prices on select high-traffic items to ensure traffic counts remain strong, and promoting new lower-price beverages, snacks and sweets in the hope that customers will buy other items during their visit as well.

At Dillon, Mont.-based Great Harvest Bread Co., the price of bread is kept in line with grocery-store bread prices.

In addition, just about everyone is monitoring their operations carefully to save money on the back end.

At Culver’s, frying oil is maintained carefully to maximize its lifespan. Unsold custard at the end of the day is packed into containers for to-go orders instead of being thrown away. The company’s SnackPak, which includes its signature burger, small fries and a small fountain drink, remains on the menu priced at $2.99. Even so, the chain increased prices 6% last year. Taking that into consideration, Contino is satisfied that store traffic is steady, if not growing.

“Once you raise prices, the best thing you can expect is that your transactions remain flat,” he says.

The cost pressures being felt by established chains are an even tougher development for young brands seeking to add both franchisees and consumer name recognition. David Smith, COO of Atlanta-based Franchising Concepts, encounters nervous franchisees in working with Rising Roll Gourmet, a developing 11-unit chain (not among this year’s Top 400) based in Atlanta.

After presenting franchisees with new marketing and training initiatives, many franchisees’ response was, “All of this is great, but if you don’t get my costs under control, none of this is going to matter,” Smith recalls.

As a result, Rising Roll audited operations to find areas where it could help franchisees avoid or weather future cost increases. One of the solutions also resulted in a menu improvement.

“Bread was the first thing we looked at,” Smith says. “One of the things we kept in mind was customer feedback. People would say that the bread was fantastic, but we noticed that they were throwing away a lot of it. It was the right circumference, but it was too tall.” Working with a vendor, the company was able to lower the profile of the chain’s signature boule bread roll and introduce an alternative white-wheat roll favored by test audiences that also was cheaper to produce. “We have a better bread, and we’re saving franchisees 19% on their bread costs,” he says.

Although Great Harvest Bread Co. hasn’t altered its selection of bread in response to rising wheat prices, the Dillon, Mont., company takes a close look at what grocery stores charge for premium breads. Then each franchisee prices breads by using local grocery-store prices as a benchmark.

“We keep an eye on the ounce-by-ounce price comparison. So our breads are inline [with] or less expensive than premium breads at the grocery store,” explains Kate Ord, marketing director. This doesn’t mean prices haven’t gone up or that franchisees aren’t absorbing costs. But according to Ord, traffic counts remain strong.

“What has been gratifying is that, during this time, we have not seen a dip in sales,” she says, attributing the steady business to consumers’ growing demand for healthful, wholesome products.

When price increases are on the menu, some segments are hit harder than others. Kerr notes that casual dining tends to have a more difficult time implementing menu increases compared with QSR concepts. For one, menu boards are easier to change than printed menus. For another, QSRs have lower average checks, so menu increases don’t appear as dramatic.

“[QSRs] might feel a little more leniency to take a price increase,” Kerr says. “And a lot of them feel they need to do that so that they don’t have to take all of the pain.”

On the other hand, because casual dining has higher check averages, the segment has a bigger challenge in communicating value propositions to diners. “Casual dining is taking a smaller increase,” Kerr notes. And casual dining chains are tucking those increases away from traffic drivers, instead keeping signature items the same price or less.

“Net-net, you don’t have much change overall, but the restaurants are catching on to the fact that if they’re going to charge $10 to $15 for a steak, then that’s value,” she explains. “You have to find out what is most visible to customers.”