Marjorie Franklin was born in 1877 to a well-to-do family prominent in banking and liberal Jewish circles. Her family sent her to the House of Education in Ambleside, Cumbria to pursue a career in teaching, but Franklin instead chose to study medicine. After basic medical training, Franklin went to New York to study psychiatry under Adolf Meyer, a co-founder of the New York Psychoanalytic Society and the American Psychoanalytic Association. Franklin then moved to Budapest to study psychoanalysis with Sándor Ferenczi.
On her return to the UK she became an early member of the British Psycho-Analytical Society and took a series of honorary appointments at hospitals. She worked in London as a consultant psychiatrist at the British Hospital for Functional Nervous Disorders, the Howard League for Penal Reform, and the Institute for the Scientific Treatment of Delinquency (later the Portman Clinic), of which she was a co-founder together with Edward Glover, Grace Pailthorpe and Melitta Schmideberg.
Marjorie Franklin first became interested in the relationship between mental illness and the patient's environment while working as a junior medical officer at the Portsmouth Borough Mental Hospital in the early 1920s. She developed a therapeutic concept, which she called "Planned Environment Therapy" (PET). According to this milieu-therapy, theoretically inspired by positions of Donald Winnicott, Anna Freud, Otto Shaw and ID Suttie, non-authoritarian and accepting relationships are created within a community setting over seen by a psychoanalytically supervised staff team. In 1936 she put her theories into practice for the first time at the experimental Q Camp at Hawkspur, Essex. Franklin created the camp with her colleauge David Wills for the therapeutic treatment of 'maladjusted' young men. The camp was short lived, but it was followed by a second Q Camp for maladjusted boys in the 1940s led by Arthur Barron. Franklin also created a second project, the Children's Social Adjustment (CSA), which also followed the PET principles. In 1966 Franklin founded the Planned Environmental Therapy Trust (PETT) with David Wills and Arthur Barron to promote research, discussion and training regarding the PET approach. Franklin passed away in early 1975.