Franklin's a popular fighter with a big fan base, whos got skills and is usually pretty exciting. Dana knows this and probably won't boot him out of the UFC. Moving up to 205 wouldn't make sense for him because that division is stacked and I don't see Franklin as a contender in the LHW division. They could put him in the WEC to boost the fanbase over there or keep him around in the UFC fighting at 185 against the other guys, maybe someone beats Silva down the road and Franklin will get another shot at the belt if he strings enough wins together.
The WEC would make the most sense for him, he could move up to 205 and fight Marshall for the belt.