Franchetti led for 155 of the 200 laps, taking his last pit stop on lap 164 and skillfully using just enough of his remaining fuel to end up in the Indy 500 winner's circle.
When pole sitter and defending champion Helios Castroneves was forced to pit with nine laps left, Franchetti surged into the lead for good.
Castroneves ended up finishing ninth.
With Franchetti's win, Target Team owner Chip Ganassi became the first owner to collect wins at both the Indianapolis 500 and the Daytona 500 NASCAR races.
Dan Wheldon garnered his second straight runner-up finish. Franchitti teammate Alex Lloyd, Scott Dixon, and Danica Patrick rounded out the top five finishers.
The race ended under a caution flag as Mike Conway's car sailed off the track and into the fence in a spectacular crash. Conway was awake after incident but was helicoptered to a hospital for observation.
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