The April edition of Inc. Magazine has a nice article featuring Jerry Murrell from Five Guys Burgers and Fries.
From the article: “Our food prices fluctuate. We do not base our price on anything but margins. We raise our prices to reflect whatever our food costs are. So if the mayonnaise guy triples his price, we pay triple for the mayonnaise! And then we’ll increase the price of our product. About five years ago, hurricanes killed the tomato crop in Florida, and prices went from $17 to $50 a case. So a few of my franchisees called and said, “We’re not using tomatoes. The prices are too high.” I suggested using one slice instead of two. My kids were furious: “It should be two! Always!” They were right — it’s too easy to start slipping down that slope. We stuck with two slices, and so did our franchisees.”