Il s’appelle françois is the most used form, and is perfectly correct. This kind of verb is called a “verbe pronominal” because it is always used with a pronoun referring to the subject.
Il est appelé François is also correct, but it’s not a common way to speak. The passive voice makes it more suitable for classical literature or poetry than for everyday conversation. It could also mean that is real name is not François, but some people call him François anyway.
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