Found family is a group of people bound by choice rather than blood, friends, colleagues, neighbours, a team, who show up for one another the way family is supposed to. In romance it is often the warm frame around the love story.
The phrase came out of fan communities and moved into romance because it names something real. Not everyone has a family that holds. The story provides one: people who turn up when it counts and stay when it gets awkward.
You'll recognise it by recurring side characters with their own weight, a table, a bar or a locker room where everyone gathers, and a love story that gets commented on, guarded and occasionally shoved forward from the outside.
In a story where you're the lead, found family assembles chapter by chapter. The people you talk to remember what passed between you, and someone who helped you once is still there next time. Whether a side character becomes a confidante is a matter of what you say to her.
At Everglow you do not just read it. You are the protagonist, and every chapter ends with your move.