The most common and most likely answer to this crossword clue is the 4 plus 3 letter word SOFA BED
I've seen this crossword clue in The Guardian
S
O
F
A
B
E
D
Buddy explains!
The straight part
We know that "which can be folded" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case which can be folded = sofa bed.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.
What does SOFA BED mean?
SOFA BED noun- A sofa that unfolds into a bed.