If the performance of their existing locations is not sufficient to be able to utilize debt capital, then that means the new project is a bad idea for investors.
Assuming that they can raise debt, but this is their preferred option, then that means that they expect investor returns (ie what the founders are giving up) to be less than their cost of debt. Given that this is risk capital for the investors, that means that the founders are not expecting (or will never be willing) to give the investors more than 4-7% ROI.
Either of these scenarios indicates that an investor should laugh at them and walk away.
The first question that any investor should ask themselves in these situations is "why am I getting access to this investment". There are ALWAYS people who have looked at any investment you might do and rejected it for one reason or another. So you can assume that you aren't the smartest person at the table - but the game is to ensure you aren't the dumbest, either. This kind of investment literally puts you at the end of the investment opportunity food chain.