Jungle Java franchise near Ann Arbor closed after lawsuit over loan default
The Ann Arbor area franchise of Jungle Java, a play cafe for kids and their parents, abruptly closed its doors in late April in the wake of a lawsuit charging that the owners defaulted on a business loan.
Mocha Mountain is now operating out of the space formerly occupied by Jungle Java.
Laura Blodgett | For AnnArbor.com
Denver-based Native American Bank on March 14 filed a lawsuit in Washtenaw County Circuit Court against Jungle Java of Ann Arbor and franchise owners Eric Yelsma and Denise Yelsma, alleging that the business defaulted on an Oct. 25, 2006 loan agreement.
The original loan was for $500,000 plus interest, and the suit alleges the defendants still owe more than $349,000.
The bank is represented by local attorney William Tishkoff, who did not respond to a request for comment.
Eric Yelsma, who now owns Mocha Mountain, also did not respond to requests seeking comment, and Denise Yelsma was not available.
The corporate office of Jungle Java, which is based in Canton, last week sent an email to customers saying that its Ann Arbor location "has gone out of business and is no longer in operation."
The email indicated that "any passes, coupons, party deposits or any other JJ items of that nature may be redeemed at any other Jungle Java location."
The move comes after Jungle Java launched a new, 14,800-square-foot location in Clinton Township in March. The company plans to continue to operate its stores in Canton, Farmington Hills and Clinton Township.
The company, founded in 2002 by Denise Mehl, gives parents a place to have coffee and chat with other parents while their children have fun in the play place. Mehl could not be reached for comment.
Doug Conlin, general manager of Mocha Mountain, said the new cafe opened May 1. Conlin said the new cafe is maintaining Jungle Java's basic treehouse play structure and will slowly transition to a mountain theme, which will be reflected in the names of the food items and other decor.
“We realize competition is tight and moms and dads can go to a play center like McDonald's,” he said. “So our focus is making it clean and fun and having healthy snacks. We want to continue having a really nice play center and improve upon it.”
Some of those improvements include making small changes to the menu, such as replacing jumbo muffins with two-bite muffins.
“When kids are begging for a muffin, this is a better size for them and less expensive for parents,” Conlin said.
AnnArbor.com reporter Lee Higgins and freelancer reporter Laura Blodgett contributed to this story.
Contact AnnArbor.com's Nathan Bomey at (734) 623-2587 or nathanbomey@annarbor.com. You can also follow him on Twitter or subscribe to AnnArbor.com's newsletters.
Comments
GoblueBeatOSU
Wed, May 18, 2011 : 11:25 a.m.
So the bank makes a loan for $500,000. Lets assume the loan is for five years. To keep things simple lets assume that Java makes $1.00 profit per cup of coffee, which seems like a lot. For Java to break even Java needs to sell 274 cups of coffee every day (365 days) during the year. And that calculation doesn't allow the owners to take a penny out of the business. What kind of bank would make this loan? Of course it will be the big bad bank's fault because the loan couldn't be paid back. Although, in this case, maybe it is the bank's fault. Why would someone even ask a bank to make this loan? Of course if the bank doesn't make the loan then people are using this as an example that banks aren't lending. This deal was doomed from the start.
aamom
Wed, May 18, 2011 : 12:42 p.m.
FYI, they actually have a rather large menu (or used to anyway) with salads, soups, sandwiches, huge selection of snacks etc. All are very expensive (so your coffee profit may not be too far off) but extremely convenient. Then there is the admission fee. Then there are TONS of birthday parties that happen there every weekend. So I guess my point is there is much more being sold there than coffee as your scenario implies. The other JJ locations are doing fine so I guess I just don't buy your implication that this kind of establishment is never worthy of a bank loan.
Dr. Vag
Wed, May 18, 2011 : 10:05 a.m.
JJ was the best and if it's still open under a different name, we'll go.
major2mommy
Wed, May 18, 2011 : 1:48 a.m.
We usually get an 'anytime' pass for our kids during the winter time months. Hopefully this place will be in business and the quirks will be worked out. I will look forward to checking it out.
Joanne
Wed, May 18, 2011 : 1:17 a.m.
