They don't necessarily have to use operating cash flow to open a new location. If they have a rich enough backer, they can open as many locations as he's willing to pay for.
90% of businesses fail in the first year, and many of those are due to insufficient capital. Many businesses lose money in their first year due to start up costs and costs of attracting initial customers. If they can survive long enough to make any minor tweaks needed to keep customers coming back, and to keep paying on their debt, if any, for the startup, they have a much better chance. The second year is almost always better than the first.