When Bruce Elliot took over the reins of Second Cup at the end of 2004, he quickly learned a valuable lesson about café culture: It's not about the coffee. It's not about food quality or clean washrooms either. Elliot, who was previously president of Labatt Breweries of Canada, discovered the secret to good café sales was something more touchy feely. "The real drivers were emotional," he says. "It's about how you feel."

That simple revelation stunned head office, says Elliot. For years the company had been trying to tweak traditional drivers of the business, but same-store sales were flat and recruitment of new franchisees had slumped.

Second Cup opened its first kiosk back in 1975, and has since grown to 360 stores. The company didn't face any serious competition until the mid 1990s when Starbucks Canada expanded its reach across the country. Starbucks, which opened its first store in Vancouver in 1987, didn't launch a full-scale assault until 1996 when it signed an alliance with Chapters bookstores. Today, Starbucks operates over 400 corporate-run stores, and more than 100 licensed concept stores across the country. Timothy's, another Canadian-owned premium coffee purveyor, also got its start in 1975, but only operates 120 locations across the country.

So the new Second Cup prez embarked on an ambitious rebranding effort. Elliot hired Toronto-based Level5 as brand strategy advisors. They walked in and threw out much of the old research on bathroom cleanliness and coffee flavours. Level5 convinced Elliot to deploy an outside research team to look at parameters that went beyond infrastructure changes. "Successful brands differentiate on emotional attributes," says Peter Drummond, Level5 VP/senior advisor. The new research showed that "for Second Cup it's about escape and being a valued customer," he says. "That became the fuel to driving the [new] strategic decisions."

Elliot unveiled Second Cup's new strategy at its franchisee convention in May 2005. By rebranding itself as the "neighbourhood oasis," Second Cup hoped to leverage itself as the Canadian David taking on Starbucks, the globalization Goliath.

The convention was a hit. Franchisees liked how Elliot's team honed the vision statement. "The concept of an oasis café was always there but we hadn't found the right words to define it until Bruce [said it]," says Philippe Assef, who owns a Second Cup in Laval, Que.

The convention started a brand roll-out plan that included a new store and logo design. And on the promotional side, Second Cup amped up its focus on women. The brand had success with a guerrilla marketing campaign that roped in star endorsements, and a magazine giveaway incentive program, and both efforts are being expanded upon.

Staff training also became imperative, and last June Elliot introduced online training modules. "We've spent a ton of time and money educating the front line," says Elliot. "If our brand promise is largely emotional and emotive, and the point-of-sale of the Cup doesn't deliver, it's a problem," he says.