This is a very risky situation. You probably won't have a complete understanding of why the location is losing money. Even if it appears that it is due to poor management and control which you could improve, the results may be due more to market circumstances: perhaps the location is on the wrong side of the street, the surrounding community has other more attractive alternatives, etc. In addition, the actual losses may be larger than stated by the seller. When an operation is losing money, the owner typically cuts back on maintaining property and equipment, which will then be expensive to bring up to standard by the new owner.