The 85-lap race on the street course in Toronto's Exhibition Place featured eight cautions.
Franchitti was involved in an incident with Will Power on lap 57, during which Power was spun around.
Race officials at first handed Franchitti a drive-through penalty, but it was quickly repealed, allowing him to eventually wrest the lead from Graham Rahal and then hold off Chip Ganassi Racing teammate Scott Dixon down the stretch for the victory.
It was Franchitti's third win in Toronto and 30th career title.
Dixon's second-place finish gave Ganassi Racing a 1-2 finish.
Ryan Hunter-Reay came in third while Marco Andretti and Vitor Meira rounded out the Top 5.
Franchitti extended his points lead over Power to 55 and moved 83 ahead of Dixon with the win.
Swim Week Miami Beach 2014 [PHOTOS]