Lets say mussolini is suddenly has a spurt of sanity and decides after his annexations of Albania & Ethiopia he stops thare and does not cause any more trouble until war breaks out. The war goes on like usual france falls,battle of britian... mussolini says he is considering joining the germans in the war and he will unless several territorial issues are settled.
the allies respond that they will not give him all he wants ( malta,egypt,girbaltar,suez...) the brits kick sand in the face of the frence make several concessions of french colonies (tunisia,Djibouti,syria,madasgar,french guyana) will all go to italy & allies recoginize italian annexation of albani ,ethiopia
Musso wants more but the brits tell him take it or leave it and risk war.
Would the brits offer such terms? the french wouldnt like the terms but what could they do? (NOTHING)

could this push the french into the axis quicker?

might spain look for some concessions of colonies(rest of morocco)