"He's not surprised this came out," the source explains. "He actually reached out to multiple former students from his class, so he could speak to them. He is genuinely remorseful."
A second source confirmed to ET that The Disaster Artist actor-director is "distressed," but it's not due to guilt.
"This has been incredibly difficult to deal with and navigate, not because he feels guilty [but because] he is navigating this situation and wants to ensure he is doing the right thing, supporting the movement and not undermining any women," the source says.
The source also noted that Franco is maintaining "that the accusations against him are false," saying, "He has evidence that would support this but has no intention to release that, because he doesn't want to be silencing someone and he doesn't want anyone to feel silenced. As he said to Seth Meyers, he cares about the movement so much he's willing to take a hit rather than be someone who silences women."
"He has the support of many people in the industry, including Ashley Judd, and his family and friends are helping him navigate this situation," the source added.
Franco also will not be hiding, as he still plans to attend the SAG Awards on Jan. 21, as "there is no reason not to."
"He will carry on supporting the cause and moving forward," the source concluded.
ET has reached out to Franco's rep for comment.
As previously reported, five women, including four former students, accused Franco of "inappropriate or sexual exploitative behavior" in an article published by The Los Angeles Times. He was accused of an "abuse of power," and of "storming off" when two female acting students wouldn't take their tops off for a scene. One student claims, "He would always make everybody think there were possible roles on the table if we were to perform sexual acts or take off our shirts."
Franco's attorney, Michael Plonsker, disputes all of the women's allegations, including the ones above.
The report came shortly after the Palo Alto, California, native was criticized for wearing a "Time's Up" pin while accepting the Best Actor in a Musical or Comedy award for his portrayal of Tommy Wiseau in The Disaster Artist at the 75th Annual Golden Globe Awards. The pin was created as a symbol for the movement, which brings awareness to gender inequality and sexual harassment issues that have long plagued Hollywood.
Franco was a guest on The Late Show With Stephen Colbert just two days after the Globes, where he addressed the backlash. However, this was before the Los Angeles Times report was published.
"In my life, I pride myself on taking responsibility for things that I've done. I have to do that to maintain my well-being," Franco -- who was noticeably absent from the Critics' Choice Awards last week -- said. "I do it whenever I know that there's something wrong or needs to be changed. I make it a point to do it."
"The things that I heard were on Twitter are not accurate, but I completely support people coming out and being able to have a voice, because they didn't have a voice for so long," he added. "So I don't want to shut them down in any way. I think it's a good thing and I support it."
He publicly addressed the allegations again one day later, while appearing on Late Night With Seth Meyers. "There are people that need to be heard. I have my own side of this story, but I believe in these people that have been underrepresented getting their stories out enough that I will hold back things that I could say, just because I believe in it that much," he shared. "So if I have to take a knock because I’m not going to try and actively refute things, then I will, because I believe in it that much.”