Franz Bader was born in Vienna in 1903. His mother was a painter, and his father owned a flour business. Franz became a bookseller and by the mid-1930s owned the oldest bookstore in Vienna, the Wallishausser'sche Buchhandlung. Following the German annexation of Austria in March 1938, Franz, like other Jews, lost his business, and he and his first wife, Antonia, known as Tony, were fortunate to escape to the United States.

On arriving in Washington, D.C., Franz worked in James Whyte's bookstore, selling foreign language books and maps as well as modern art. After the war, Franz opened his own art gallery, where he also sold art and foreign language books. Tony Bader died in 1966, and in 1971 Franz married Virginia Forman.

Franz Bader, who was an important presence on the Washington art scene, believed his role as a gallery owner was to reveal hidden artistic talent to the public. Wanting somehow to continue this work after his death, he decided, with Virginia, to establish a fund that would help mature artists to continue working to bring forth the works of art lying as yet undiscovered within them.

Franz Bader died in 1994. Virginia Bader died in 2001. The Franz Bader Bookstore finally closed in 2007.