Tully's Coffee

Tully's Coffee is an American specialty coffee brand that began as a Seattle-area coffeehouse company in 1992. Founded by Tom "Tully" O'Keefe, the business opened its first store in Kent, Washington, and developed around hand-crafted espresso drinks, brewed coffee, roasted beans, pastries, baked goods, and coffee-related supplies. Its original strategic context was the rapid expansion of Starbucks, another Seattle-based chain. Tully's built a regional presence in the Pacific Northwest and later operated or licensed stores in several other U.S. states and overseas markets. The company became particularly associated with dark-roasted coffee and a neighborhood-oriented specialty-coffee format. During its expansion, it opened stores in Washington, California, Idaho, Arizona, and Colorado, and used franchise and licensing arrangements to enter markets including Japan, South Korea, Singapore, the Philippines, China, and Sweden. It was also known for placing some stores near Starbucks locations, although management later emphasized serving its local Seattle-area customer base rather than directly pursuing a Starbucks-style national rivalry. Japan became the brand's most durable international market. Tully's opened its first Japanese store in Tokyo's Ginza district in 1997 after Kota Matsuda approached O'Keefe about developing a high-quality coffeehouse chain. Japanese expansion relied heavily on franchising and local licensing rather than direct corporate operation. Tully's transferred a portfolio of intellectual property to a Japanese operating company in 2005, and Ito En acquired that company in 2006. The Tully's name subsequently continued across a large Japanese café network, which had more than 760 locations by April 2022 according to the cited reference material. The North American company encountered financial and strategic pressure in the late 2000s and early 2010s. It postponed a planned initial public offering in 2007 amid weak market conditions and reported a fiscal 2006 loss of $9.7 million. In 2009, it sold its North American wholesale coffee-bean distribution business, brand rights, and roasting operation to Green Mountain Coffee Roasters, while retaining North American retail rights at that time. The transaction enabled the company to repay its debt and support its retail operations. Keurig, through the Green Mountain business and later Keurig Dr Pepper, continued selling Tully's packaged coffee, including bagged ground coffee and K-Cup products. The U.S. coffeehouse business filed for Chapter 11 bankruptcy protection in 2012 after citing low cash reserves and the need to renegotiate leases. An investment group called Global Baristas, associated with actor Patrick Dempsey, acquired the U.S. retail business through a bankruptcy auction in 2013. The operation subsequently suffered additional store closures, supply problems, landlord disputes, and litigation. Stores located inside Boeing facilities were among those closed in 2017. In March 2018, the remaining U.S. stores were temporarily closed after the business reported a lack of coffee, and many did not reopen. A permanent injunction entered in September 2018 ended the U.S. coffeehouse use of the Tully's name by Global Baristas, while allowing Keurig to continue marketing Tully's branded coffee. The Global Baristas entity later faced an involuntary Chapter 7 liquidation petition. Today, Tully's is best understood as a continuing packaged-coffee brand under Keurig Dr Pepper alongside a substantial Japanese licensed café presence associated with Ito En. The original U.S. retail chain is defunct, but the brand remains active through consumer packaged coffee and overseas coffeehouses.

Tully's Coffee opened its first store in Kent, Washington, in September 1992. Founder Tom "Tully" O'Keefe established the company during a period when Seattle was becoming identified with specialty coffee and Starbucks was expanding rapidly. Tully's initially pursued a regional retail model focused on Puget Sound, offering roasted coffee, espresso beverages, pastries, and café supplies. The chain later developed stores and licensed operations beyond Washington, including locations in California, Idaho, Arizona, and Colorado. The company also pursued international licensing. Its first Japanese store opened in Tokyo's Ginza district in 1997 after Kota Matsuda, then a Sanwa Bank employee, approached O'Keefe about creating a premium coffeehouse network. Tully's Japan expanded through a joint venture and franchise-oriented structure. In 2005, Tully's transferred a portfolio of intellectual property to the Japanese operating company, and Ito En acquired that company in 2006. Japan became the brand's strongest continuing café market, eventually reaching more than 760 shops by April 2022. Tully's also licensed or opened stores in South Korea and, at various times, Singapore, Metro Manila, Beijing, and Stockholm. In the United States, Tully's was often described as a competitor to Starbucks and sometimes opened stores near Starbucks outlets. Its strategy later shifted toward a more localized specialty-coffee identity rather than attempting to match Starbucks nationally. The company reported its first net profit in 2006, but fiscal 2006 losses were also reported in the reference material, indicating that financial performance varied depending on the accounting period or measure cited. A proposed IPO was suspended in August 2007 because of volatile market conditions and declining stock markets. A major structural change occurred in 2009, when Tully's sold its North American wholesale coffee-bean distribution business, brand-related rights, and roasting operation to Green Mountain Coffee Roasters. The reported transaction value was $40.3 million. Tully's used the proceeds to repay its debt and retain funding for its retail business, while Green Mountain became the key U.S. packaged-coffee operator. The Tully's brand later remained in Keurig's portfolio and continued in bagged ground coffee and K-Cup formats. The retail company filed for Chapter 11 in October 2012, citing low cash reserves and the need to renegotiate leases. It had recently closed or planned to close 17 unprofitable company-operated stores. Global Baristas, an investment group linked to Patrick Dempsey, submitted the highest bankruptcy-auction bid in January 2013, and the court approved the sale later that year. Dempsey subsequently withdrew from the partnership and became involved in litigation with former partner and attorney Michael Avenatti. The U.S. retail operation continued to contract. In 2017, Tully's announced the closure of 12 Boeing-site cafés. In March 2018, it announced that the remaining stores were temporarily closing because of a lack of coffee. Many locations stayed shut, with landlords posting eviction notices tied to unpaid obligations. Tully's was also sued by Daytona International Speedway in April 2018. In September 2018, Keurig and Global Baristas entered a permanent injunction that ended Global Baristas' ability to operate a food or beverage business under the Tully's name. The original U.S. coffeehouse chain therefore became defunct, while Keurig retained packaged-coffee sales and licensed overseas operations continued, particularly in Japan. An involuntary Chapter 7 liquidation petition was filed against Global Baristas in October 2018.

