# FDD Item 15 owner-participation extraction codebook (semi-absentee-franchises, 2026-10-08, revised 2026-10-09)

You read one digest per brand: cover page, the FULL Item 15 text ("Obligation to Participate in the
Actual Operation of the Franchise Business"), participation passages found after Item 15 (mostly the
franchise agreement section Item 15 points to), and every hit of the model vocabulary (semi-absentee,
absentee, executive model, passive owner, owner-operator, manager-run) with its location. All text was
extracted with pdftotext -layout from the Minnesota CARDS PDF. Record ONLY what the document says. If
something is cut off, ambiguous, or Item 15 points to a franchise agreement section that is not in the
digest, grep the full text `SCRATCH/fdd/txt/{doc_id}.txt` before deciding. Never guess.

Scope rule: Item 15 governs. Use the franchise agreement section only when Item 15 points to it or
when Item 15 is silent on a field and the franchise agreement's management/participation section
states it. Ignore area developer, multi-unit development, master franchise, and SBA addendum rules.
If the FDD offers several formats, code the standard single-unit format presented first and say so in
`notes`.

Definitions
- Owner = the franchisee itself, or for an entity franchisee, one of its owners in an owner role
  (Principal, Operating Principal, Principal Owner, Designated Owner, Managing Owner, Controlling Owner).
- Manager = a person who need not be the franchisee or its principal owner and may be put in charge
  of day-to-day operation (General Manager, Designated Manager, Operator, Managing Operator, Director,
  Store Manager, Operating Partner who need only hold a minority stake). If a "manager" must hold an
  equity stake, it is still a manager; record the stake in manager_equity_*.
- Owner training attendance, signing guaranties, confidentiality or non-compete agreements are NOT
  participation in operation. Do not let them drive owner_participation.
- Equity-holding operators: if Item 15 requires the person who must run or supervise the business to be
  an OWNER (you, "one of your owners", an Operating Principal / Managing Owner / Designated Owner who
  must hold equity, with or without a stated minimum stake), code the owner duty (usually full_time)
  and manager_may_run = no, and record the stake in operator_min_equity_pct. Use the manager_equity_*
  fields only when Item 15 lets a manager (an employee) run the business and separately says that
  manager must or may be required to hold equity (example: "we may require your on-premises supervisor
  to own at least 10%").
- Contradictory text: when Item 15 states an owner full-time duty and ALSO lets a manager run the
  day-to-day without lifting that duty, code full_time with manager_may_run = yes (the owner duty is
  what the text states). When the full-time duty is expressly lifted if a manager is appointed ("unless
  you appoint a General Manager"), code not_required.

