The 35-year-old bumped into Lucy Clode, from Dollar, while she was on holiday in New York and a series of messages exchanged by the pair on Instagram appeared to show him asking where the 17-year-old was staying and whether she had a boyfriend.
The conversation continued via text message, with the actor asking whether he should "rent a room".
In an interview on Live! With Kelly and Michael, Franco said he felt "awkward and embarrassed" about the encounter. "I guess I'm just a model of, you know, how social media is tricky," he said. "It's a way people meet each other today. But what I've learned, I guess just because I'm new to it, is like, you don't know who's on the other end.
"You meet somebody in person and you get a feel for them but you don't know who you're talking to, and, you know? So I used bad judgment. I learned my lesson."
Lucy, who attends Dollar Academy, was visiting New York with her mother as an early 18th birthday present. She met Franco outside his Broadway show Of Mice and Men and after she took a photograph of them together he asked her to tag him on Instagram.
Some have questioned whether the incident was a stunt to promote Franco's forthcoming film, in which he plays a teacher who starts a relationship with a teenage student.
But Franco appeared to dismiss the suggestion. "Unfortunately, in my position, I mean ... I have a very good life, but not only do I have to go through the embarrassing kind of rituals of kind of meeting someone, sometimes if I do that then it gets, you know, published for the world," he said.