[guided]We must check two things before calling $\operatorname{Fr}(E)$ a smooth manifold: the coordinate changes must be smooth, and the topology defined by the coordinates must satisfy the manifold separation and countability axioms.
First consider two vector bundle charts $(U,\Phi)$ and $(V,\Phi')$. For $p\in U\cap V$, define
\begin{align*}
g_{\Phi'\Phi}:U\cap V\to GL_r(\mathbb R),\quad g_{\Phi'\Phi}(p)=\Phi'_p\circ \Phi_p^{-1}.
\end{align*}
Why is this a smooth map into matrices? This is part of the compatibility requirement in the definition of a smooth vector bundle, but we spell out the coordinate verification. In the two bundle charts, the transition map is a smooth map
\begin{align*}
F:(U\cap V)\times\mathbb R^r\to (U\cap V)\times\mathbb R^r
\end{align*}
with $F(p,v)=(p,H(p,v))$, where $H$ is smooth and, for fixed $p$, the map $v\mapsto H(p,v)$ is linear. If $(e_1,\dots,e_r)$ is the standard basis of $\mathbb R^r$, then the $j$th column of the matrix of $g_{\Phi'\Phi}(p)$ is $H(p,e_j)$. Each map $p\mapsto H(p,e_j)$ is smooth because it is obtained by restricting the smooth map $H$ to the smooth constant section $p\mapsto (p,e_j)$. Thus all matrix entries of $g_{\Phi'\Phi}$ are smooth functions, so $g_{\Phi'\Phi}:U\cap V\to GL_r(\mathbb R)$ is smooth.
We also name the reverse transition function explicitly:
\begin{align*}
g_{\Phi\Phi'}:U\cap V\to GL_r(\mathbb R),\quad g_{\Phi\Phi'}(p)=\Phi_p\circ (\Phi'_p)^{-1}.
\end{align*}
This satisfies $g_{\Phi\Phi'}(p)=g_{\Phi'\Phi}(p)^{-1}$ for every $p\in U\cap V$. Now compute the frame-coordinate overlap. If $(p,A)\in (U\cap V)\times GL_r(\mathbb R)$ represents the frame $\Phi_p^{-1}\circ A$, then applying the $V$-coordinates gives
\begin{align*}
(\Psi_V\circ\Psi_U^{-1})(p,A)=(p,\Phi'_p\circ\Phi_p^{-1}\circ A)=(p,g_{\Phi'\Phi}(p)A).
\end{align*}
This map is smooth because it is built from the smooth transition function $g_{\Phi'\Phi}$ and smooth matrix multiplication in $GL_r(\mathbb R)$. The inverse is
\begin{align*}
(p,B)\mapsto (p,g_{\Phi\Phi'}(p)B).
\end{align*}
Hence the frame charts are smoothly compatible. The domains $q^{-1}(U_i)$ cover $\operatorname{Fr}(E)$ because every frame lies over some point of $M$, and the trivializing sets $U_i$ cover $M$. The image of each chart is $U_i\times GL_r(\mathbb R)$, which is open in the model manifold $U_i\times \mathbb R^{r^2}$ because $GL_r(\mathbb R)$ is open in $\mathbb R^{r^2}$. Therefore the standard atlas construction criterion from the definition of a smooth manifold applies once we check Hausdorffness and second countability.
It remains to verify the topological hypotheses in the definition of a smooth manifold. Since $M$ is a smooth manifold, it is second countable, and every open cover of $M$ has a countable subcover. Applying this to the cover by vector bundle trivializing neighborhoods, choose a countable trivializing cover $(U_i,\Phi_i)_{i\in\mathbb N}$. For each $i\in\mathbb N$, choose a countable basis $\mathcal B_i$ for the second-countable model space $U_i\times GL_r(\mathbb R)$. The countable family
\begin{align*}
\mathcal B:=\{\Psi_{U_i}^{-1}(B):i\in\mathbb N,\ B\in\mathcal B_i\}
\end{align*}
is a basis for the atlas topology. To see this, let $W\subset\operatorname{Fr}(E)$ be open in the atlas topology and let $\nu\in W$. Choose $i$ with $\nu\in q^{-1}(U_i)$. Since the charts are compatible, $W\cap q^{-1}(U_i)$ is open in the $\Psi_{U_i}$-coordinates. Therefore some $B\in\mathcal B_i$ contains $\Psi_{U_i}(\nu)$ and satisfies $\Psi_{U_i}^{-1}(B)\subset W$. Hence $\operatorname{Fr}(E)$ is second countable.
Before using base-space separation, note that $q$ is continuous in this topology. On each chart domain $q^{-1}(U_i)$, the coordinate expression of $q$ is the first projection $\operatorname{pr}_1:U_i\times GL_r(\mathbb R)\to U_i$, which is continuous. Therefore the preimage under $q$ of any open subset of $M$ is open in $\operatorname{Fr}(E)$.
For Hausdorffness, take two distinct frames. If they lie over distinct points of $M$, separate those base points by disjoint open subsets of $M$ and pull the separating neighborhoods back by the continuous map $q$. If they lie over the same point $p$, choose a trivializing chart $U_i$ containing $p$; the two frames have distinct images in the Hausdorff space $U_i\times GL_r(\mathbb R)$, so they have disjoint coordinate neighborhoods. Thus the atlas defines a Hausdorff, second-countable smooth manifold structure on $\operatorname{Fr}(E)$.[/guided]