Franklin takes its name from Tasmanian Lieutenant-Governor and polar explorer Sir John Franklin and his wife Lady Jane. The Franklins bought half of John Giles Price’s grant of Crown Land in the area, subdivided it to settle families of relatively modest means and had a ketch built to provide a direct link between the settlement and Hobart. Price was the notorious Muster Master of convicts in Hobart and Commandant on Norfolk Island (1846-53) reputedly the model for the Commandant in Marcus Clarke's For the Term of His Natural Life. Price may have been haughty and authoritarian, but he got on well with the more liberal-minded and progressive Franklins and married into the family.
The town was originally named Huon when the Post Office opened on 31 August 1848, and successively renamed Franklin-Huon in 1853 and Franklin in 1878.
Franklin was the major town in the Huon Valley until the 1930s, boasting a number of jetties, its own Court House (recently transformed into a gourmet café), and its own hydroelectric power station, driven by a local creek. Improved road access across the Sleeping Beauty Range between the Huon Valley and Hobart saw Huonville overtake the town as the regional centre.