Science Bob does a variation of the lava lamp.  The questions he asks at the end can be a basis for a hypothesis.  Your can help your daughter construct her own questions, based on what she used to create her lava lamp:
http://www.sciencebob.com/experiments/lavalamp.php
 
Info on constructing a hypothesis:
http://www.sciencebob.com/sciencefair/scientificmethod.php

To come up with the hypothesis, look at the scientific principle involved with this activity.  I think Fritzr listed them out in his comment pretty well:
 
"This project demonstrates a number of different principles.  The first is is that the molecules of water do not mix with the molecules of oil no matter how much you shake the bottle.  The food coloring only mixes with the water which is why it doesn't color the oil.  The second principle demonstrated is density.  Water is denser (heavier) than oil which is why the water sinks to the bottom when you pour it in.  It's also why oil floats on top of the water if a ship spills oil in the ocean.
  
Alka-Seltzer reacts with the water to create tiny bubbles of carbon dioxide gas.  The bubbles attach themselves to blobs of colored water and cause them to float upwards.  When the bubbles reach the surface and pop the color blobs sink back to the bottom."
 
For instance you could hypothesize about densities of liquids: try adding different liquids and see which ones sink.  Or you could try adding no alka-seltzer, then add varying amounts and speculate on why the water bubbles rise (Fritzr gives a good reason).  See what evidence you can collect that this is indeed what is happening.

Hi Cutina, In addition to the resources already suggested by another JustAsk member....
 
Education.com also has an info center that you may find helpful as you assist your daughter with her science fair project(s):
 
http://www.education.com/topic/help-child-with-science-fair-projects/
 
Included is an article about the scientific method (with info to help formulate the hypothesis):
http://www.education.com/reference/article/Ref_What_Scientific/
 
Hope all goes well with your daughter's project!