[7] It operated stores in the Greater Puget Sound area of Washington, San Francisco, Los Angeles, Idaho, Arizona, California[7] and licensed its brand for use in South Korea and Japan.

This decision was made right after the company was advised by its bankers to refrain from going forward with the IPO due to a tremendously declining stock market.

Tully sold its North American wholesale coffee-bean distribution business, brand (which it licensed back for $1/year in perpetuity), and roasting operation to Green Mountain Coffee Roasters in 2009, earning $40.3 million in the deal, allowing the company to pay off 100% of its debt, including trade debt, make a cash distribution to shareholders, and maintain substantial cash reserves for the expansion of its retail business.

[14][15] The Tully's Coffee board and management filed for Chapter 11 bankruptcy in October 2012, citing low cash reserves and the need to renegotiate leases with landlords.

[15] Global Baristas, an investment group led by actor Patrick Dempsey had the highest bid of US$9.15 million to buy Tully's at a bankruptcy auction on January 3, 2013.

[16] U.S. Bankruptcy Court Judge Karen Overstreet subsequently approved the sale to Global Baristas, rejecting objections from Starbucks and other prospective buyers.

[17] The deal became final on June 30, with all employees keeping their jobs and getting a bonus of two vacation days as a "thank you" for their commitment to the company.

[22] Later that month, many Tully's locations remained closed with eviction notices posted by landlords indicating the lack of payment.

[23] Tully's US coffeehouse business was officially closed when Keurig and Global Baristas entered a permanent injunction in September 2018.