Frailty is not based on a true story. It's a work of imagination and creative writing by the people involved in making the movie. There are no real-life events that it directly draws from.
It's a bit of both. The core concept of Frailty could have roots in true incidents, but the plot and details have been fictionalized and developed for the purpose of entertainment.
I don't have enough information to determine if it's a good story. However, if it can make the readers or viewers empathize with the characters' frailty based on real - life situations, and if it has a strong narrative arc that builds around this frailty, then it has the potential to be a very good story. On the other hand, if it's too preachy or the true story part seems forced, it may not be as appealing.