# FDD computer-system and data-rights codebook (franchise-technology-requirements, frozen 2026-10-18)

Unit: one FDD per brand, the 259-brand Minnesota CARDS sample published with /research/franchise-royalty-rates/
(FDD issue dates 2025 to 2026; current CARDS links from emerging-franchise-brands/data/link_updates.csv, last verified
2026-10-14). The rule being coded is 16 CFR 436.5(k)(5)(i) to (v) (Item 11, computer systems). Data ownership,
payment card (PCI) rules and security duties are not required Item 11 disclosures; they are coded from what the FDD
volunteers in Item 11 and from a keyword scan of the rest of the FDD text, including the franchise agreement exhibit.

Reading packet per brand (scripts/02_packets.py, 02b_digests.py): the computer-systems part of Item 11, plus up to two
snippets per topic (PCI, breach, cyber/virus, data ownership) from the rest of the FDD. The full Item 11 and the full
FDD text are opened whenever the packet is ambiguous. Record only what the FDD says; never guess.

## Coded fields (data/fdd_item11_tech.csv)

| Field | Values | Rule |
|---|---|---|
| sys_required | yes, no | yes = the franchisee must buy, lease, license or use a computer, tablet, POS or cash register, or software or an online platform the franchisor specifies. no = the FDD says no computer system or cash register is required. |
| sys_type | proprietary, designated, specs, none | proprietary = a required core program (POS, management, booking, reservation, CRM) is owned, developed or licensed out by the franchisor or an affiliate. designated = not proprietary, but the franchisee must use a specific product or vendor the franchisor names or designates. specs = the franchisee may pick its own vendor or product that meets specifications, or choose from an approved list of more than one. none = sys_required no. Rights reserved for the future do not count; code what is required now. Hierarchy: proprietary over designated over specs. |
| pos_required | yes, no | yes = a POS system, point-of-sale software, cash register or card-payment terminal is required (named or generic). |
| cost_init_low, cost_init_high | dollars or blank | One-time cost Item 11 states for buying or leasing the required system: hardware, software, installation, set-up or licence fees. Separately stated components are summed. A single figure fills both. "Up to $X" fills both with X (note). Blank when Item 11 gives no dollar figure, says the cost cannot be estimated, or says the cost is bundled into another fee. |
| cost_annual_low, cost_annual_high | dollars a year or blank | Recurring cost Item 11 states for the system: maintenance, support, software subscriptions or licences, updates, and any technology fee restated in Item 11. Monthly x 12, weekly x 52. Components summed. Items labelled optional or recommended are excluded (note). Percent-of-sales charges are noted, not converted. Per-user prices use the smallest stated configuration for the low end and the largest typical stated configuration for the high end. |
| upgrade_required | yes, no, not_stated | yes = the franchisee must upgrade, update, replace or add to the system when the franchisor requires (or must keep it current). no = Item 11 says upgrades are optional or not required. |
| upgrade_freq_limit | limit, qualitative, no_limit, not_stated, na | limit = a stated contractual limit on how often upgrades can be required (for example once a year). qualitative = the FDD says upgrades are limited only in general terms ("reasonable", "commercially reasonable") with no number. no_limit = the FDD says there is no contractual limit on frequency. na = upgrade_required is no. |
| upgrade_cost_cap | cap, qualitative, no_cap, not_stated, na | cap = a contractual ceiling on the cost of required upgrades (dollar or percent). An estimate is not a cap, and a cap on a recurring technology fee is not an upgrade cap (note it). qualitative = limited only in general terms with no number. no_cap = the FDD says there is no contractual limit on cost. |
| access | yes, no, not_stated | yes = the franchisor has, may have, or may require independent access to information in the franchisee's systems (a reserved right counts). no = the FDD says the franchisor will not have independent access. |
| access_limit | limit, no_limit, not_stated, na | limit = the FDD names any contractual restriction on what the franchisor may access (for example it excludes employee, payroll or card data, or covers only business or bookkeeping data) or on when or how (prior notice, request, franchisee acknowledgement, no unreasonable interference), even if it also says there are no other contractual limitations. "Subject to applicable law" alone is not a contractual limit. no_limit = the FDD says there is no contractual limitation and names none. na = access is no. |
| data_owner | franchisor, franchisee, shared, not_stated | Who the FDD says owns the data, customer information or customer lists generated by the franchised business (Item 11 or elsewhere). Generic "Confidential Information is our property" without data or customer wording is not_stated. Ownership of e-mail addresses, domain names or social media accounts alone is not data ownership. |
| data_owner_where | item11, elsewhere, blank | Where the ownership statement was found (item11 wins when both). |
| pci | yes, no | yes = the FDD requires the franchisee to comply with the Payment Card Industry Data Security Standard (PCI DSS or "payment card industry" standards). |
| sec_responsible | yes, no | yes = the FDD makes the franchisee responsible for the security of its systems or data, or requires it to install or maintain security measures (antivirus, firewall, endpoint protection, security procedures to safeguard data) against unauthorized access, viruses, hacking or cyber attacks, or makes it bear losses from such events. A PCI DSS duty alone, or a cyber insurance requirement alone, does not count (PCI is its own field; insurance is Item 8). |
| breach_notify | yes, no | yes = the FDD requires the franchisee to notify the franchisor of a data or security breach (actual or suspected). |
| coding_notes | text | Short evidence notes (quotes kept under 25 words). |

