Fresh snow and fog forced organizers to shorten the course to a super-G length for the second straight day.
Hudec was 0.33 seconds behind and Franz 0.36 back. The top 15 finishers all finished within a second of each other.
Innerhofer failed to win a medal at the recent world championships in Schladming, Austria. But he won three medals when the worlds were held in Garmisch-Partenkirchen two years ago — gold in the super-G, silver in the super-combined and bronze in the downhill.
He also shared fourth place in last year's downhill at the German resort.
Another Italian, Werner Heel, was fourth, ahead of Steven Nyman of the United States.
Eric Guay of Canada was seventh. He won the downhill in Garmisch two years ago and was second in last year's World Cup race. He also clinched the super-G World Cup title by winning the final race in 2010 on this course.
Aksel Lund Svindal of Norway, the downhill gold medalist from Schladming, shared 26th place in training. Svindal needs a good result in Saturday's downhill since he is already more than 200 points behind Austria's Marcel Hirscher, the defending overall champion.
"I am focusing on downhill and super-G races and trying to earn as many points as possible," Svindal said. "Marcel has a big lead, I can only hope he makes mistakes and he's too good to make mistakes."
With fresh snow falling late Friday, it was unlikely the organizers would be able to mount a full-length downhill on the famed Kandahar course.
A giant slalom is slated for Sunday, when Hirscher will have a chance to extend his lead.