Among those he beat is Tully's much bigger Seattle neighbour, Starbucks, known for its ubiquitous white cups with a circular green mermaid logo.
Dempsey, whose company Global Baristas plans to keep the Tully's name, declared victory on the social media site Twitter, saying: "We met the green monster, looked her in the eye, and...SHE BLINKED! We got it! Thank you Seattle!"
The win for Dempsey deals a rare setback for Starbucks on its home turf. Starbucks has long been both praised for bringing "coffee house culture" to the US and criticised for crushing smaller chains.
The coffee giant, which had planned to convert the Tully's cafes to its own brand, announced plans last month to expand its global footprint to 20,000 cafes over the next two years, up from the current 18,000.
Dempsey said in an interview that as the underdog in Seattle, Tully's would need to find its identity. "It's a much smaller chain that has a lot of potential that hasn't been given the proper care," he said.
But in a statement shortly after Thursday's auction, Starbucks suggested that Dempsey should not celebrate just yet. Starbucks said that a final determination on the winning bid would not be made until a court hearing on January 11. It said it was in a "back-up" position" to buy 25 of the 47 Tully's cafes, with another undisclosed bidder making an offer for the remainder.
The combined bids of Starbucks and the undisclosed bidder come to 10.6 million dollars, above the 9.2 million Dempsey's company is offering to pay through his company, which was formed to purchase Tully's. The other investors in Global Baristas are not being disclosed.
Tully's Coffee, which is known for serving coffee with a milder taste than Starbucks brand, filed for bankruptcy protection in October, citing lease obligations and underperforming stores.