Dressing up a sub

(FSB Magazine) -- How can you tell when your retail chain needs a face-lift? One clue: Prospective investors refuse to cough up expansion capital because they hate the way your stores look.

Jeff Warfield runs Submarina, a chain of California sub franchises based in San Marcos. Eager to take his successful restaurant concept national, Warfield approached venture capitalists for the funding. Every potential investor rejected his proposal on the grounds that Submarina needed a stronger brand identity, a tactful way of saying that his 37 stores suffered from bland décor and a confusing menu.

More from FSB

Help wanted for HR firm A CEO and rodeo queen King of the mountain bike

Current Issue

Thus began Warfield's initiation into the mysteries of restaurant design. "I thought branding meant changing the logo, but was I wrong," recalls Warfield, 40. After interviewing two other design firms, he hired Tesser, a San Francisco branding shop. The firm decided to highlight Submarina's use of fresh California produce and its earnest, friendly staff, reminiscent of a small-town diner where everyone knows your name.

Once the basic concept was in place, Tesser developed two alternate color schemes for the shops. First came a palette inspired by images of a sun-drenched picnic at the beach. The second riffed on farmers' markets, with their warm yellow light, woody station wagons, and baskets full of colorful vegetables.

"The farmers' market was the best choice for Submarina because it evokes intimacy, freshness, and quality in a casual environment," says Tesser CEO Tré Musco, 40. "And it's where great food comes from."

Musco's design team painted the walls bright yellow, complemented by rich red below the counters. They installed glowing droplights to keep the ceiling white and clean, and replaced the plain-vanilla ceiling fans with a sailcloth fan that moves more air and evokes the sailboats that dot the waters off the California coast.

Photo gallery: Submarina before and after

To make Submarina more family-friendly, Tesser also replaced the hard chairs and two-seat tables with comfortable booths. "The new seating arrangement attracts larger, more mature groups that won't want to leave quickly," Musco explains. "When people dine in, they tend to spend more money."

Tesser suggested custom-made Italian terrazzo tile flooring, with the look and feel of sand to emulate the coast. Warfield dismissed the suggestion on the grounds that it was too expensive for his $250,000 budget and settled instead for light and dark tan tiles - still an improvement on the ugly brown carpet in the original stores. Tesser also revamped the menu board. "The old board was disorganized and hard to read," says Musco. "And it was backlit, which screams McDonald's. We didn't want them in that category."

As a final touch, Tesser created an annotated mural of the Southern California coast that features Warfield's favorite surf and hiking spots, the first Submarina shop in Poway, near San Diego, and the local farms that supply Submarina's meat and produce. "The mural is my favorite part of the renovations," says Warfield. "It's a staple at all our stores."

With the interior complete, Tesser and Warfield tackled Submarina's logo. Based on Tesser's research with focus groups, passersby thought the sign indicated a marine supply store or a seafood joint. Musco's team solved that problem by eliminating the teal color, which the focus groups associated with marinas. They limited the logo to two colors, red and yellow ("cost-effective, and it punches when lit"), slanted the text to suggest dynamism, and added a sun icon ("for sunny San Diego"). "The sun in the letter 'B' changed about 20 times," remembers Warfield. "But it was worth the effort."

Finally, Submarina needed a tag line. Tesser suggested the familiar "deli-style." Warfield liked "California-style" because of Submarina's emphasis on local ingredients such as sprouts and avocado. Warfield prevailed, and the tag line became "California Subs."

Since July 2005, Warfield has rolled out the redesign in 12 new stores and retrofitted 12 others. He finished 2006 with $15 million in revenues. By August 2007 the renovated stores were averaging 24% annual sales growth, up from 7% average annual growth before the renovation, while the top performers were up by as much as 26%. At presstime local developers had committed to opening 519 new Submarina franchises in Texas, Arizona, and Florida (each store costs $200,000 to $300,000 to launch). Fifty-one franchises are up and running, with the remainder scheduled to open over the next ten years. Warfield projects that corporate revenues will hit $20 million this year.

Right now Warfield is thinking about animating the sun in his new logo for future TV commercials. "Tesser really hit it on the mark," he says happily. "I've worked here my whole life, but they opened my eyes to my own business."