It's all about profit...
Profit. Profit. Profit. That is all you are buying. When you are looking at potential shops, what you are really looking for is proof of profit. Assess its takings, verify its rent, wages and overheads and see whether you can achieve an acceptable return on investment.
The value of a retail food business is inextricably linked to its profit. Check for valuer drivers such as a long lease on good terms (remember the 6% target for rent) short trading hours, low competition and a simplicity of the business model. Be on the look out for value detractors like demolition or relocation clauses, high rents or a heavy wage book. 
Should I do a trial?
Yes. Two reasons. First you have to live and breathe the business to see (and feel) how it runs. Training is usually undertaken while you are completing the trial, and it gives you a chance to be introduced to suppliers and delivery people. Second, and more importantly, it lets you observe and verify the takings.
Having said that trials are not perfect. Never rely on a trial alone. Always verify takings with reference to fixed costs and the cost of goods. This is where a sharp accountant is invaluable.
The agent keeps talking about "potential"...
If you are looking for a business being sold below market with room to improve, then you are looking for potential. Agents like to say that every business has potential, but true potential is hard to find.
Ask yourself how you can improve the business. How can you run this business better?
Fixed costs like rent only go up, but changing suppliers, the staff roster, the menu or the management can mean a huge difference in the bottom line.
Potential basically means the chance to make more profit than the existing operator and increase the capital value of the business as an asset.
What should I be looking for?
Profit. Watch out for anything that can affect your bottom line.
Never accept a demolition and relocation clause as minor or standard.
If you take over a shop with a demolition clause in the lease, there is no guarantee that you will still be there in six months. That means that you would have to recoup your investment and make a reasonable return on investment within that time - impossible (sad but true).
If you are not comfortable with the risk, then move on.
Trying to undo a bad decision costs plenty of money, and can set you back years.
Get advice from lawyers who know and love working with retail businesses. Know any?
