One big red flag is if the current owner is not willing to show you the financials of the business. This could mean that they are hiding something, such as not making as much money as they claim or carry a higher debt load than they are letting on.
Other red flags include an outdated or run-down-looking facility, lack of a consistent customer base, and high employee turnover. While not all of these things are deal breakers, they should be taken into consideration before making an offer on a restaurant.