I'm more than willing to give this place a try. My grandkids loved going there and we will not stop now. They will not stop saying LONG LIVE MOCHA MOUNTAIN! The staff is very friendly and helpful and I can tell they are trying their best to help the customers.
larka
Tue, May 17, 2011 : 11:53 p.m.
I have already started hearing horror stories about how dirty Mocha Mt. is and how rude, or unresponsive at best, the staff is. Hopefully they will turn things around.
mathew day
Wed, May 18, 2011 : 1:34 a.m.
Keep in mind, there might be legal reasons the staff cannot go into detail about what is going on with the business. Their job is to serve the customers, not to dish local gossip.
Joanne
Wed, May 18, 2011 : 1:09 a.m.
What are you talking about? I've only had the best experiences here with the staff. My grandkids absolutely love this place and we will never again visit another Jungle Java.
ViSHa
Tue, May 17, 2011 : 9:02 p.m.
so are they in default of the loan? are they claiming they are not? i don't know that i would want to go to the new business until this is settled, or am i missing something?
f4phantomII
Tue, May 17, 2011 : 8:52 p.m.
A germ exchange by any other name.
JuliaAnnArb
Tue, May 17, 2011 : 8:37 p.m.
I had wondered what was going on over there. Those who don't understand the business model probably don't have small children at home during the long, long winter. It's one of a couple of indoor places where we can go for them to get some exercise. My complaint with this location is that it's gotten pretty grimy over the past few years. If you climb into the structure you can see all the accumulated dust, popped balloons, socks, and barrettes that are outside the structure and never cleaned up. The Treehouse in Chelsea is much cleaner, but is not big enough to keep my 5-year-old interested.
hypsi
Tue, May 17, 2011 : 11:24 p.m.
If your looking for a bigger place, try Zoobilee in Ypsi. Big enough for both my 7 and 5 year old to enjoy and well me too :] I think they are still open, it would be worth checking out.
pegret
Tue, May 17, 2011 : 5:19 p.m.
The TreeHouse in Chelsea has been using the healthier approach for several years. Coffees and wireless for the grown-ups, and a very creative and clean playplace for kids. I always liked it a lot better than JJ, plus it's locally owned.
mathew day
Wed, May 18, 2011 : 1:31 a.m.
Actually, it has always been a locally owned business. The owners, Shelly and Eric Yelsma, live in Saline.
Justin Joye
Tue, May 17, 2011 : 5:53 p.m.
Now that Jungle Java has become the Mocha Mountain, it is now a locally owned business. They are also taking a step in the right direction by fixing a lot of issues. I spoke to Doug Conlin, the new General Manager, and he seems like a good guy. Besides, the Tree House in Chelsea is way too small and the food isn't that good.
bgl_fan
Tue, May 17, 2011 : 5:03 p.m.
I took my son to that location over the winter. We had to leave a lot sooner than planned because the roof was leaking in several spots and the guy that was working didn't seem to care. We will stick to the Canton location.
81wolverine
Tue, May 17, 2011 : 4:50 p.m.
It kind of baffles me how this business model can be successful, but what do I know? However, having been a franchise owner for over 15 years (not this one fortunately), it's normal to have a clause in the franchise agreement that prevents a franchisee from opening a similar business after closing their original franchise - usually within a certain time frame like 2 years. Otherwise, a franchisee could use that ploy to get out of paying royalty payments after learning how to operate the business from the franchise training materials. Maybe Jungle Java Inc. wasn't that smart.
1bit
Wed, May 18, 2011 : 2:07 p.m.
The business model can make money, plus they got a loan in good times. What I find odd it that they closed and then reopened in the same location but under another name. If they filed bankruptcy, then their creditors (including the bank) would get dibs on the equipment, etc (which I assume they would have put a lien upon). If they are just changing name to get out of the JJ franchise and using a different name as a DBA then they need to keep their payments on the loan going.
John B.
Tue, May 17, 2011 : 5:12 p.m.
Agreed. I drive past this location frequently, and when it opened I wondered how it could survive, and that was back when the economy was still booming. Perhaps this is one of those businesses that could have survived in better times? Also agreed about the non-compete-clause issue....