Can my buyer back out if the franchisor's approval conditions turn out to be too strict?

Generally, yes, if your purchase agreement is drafted to allow it — whether your buyer can walk away over onerous franchisor conditions depends entirely on how the agreement treats franchisor approval as a closing condition, not on some general rule about what counts as "too strict." Purchase agreements for a franchised business commonly make obtaining franchisor consent a condition of closing, and some go further, giving the buyer the right to reject the deal if the conditions attached to that consent are materially more burdensome than what was reasonably expected when the deal was signed.

Without that kind of protection built in, a buyer may be stuck either accepting whatever conditions the franchisor imposes or breaching the purchase agreement by refusing to close, which puts them in a much weaker position. This is exactly why the consent condition needs careful drafting upfront, addressing not just whether consent is obtained, but on what terms.

Because franchisor conditions can be unpredictable until the approval process is actually underway, build meaningful protection into your purchase agreement from the start. A Treadstone business lawyer can help draft a condition that accounts for this risk.