You need to go through the exam that she sat and work out why she didn't perform better - was it many small careless errors that added up, or was it some questions that she just didn't know how to do at all? Was she better on practical, worded problems, or more abstract questions? If she is generally good at maths, and understands the higher level/abstract problems, doesn't mind working out what to do, etc, then she might be able to start in the higher set and if she continues to struggle, move down to the lower one. In my experience, schools are more reluctant to move a foundation set student up to a higher one once they have started, as there is a lot of content to catch up on. On the other hand, spending too long in a higher set where she isn't following at all might mean that she's missing out on consolidating the foundation work, or spending inordinate amounts of time on maths that could be spent on other subjects.
There are lots of past papers for higher and foundation level GCSE online, and you could look through those to see what she needs to do, and how much she's prepared to work. Some students up to about Year 8 or 9 are still working the way they did in primary school ,where with common sense, you can figure out a lot of maths, and once you've understood it, you don't need to do a lot of revision. Then when they get to secondary, and there are a lot more topics in maths, they do sometimes need to do some revision on these - actually learning the names of angle rules, properties of shapes, terms in statistics, what words like factorise mean, etc etc., and if they are still just assuming that they will remember everything after being taught it, they can be in for a surprise. Luckily those situation can be quite easily fixed, with some decent revision, learning what the instructions to different questions might say, how different topics could be tested - all of these take practice, but can be learned.
But if the problems are more that she isn't understanding the more abstract material, or can't cope with the longer, multi-step problems ,etc, then she might be happier in the foundation class. It is still challenging, goes up to grade 5, which is perfectly decent for going to sixth form, getting jobs etc, if you don't want to continue in maths.
worth looking at the information available, looking at past papers and revision guides, looking at her exams and work, talking to her to see how much work she is prepared to put in, considering whether she is likeliy to want to do any course that needs a 6 in maths, and talking to the teacher/head of dept to see what the possibilities are of starting in one set and switching later. Many schools don't make a final decision on which tier until Year 11, but that does rely on students being in a set that is being taught at least some of the higher content all along.