Can a franchisor terminate my agreement instead of approving a sale if they think the business is struggling?

This depends on whether the franchisor actually has independent grounds to terminate under your agreement, separate from the transfer request itself — a franchisor generally cannot simply terminate in place of approving a sale just because they'd prefer a different outcome, but if the business is genuinely in default (unpaid fees, brand-standard violations, or other breaches) independent of the sale, that default may give the franchisor grounds to terminate regardless of whether you're trying to sell.

This is where a struggling business and a pending transfer request can interact badly: a franchisor aware that you're trying to sell may be less willing to overlook or work through performance issues than they might have been otherwise, and pursuing termination can sometimes be more attractive to a franchisor than approving a transfer to an unknown new operator, particularly for a location they view as a poor performer regardless of who runs it.

Because this puts real pressure on timing and disclosure, address performance issues honestly and, where possible, before initiating a transfer request. A Treadstone business lawyer can assess your actual exposure and help manage the process.