Using Debt Responsibly

Smart Growth, Strong Foundations: Responsible Debt Practices for Himes Franchise Owners

Running a restaurant business means making strategic financial decisions—particularly around how you fund growth, manage capital, and build long-term value. At Himes Breakfast House, we believe in an ownership model that combines solid fundamentals with disciplined investment.

1. Financing growth with discipline — why it matters

While the broader restaurant industry has seen many operators leaning heavily into growth with significant debt loads, at Himes we take a more measured approach. Our goal: franchise partners who thrive in both strong and slower economic cycles, backed by manageable capital commitments, predictable costs, and a proven brand model.

By keeping startup investment and ongoing fixed costs lower than many competitors, Himes helps owners avoid scenarios where debt service becomes a drag. Instead, you build equity, enjoy recurring revenue, and control your financial path.

2. Investing in yourself: Rollover for Business Start-Ups (ROBS)

One smart funding strategy for new business owners is the ROBS structure (Rollovers as Business Start-Ups). With ROBS, you can roll existing retirement savings into a new entity (typically a C-corporation), establish a qualified 401(k) in that corporation, and then purchase stock in the business—effectively using your retirement fund to invest in yourself rather than taking on high-interest debt.

For Himes franchisees, this can be an especially compelling option:

• It allows you to use existing retirement savings without penalties by rolling existing funds into your new corporation.

• It allows you to avoid traditional financing and the added debt service that can strain early cash flow, giving your new Himes location more breathing room during the startup phase.

• It aligns ownership mindset with brand success—when you’ve invested in yourself, you’re motivated to build the business long term.

ROBS comes with its own considerations (such as retirement-asset risk and compliance requirements), so we recommend working with your financial advisor or attorney to evaluate it. But as part of the Himes funding toolkit, it adds flexibility and control.

3. Real-estate strategy: SBA 504 loans + building equity

Another smart route is structuring your real-estate investment with long-term stability in mind. The SBA 504 loan program offers fixed-rate, 10–25-year financing for purchasing buildings or land—an attractive option for owners who want to replace rent with equity.

Here’s how it benefits Himes franchisees:

• You replace rent + debt service with a single mortgage payment. Instead of paying rent to a landlord and carrying separate startup debt, you consolidate your cost structure into one predictable mortgage payment that directly replaces what would have been monthly rent.

• You build equity instead of paying into someone else’s asset. Each payment increases your ownership stake, strengthening your balance sheet over time.

• You eliminate rent escalations and lease uncertainty. Owning the site shields you from annual increases, renegotiation risks, or the operational disruption of forced relocation.

• Our lower startup costs make property ownership more accessible. Because the Himes model requires less capital to open than many full-service breakfast brands, franchisees have more flexibility to pursue a 504-supported real-estate purchase without overextending.

Owning the building isn’t required, but for the right operator it’s a powerful way to create long-term stability, simplify cash flow, and build real wealth alongside the restaurant business.

4. Better cash flow = stronger resilience

Smart operators know that the foundation of long-term success is disciplined debt management. When you structure your financing intentionally—keeping fixed payments predictable and avoiding unnecessary layers of debt—you set your business up for healthier cash flow, stronger margins, and greater stability over time. A well-run restaurant can weather market shifts when its financial base is steady.

Here’s what that looks like for Himes franchise owners:

• A disciplined debt structure protects cash flow. By avoiding excessive or overlapping loans, your monthly obligations stay manageable, giving you room to reinvest, adjust, and grow.

• Replacing rent with a stable mortgage strengthens your position. Site ownership turns a volatile expense into a predictable long-term payment, improving your ability to plan and absorb fluctuations in sales.

• Every payment builds value. Instead of rent disappearing from your balance sheet each month, mortgage payments build equity—creating an asset that increases your net worth over time.

• You operate from a position of strength, not fragility. Whether sales are booming or simply steady, a disciplined debt load keeps you flexible, resilient, and equipped to pursue growth opportunities such as additional units or remodels.

In short, responsible financing isn’t just a defensive strategy—it’s a growth strategy. It positions you for longevity, stronger cash flow, and the financial stability needed to build a future in the restaurant business.

Conclusion

Choosing the right franchise is not just about the brand—it’s about building a business you can own, manage, and grow over time. With Himes Breakfast House, your investment is grounded in a model that emphasizes operational excellence, manageable startup costs, and real-world financial strategies for long-term success.

If you’re ready to build your business on strong foundations—without the anxiety of oversized debt obligations—let’s talk. Join us at Himes and be part of a brand that’s set up to win in the breakfast daypart, with you as the owner-operator at the helm.