I've seen this error and do not use Franklin Gothic Demi, so I don't think it's specific to that font. I've also encountered it in paragraphs that have no overrides or character styles applied at all.
It seems like the spell checker makes the assumption that your most likely error is omitted spaces, if it can find any smaller words in your misspelled word. If the assumption were instead that your most likely mistake was to have misspelled a single word, the first suggestion would more often be correct. -- Shane Taylor | Technical Writer WebAssign | 919.829.8181 x147