EXHIBIT 99.1


                         DIEDRICH COFFEE REPORTS SALE OF
                  INTERNATIONAL FRANCHISE OPERATIONS COMPLETED

IRVINE, Calif., Feb 11, 2005 -- Diedrich Coffee, Inc. (Nasdaq: DDRX) today
announced that it has completed the sale of its Gloria Jean's international
franchise operations to Jireh International Pty. Ltd., formerly the Gloria
Jean's master franchisee for Australia, for $16 million USD in cash. Under
related license and consulting agreements the Company will also receive
$7,020,000 USD over the next six years. The Company had previously announced
this pending transaction on December 6, 2004.

After all payments have been made to Diedrich Coffee under the license and
consulting agreements, all remaining Gloria Jean's trademarks, including those
in the U.S., will be transferred to Jireh. Concurrent with such future transfer,
the Company, through it's U.S.-based Gloria Jean's subsidiary, will then enter
into a perpetual royalty-free master franchise agreement with Jireh under which
the Company will continue to have exclusive rights to operate, franchise and
develop Gloria Jean's locations throughout the United States and Puerto Rico,
and to continue its wholesale operations under the Gloria Jean's Coffees brand
in these same markets.

As of February 11, 2005, there were 475 Gloria Jean's retail locations
worldwide, including 242 in Australia, and 147 in the United States. As a result
of this transaction closing, all Gloria Jean's Coffees locations outside the
U.S. and Puerto Rico are now affiliated with Jireh. The Company's domestic
Gloria Jean's outlets will not be materially affected by the sale of the
international trademarks and franchises. The Company's 55 Diedrich Coffee and
Coffee People company-operated units, it's Castroville roasting facility, and
its wholesale operations are also not materially affected by this transaction,
except that the Company has agreed to not compete internationally through it's
Diedrich Coffee and Coffee People brands for a period of two years.

About Diedrich Coffee

With headquarters in Irvine, California, Diedrich Coffee specializes in
sourcing, roasting and selling the world's highest quality coffees. The
Company's three brands are Gloria Jean's Coffees, Diedrich Coffee, and Coffee
People. The Company's 200 domestic retail outlets, the majority of which are
franchised, are located in 35 states. Diedrich Coffee also sells its coffees
through more than 460 wholesale accounts including office coffee service
distributors, restaurants and specialty retailers, via mail order and the
Internet. For more information about Diedrich Coffee, call 800/354-5282, or
visit the Company's Web sites at www.diedrich.com,www.gloriajeans.com, or
www.coffeepeople.com.

Forward-Looking Statements

Statements in this news release that relate to future plans, financial results
or projections, events or performance are forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, and fall under the safe
harbor. Actual results and financial position could differ materially from those
anticipated in the forward-looking statements as a result of a number of
factors, including, but not limited to, the successful management of Diedrich
Coffee's growth strategy, risks that arise in the context of operating a
business with significant franchise




operations, the impact of competition, the availability of working capital and
other risks and uncertainties described in detail under "Risk Factors and Trends
Affecting Diedrich Coffee and its Business" in the Company's annual report on
Form 10-K/A for the fiscal year ended June 30, 2004.

Information Contact:
Marty Lynch, Chief Financial Officer
(949) 260-6788


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