"no" for pci, sec_responsible and breach_notify means not found in Item 11 or in the keyword scan of the rest of the
FDD. It is a lower bound on prevalence, not proof of absence.

## Joined fields (not recoded)

| Field | Source |
|---|---|
| brand, franchisor, sector, sector_label, fdd_issue_date, mn_document_id, mn_document_url | franchise-royalty-rates/data/fdd_fees.csv sample frame, URL from link_updates.csv |
| item6_tech_fee, item6_tech_fee_annual_low, item6_tech_fee_annual_high, item6_tech_fee_pct | fdd_fees.csv (tech_fee, tech_fee_annual_low, tech_fee_annual_high, tech_fee_pct) |
| item7_tech_low, item7_tech_high, item7_tech_lines, item7_tech_mixed_lines | franchise-initial-investment/data/fdd_item7_lines.csv: sum of rows with category technology; mixed = rows where technology is the secondary category (not summed) |

## Derived fields

| Field | Rule |
|---|---|
| annual_stated_low, annual_stated_high | max(cost_annual, item6_tech_fee_annual) at each end. The larger figure is used, not the sum, because Item 11 often restates the Item 6 technology fee; this is a floor, not a total. |
| first_year_stated_low, first_year_stated_high | item7_tech + annual_stated (both must be present). |

## Clarifications added after the blind check (2026-10-18)

The independent checker coded 20 random FDDs blind; every disagreement was adjudicated against the FDD text
(data/blindcheck_adjudication.csv). These clarifications were then applied to all 259 FDDs through the sweeps in
scripts/05b_sweeps.py, and every change is logged in data/coding/adjudication_fixes.jsonl.

| Field | Clarification |
|---|---|
| pos_required | yes also when the required system takes card payments (required payment gateway, merchant services processor, card interface or payment-processing software) without a named POS. A right reserved for the future is still no. |
| cost_init, cost_annual | When Item 11 offers alternative licence models (for example subscription versus one-time licence), the low end is the cheapest stated path and the high end the most expensive. Software inside the FDD's own definition of the Computer System counts (menu-board software included); conditional add-ons and "up to" component ceilings add to the high end only. |
| upgrade_freq_limit, upgrade_cost_cap | A general statement that there is no limit on the franchisor's right to require upgrades codes both fields as no limit. A statement about frequency only, or cost only, codes that field only. |
| data_owner | "Retains all right, title and interest in" customer data, and customer lists named inside Confidential Information that is declared the franchisor's trade secrets or property, count as franchisor. |
| pci | A PCI DSS notice addressed to the franchisee anywhere in the FDD (including Item 1 regulatory notices) counts. Mentions only in insurance coverage, vendor terms or a reserved future policy do not. |
| sec_responsible | A firewall, anti-virus or endpoint component inside the required system counts, as does a clause making the franchisee responsible for protecting its business from viruses and hackers. Clauses that only protect the franchisor's confidential information ("security procedures for maintaining secrecy") do not. |
| breach_notify | Any duty to tell the franchisor of a security breach, data incident, compromise of card data or compromise of system security counts, whatever the wording. Business associate (HIPAA) notices running from the franchisor or a vendor to the franchisee do not. |