xFIP for relievers is troublesome because often relievers have HR/FB% lower than 10%. Franklin has a HR/FB% that is dramatically different from his career (so perhaps he might need to be adjusted as you suggest). However, he has also dramatically changed his repertoire this season which might explain some of it.
Also, Masset is having a career year in almost every category and he's likely to regress next season (though he's also dramatically changed his repertoire too... so maybe not). In '09 Massett has been basically Franklin (similar repertoire) with better velocity (so as you suggest '09 Masset smokes '09 Franklin).
All of that said, regardless of how much better Massett is than Franklin, the bigger question is still valid-he's better and the Reds picked him up as a castaway.