When a traditional restaurant wants to open a more upscale branch, the old brand pulls customers' price expectations down, because they have anchored that name to a familiar price level. The answer is not to abandon the original brand but to create a new name with a clear relationship to the original, enough to convey trust without carrying over its price constraints.
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A bún bò shop that has been packed for more than twenty years, with each bowl priced under fifty thousand dong.
The owner decides to open another location in a commercial district, with a more refined menu, a larger dining space, and table service. They keep the old name because they think it is an advantage.
Three months later, customers walk in asking why a bowl of bún costs three times as much. Staff explain again and again, yet some still walk out. The quality isn't the problem.
The problem is that the name already carries a number in customers' minds.
A brand name anchors price expectations in memory
When customers hear a familiar name, their minds don't only recall the flavor. They also recall the price, the space, and the kind of people who usually sit there.
Ries and Trout call this “positioning in the mind”: a brand occupies a certain place, and that place comes with both value and limits.
Positioning is something you do to the mind of a prospective customer, not something you do to the product.
Al Ries & Jack Trout, Positioning: The Battle for Your Mind
Building that place as a traditional shop is a success. But that place has its own coordinates.
When you carry that name into a new space at a new price, customers don't adjust their expectations on their own. They compare.
And in most cases, the result is a feeling of being “overcharged,” even when the price is entirely reasonable.
Two common mistakes when you want to move upmarket
Mistake one: keeping the old name and simply adding “premium” or “signature” after it.
Readers still see the original name first. The added word isn't strong enough to change the anchor already in their minds.
Mistake two: changing the name completely, leaving no connection at all to the original shop.
At that point you lose the one advantage the original restaurant has built over many years: trust. The new branch has to start from scratch as an unfamiliar brand.
The figure above points to a practical truth: a higher price isn't a problem, as long as the new brand can convey a reason that justifies it.
How to separate the positioning without losing your roots
The most common structure is to create a new name, but leave a quiet thread connecting it to the original.
That thread could be:
- A small caption line on a menu or sign: “from the family that created [original restaurant name]”
- The new branch's social media page links to the original page
- A signature ingredient or recipe retold in the new brand story
- The same founder appears publicly at both places
This approach passes on credibility without carrying over price constraints.
Regulars from the old shop come out of curiosity and trust. New customers at the higher-end branch aren't pinned to the fifty-thousand-dong price of the past.
Brand architecture: choosing which model
In brand design, this problem belongs to “brand architecture”, meaning how the names and entities within the same house are organized in relation to each other.
There are three main directions you can consider.
Option one: a shared brand, using the same name with an added descriptor.
It works when the new price is less than 30 to 40 percent above the original and the new space is different enough for customers to adjust their own expectations.
Option two: a linked brand, with a new name but a visible point of connection. This is the best fit for most F&B (food and beverage) cases that want to move into a higher segment.
Direction three: a fully independent brand.
Suitable when you want to enter a completely different segment, for example from a casual eatery to a fine dining restaurant (upscale cuisine served in courses), or when the original brand has a perception problem that needs to be contained.
What the original restaurant needs to keep intact
The mistake happens when owners, after opening a new branch, start changing the original shop too, to stay “consistent” with the new direction.
Raise the price of a bowl of bún from fifty to eighty thousand dong at the old shop itself. Put up a new sign that looks more upscale. Change the bowls and plates.
Regular customers feel it immediately. Not because of the price, but because the familiar place no longer feels like theirs.
The original shop is an asset because it already has a place in the lives of a group of people. Pulling it up to a new level tears down what has already been built.
What needs to happen is to let the original shop keep being itself, while the new branch builds its own story, grounded in the original but heading in a different direction.
Practical questions before you decide
Before choosing a direction, there are four questions worth answering clearly.
- By what percentage are prices at the new branch higher than at the original restaurant?
- Does the new branch's target audience overlap with the original customers, or is it a completely different group?
- What is the original brand remembered for: its low price, or another value such as flavor, family, or memories?
- Are you ready to invest in building a new identity from scratch, or do you need to draw on existing credibility to reduce launch costs?
Your answers to these four questions will point to the right brand architecture better than any generic formula.
References
Al Ries & Jack Trout, Positioning: The Battle for Your Mind. David Aaker, Managing Brand Equity. Kantar BrandZ 2020: customers are willing to pay 38% more for clearly differentiated brands. McKinsey, The Business Value of Design, 2018.