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                                                                  EXHIBIT 99.1

FOR IMMEDIATE RELEASE


                              JOHN MARTIN TO JOIN
                       DIEDRICH COFFEE AS BOARD CHAIRMAN

                TIM RYAN, FORMER MARTIN COLLEAGUE AT TACO BELL,
                TO BECOME PRESIDENT AND CHIEF EXECUTIVE OFFICER

        IRVINE, Calif., November 18 -- Diedrich Coffee Inc. (NASDAQ: DDRX),
operator of 37 specialty coffee houses in California, Texas, and Colorado,
announced today that former Taco Bell Worldwide Chairman and CEO John Martin has
agreed to join the company's Board of Directors as chairman.

        Subject to shareholder approval, John Martin and the company's existing
board agreed to terms under which John Martin will invest $1,000,000 in Diedrich
Coffee. The transaction, pursuant to a private sale of restricted stock, will
make Martin one of the company's largest shareholders with approximately seven
percent of Diedrich Coffee's common stock; factoring in 50,000 shares of
Diedrich Coffee stock previously held by Martin.

        The company also announced that it has named experienced restaurant
industry executive Tim Ryan, former president of Sizzler USA, and a former
colleague of Martin's at Taco Bell Worldwide, as Diedrich Coffee's president and
chief executive officer. Ryan will also join Diedrich Coffee's Board of
Directors and invest directly in the company.

AN EYE TO THE FUTURE

        "During the past six months, the Board of Diedrich Coffee conducted an
intensive search to identify a permanent chairman, as well as a CEO, who
together could work with the new management team we've assembled to help take
Diedrich Coffee to the next level," said Larry Goelman, out-going chairman and
CEO of the company. Goelman, who has served in those capacities on an interim
basis since March of this year, added that: "Both John and Tim possess the kind
of in-depth experience Diedrich Coffee needs in managing and growing large scale
operations. That wealth of experience, combined with the excellent quality,
character and heritage of our coffee products, positions us extremely well to
expand once again, and do so very successfully."


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        Goelman, who will remain an active member of the board, said that he
expects to quickly transition his responsibilities over to Martin, widely
regarded as a visionary senior executive in the restaurant industry and retail
field.

        During his 13 year tenure at Taco Bell, from 1982 to 1996, John Martin
grew the Mexican-style quick service restaurant company from $600 million in
sales, and 1,500 locations, to more than $4.5 billion in sales with in excess of
25,000 outlets worldwide. After leaving Taco Bell Worldwide at the end of 1996,
Martin became president of PepsiCo's Casual Dining Division.

        Besides his new position as chairman of Diedrich Coffee, Martin is
chairman of publicly-traded Newriders Inc., which owns and operates Easyriders
Cafes, and chairman of privately-held Pacific Restaurant Ventures, an upscale
dining entity based in Newport Beach, California.

RYAN TO OVERSEE DAY-TO-DAY OPERATIONS AS CEO

        Martin said that in his position as chairman of Diedrich Coffee, he
intends to provide "overall strategy, vision and support." Tim Ryan, as CEO,
will manage the company on a day-to-day basis.

        "I've been interested in Diedrich Coffee since I moved to Orange County
years ago," said Martin. "It's an absolute gem from a brand standpoint, and like
those who've helped found and build the company, Tim Ryan and I see tremendous
potential to grow the Diedrich Coffee name to a national level."

        Tim Ryan, like Martin, brings a wealth of experience managing larger
operations. Ryan, who was senior vice president of marketing at Taco Bell
Worldwide while John Martin was president, guided Taco Bell's marketing efforts
during a time of record sales growth. Later, he was named senior vice president
of Taco Bell's Casual Dining Division and was responsible for overseeing
operations for, and consulting with, both well known and new concepts like
California Pizza Kitchen, Chimayo Grill and Chevy's. In his most recent capacity
as president of Sizzler USA, Ryan helped guide the company through its recent
turn-around efforts. During his 23 year career, Tim also served as executive
vice president of Olive Garden restaurants and president of Magic Pan
Restaurants.

        "Both John and Tim share the same enthusiasm that we all have for
Diedrich Coffee," Goelman said. "They see what we see - an absolutely wonderful,
high quality product that can be, and deserves to be, enjoyed in many more
places than it is today."

        Goelman said that Martin Diedrich, the company's current vice chairman
and chief coffee officer, will continue in those capacities.

        "Martin Diedrich will play an even larger role in setting and monitoring
Diedrich Coffee's strict quality standards," said Goelman. Goelman also said
that Kerry Coin will continue as the company's chief operating officer. "Kerry
has done well in helping to stabilize operations and execute the Board's
turn-around strategies.




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        "I can say without reservation that Diedrich Coffee in the hands of a
superb management team, one that combines all of the most important attributes
for success in our business - experience growing brand-based food concepts,
proven concept development experience, specific knowledge of the food service
and coffee industries, vision and creativity in operations, and vast franchising
experience and contacts," Goelman said.

        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. The company's 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 price and
availability of coffee and other raw materials, successful execution of the
company's expansion plans, impact of competition, the availability of additional
financing and other risks and uncertainties described in detail under "Certain
Factors and Trends Affecting Diedrich Coffee and Its Business" in the company's
annual report on form 10-K for the fiscal year ended January 29, 1997, and in
the company's 10-Q. Copies of this annual report are available from Diedrich
Coffee's investor relations representatives.



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                           CONFERENCE CALL INVITATION
                                NOVEMBER 18, 1997


Diedrich Coffee will host a conference call for interested investors and
analysts at 1 p.m. Pacific Standard Time, Tuesday, November 18, 1997. The call
will discuss events related to this media announcement. To participate in the
call, please dial:



                                 1-800-263-9153
                               Host: Larry Goelman
                            Chairman, Diedrich Coffee



For more information, contact:

David Paine
Paine & Associates
714-755-0400




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