Frenchman in good company will sometimes refer to themselves jokingly as "frogs", but otherwise the term is taken to be disparaging, offensive and in poor taste.
As for being racist, it certainly could be when used by a person of a different 'race" than the person referred to. It is more likely, however, to be considered a "hate" Word when used between people of the same race, say an Ontario Englishman to a Quebec Frenchman.
In any case, the term has no place in decent society.
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