In this study, we developed a novel template matching method by establishing two new types of subtemplates for robust recognition of strongly deteriorated signboard images. This method has three main stages: (i) removing occlusion/reflection by using the main peak finding algorithm of uniform color regions; (ii) establishing thinning/thickening and difference sub-templates by using morphological operations; and (iii) adopting template matching criterion based on modified standard deviation. The high performance of our proposed method is shown in the results of an experiment carried out on 200 outdoor images taken under various kinds of bad conditions with occlusion, refection and so on.