Later starter Franz powered down the famous Saslong course at the Italian ski resort in the Dolomites to pip Svindal by 0.04 seconds.
American veteran Steve Nyman, bidding to match legendary Austrian Franz Klammer and home skier Kristian Ghedina by winning four downhills at the venue, had to settle for third after making a mistake on the famous "Camel Humps" -- nearly sitting down on his skis.
Despite the mistake, Nyman was just four tenths of a second slower than Franz, who was claiming his maiden victory.
With Norwegians such as Svindal, back to near his best after a serious injury last season, and Kjetil Jansrud, who won Friday's super-G in Val Gardena, so dominant there has been meager fare for the once mighty Austrians.
But 27-year-old Franz, wearing the No.26 bib, produced a flawless run to change all that, claiming the top spot of the podium after two-runner-up places previously.
"To claim my first victory here is really awesome," Franz told the official FIS website.
It has been 13 downhill races since Hannes Reichelt won for Austria in Kvitfjell last March and pressure had been growing on the team from a restless public and media, accustomed to the triumphs of the likes of Klammer and Hermann Maier over the years.
Four-up for Stuhec
In women's World Cup action Saturday, there was another stunning victory for Slovenian Ilka Stuhec in a downhill at Val D'Isere.
The 26-year-old took the top honors by 0.28sec from Cornelia Huetter of Austria with Italian Sofia Goggia in third.
Stuhec, taking up the mantle for her country after the retirement of two-time Olympic champion Tina Maze, has been in superb form this season.
She has accumulated four wins, three in downhill and the other in the combined event at Val D'Isere Friday.
The traditional award for her latest winning effort was to be presented with a cow, which she promptly named Isa in memory of a dog she once owned.
Slalom specialist Mikaela Shiffrin of the United States sat out the speed events at the French resort but still leads the overall World Cup standings from Goggia with Stuhec up to third and clear leader in the downhill discipline standings.