• 2018

  U.S. coffeehouse chain closes

  [1]Tully's Coffeeen.wikipedia.org

  A permanent injunction ended Global Baristas' use of the Tully's name for a U.S. food or beverage chain.

• 2013

  Global Baristas acquires U.S. retail business

  [1]Tully's Coffeeen.wikipedia.org

  The bankruptcy court approved the sale of the U.S. coffeehouse business to Global Baristas.

• 2012

  Chapter 11 filing

  [1]Tully's Coffeeen.wikipedia.org

  The U.S. retail company filed for Chapter 11 protection after financial and lease pressures.

• 2009

  Wholesale and roasting business sold

  [1]Tully's Coffeeen.wikipedia.org

  Green Mountain Coffee Roasters acquired Tully's North American wholesale, brand, and roasting operations.

• 2007

  IPO plans suspended

  [1]Tully's Coffeeen.wikipedia.org

  Tully's postponed its proposed public offering in response to volatile financial markets.

• 2006

  Ito En acquires the Japanese operating company

  [1]Tully's Coffeeen.wikipedia.org

  Ito En acquired the Japanese company operating the Tully's brand in that market.

• 2005

  Japanese intellectual-property portfolio transferred

  [1]Tully's Coffeeen.wikipedia.org

  Tully's sold a portfolio of intellectual property to the Japanese operating company.

• 1997

  Japanese expansion begins

  [1]Tully's Coffeeen.wikipedia.org

  The first Japanese Tully's location opened in Tokyo's Ginza district.

• 1992

  First store opens in Washington

  [1]Tully's Coffeeen.wikipedia.org

  Tully's opened its first coffeehouse in Kent, Washington, establishing its Seattle-area specialty-coffee business.

Specialty coffee with a dark-roast heritage, sold through packaged coffee and licensed café channels.

• Roasted coffee

  Dark-roast coffee

  Dark-roast coffee was central to Tully's identity in both its cafés and packaged-coffee business. The brand's original retail proposition emphasized brewed specialty coffee and espresso preparation, while its wholesale and consumer products extended the roast profile into beans and ground coffee sold outside the cafés.

• Packaged coffee

  Bagged ground coffee

  Tully's packaged ground coffee is part of the continuing brand portfolio managed through Keurig Dr Pepper. It carries the Tully's name into grocery and at-home preparation channels after the closure of the original U.S. coffeehouse chain.

• Single-serve coffee

  Tully's K-Cup coffee

  K-Cup-format Tully's coffee represents the brand's single-serve packaged offering under Keurig. The product keeps Tully's available for at-home brewing and separates the continuing packaged brand from the defunct original U.S. café operator.

• Coffeehouse beverages · 1992

  Espresso beverages

  The original Tully's cafés served hand-crafted espresso drinks alongside brewed coffee. These beverages formed part of the chain's specialty-coffee retail format and were typically sold with pastries, baked goods, and other café items.

• 2018

  End U.S. coffeehouse use of the brandStrategy

  Background

  The U.S. retail operation faced store closures, coffee-supply problems, unpaid landlord obligations, and legal disputes.

  Action taken

  Keurig and Global Baristas entered a permanent injunction barring Global Baristas from operating a food or beverage business under the Tully's name.

  Aftermath

  The U.S. coffeehouse chain became defunct, while Keurig continued packaged-coffee sales and overseas licensed cafés continued, especially in Japan.

  Source

• 2012

  File for Chapter 11 bankruptcy protectionOther

  Background

  The U.S. retail chain reported low cash reserves and needed to renegotiate leases after closing or preparing to close unprofitable stores.

  Action taken

  Tully's board and management filed for Chapter 11 protection and pursued a restructuring and sale process.

  Aftermath

  Global Baristas won the subsequent auction for the U.S. retail business, but the operation later ceased trading.

  Source

• 2009

  Sell North American wholesale and roasting operationsM&A

  Background

  Tully's needed capital to address debt and support its retail business while maintaining a continuing role in coffeehouses.

  Action taken

  The company sold its North American wholesale distribution business, brand-related rights, and roasting operation to Green Mountain Coffee Roasters, while retaining specified retail rights.

  Aftermath

  The reported proceeds enabled Tully's to repay its debt. The packaged-coffee business later continued within Keurig's portfolio.

  Reported transaction value. $40.3 million (2009)

  Source

• 2007

  Postpone the initial public offeringStrategy

  Background

  Tully's had planned an IPO, but volatile market conditions and a sharply declining stock market led its advisers to recommend delaying the offering.

  Action taken

  The company suspended the IPO plan and explored alternative financing, strategic investment, and sale opportunities.

  Aftermath

  Tully's remained privately financed and later sold its wholesale and roasting operations to Green Mountain Coffee Roasters.

  Fiscal 2006 loss. $9.7 million loss (Fiscal 2006)

  Source

1. 1Tully's Coffeeen.wikipedia.org