## Fields (one JSON object per brand; keys exactly as listed)

- file_number, doc_id, brand: copy from the digest header
- item15_located: yes | no
- fa_section_cited: franchise agreement section(s) Item 15 points to, as written (e.g. "Section 6.2"),
  else null
- owner_participation: what Item 15 requires of an OWNER personally in running the business
  - full_time: an owner must personally operate, manage or supervise the business on a full-time basis
    ("full time", "full-time", "full time and best efforts", "on site during all operating hours",
    "devote your entire business time"), and the text does not let a manager meet that duty instead.
    If the duty is "you OR a manager", it is NOT full_time for the owner (code the manager fields).
  - required_part: an owner must personally participate in some stated ongoing way, but not full time
    (minimum hours per week, "personally supervise", "actively participate", "remain actively involved",
    "best efforts to the management", periodic presence, oversight of the manager, attending meetings).
  - not_required: Item 15 says personal participation is not required (or that you may hire a manager
    to run the business) and states no ongoing personal duty for an owner. A recommendation alone
    ("we recommend you participate") stays not_required.
  - not_stated: Item 15 (and any section it points to) does not address owner participation.
- manager_may_run: may a manager run the day-to-day operation in place of the owner?
  - yes: the text presents this as an available option (even if conditions apply: training, approval,
    equity, full time). "You or your Designated Manager must supervise the business" = yes.
  - consent_only: the rule is personal operation by an owner; a substitute manager only with the
    franchisor's prior written consent or at its discretion ("unless we otherwise agree in writing").
  - no: the owner must run it; managers may assist but the text does not let one replace the owner.
  - not_stated: not addressed.
- recommends_personal: yes | no  (Item 15 recommends, but does not require, owner participation)
- owner_min_hours_week: number of hours per week an owner must personally work or be present, if a
  number is stated (convert "at least 20 hours each week" to 20; per-month figures divided by 4.33 and
  noted); else null
- owner_hours_text: the hours wording as written (max 25 words), else null
- owner_initial_period_months: if an owner must personally operate for an initial period before a
  manager may take over, that period in months; else null
- owner_other_work_barred: yes | no  (yes = Item 15 or the participation clause says the owner may not
  hold other employment or engage in other business activities, beyond the usual ban on COMPETING
  businesses; a ban on competing businesses alone = no)
- owner_training_required: yes | not_stated  (Item 15 says an owner or principal must personally
  complete initial training; Item 11 is not read for this field)
- operator_min_equity_pct: only when owner_participation = full_time: the equity percentage the owner
  who must work full time must hold, when stated as a number (majority = 50, noted); else null
- designated_owner_required: yes | no  (an entity franchisee must name an individual owner with an
  ongoing operating or decision role: Operating Principal, Designated Owner, Managing Owner, etc.)
- manager_training_required: yes | no | not_stated | na  (the manager must complete the franchisor's
  training; na when manager_may_run is no or not_stated and no manager is mentioned)
- manager_approval_required: yes | may_require | no | not_stated | na  (the franchisor must approve the
  manager; may_require = franchisor reserves the right to approve)
- manager_equity_required: yes | may_require | no | not_stated | na  (the manager must own an equity
  interest; "not required to hold any ownership interest" = no)
- manager_min_equity_pct: the minimum equity percentage for the manager if stated (e.g. 10), else null
- manager_full_time_required: yes | no | not_stated | na  (the manager must work full time or be on
  site during operating hours)
- manager_agreement_required: yes | no | not_stated | na  (the manager must sign a confidentiality,
  non-compete or similar agreement)
- onsite_supervision_required: yes | no  (the business must be under the on-premises or direct
  supervision of the owner or a trained/approved manager at all times or during all operating hours)
- Value "may_require" (m) is also allowed for manager_training_required and manager_agreement_required
  when the franchisor reserves the right to require it.
- model_language_use: how the FDD uses the model vocabulary (semi-absentee, absentee, executive model,
  passive owner/investor, manager-run) anywhere in the document
  - offers: the FDD describes a semi-absentee, absentee, executive or manager-run model as an option a
    franchisee may choose (including a semi-absentee addendum, or an application form listing
    semi-absentee as a choice)
  - disclaims: the FDD says the business is not intended or suited for absentee/passive owners, or
    warns about absentee ownership
  - other: the terms appear only in unrelated contexts (passive securities carve-outs in non-competes,
    litigation allegations, biographies, cost assumptions)
  - none: no hits (owner-operator alone does not count; record it under model_language_terms)
- model_language_terms: JSON list of the terms that appear (from the digest hit labels)
- model_language_note: max 25 words on where and how the terms appear (e.g. "Item 1: executive model
  available with General Manager"), else null
- rule_quote: the single sentence of Item 15 that best states the participation rule, verbatim, max 45
  words (shorten with "..." if needed)
- confidence: high | medium | low
- notes: short; explain any judgment call

Worked examples
- "You are required to either personally devote your full time and attention to your franchised
  business or to hire a full-time manager ... who will complete our required training programs. We may
  require that your on-premises supervisor own a minority equity interest (at least 10%)." =
  owner_participation not_required, manager_may_run yes, manager_training_required yes,
  manager_full_time_required yes, manager_equity_required may_require, manager_min_equity_pct 10.
- "We do not require you to personally participate ... However, you must have a certified General
  Manager ... A General Manager is not required to hold any ownership interest" = not_required, yes,
  manager_training_required yes, manager_equity_required no.
- "Unless you obtain our prior written consent, we require that you personally ... supervise the
  Warehouse on a full-time basis" = full_time, consent_only.
- "You or your Operating Principal must devote full time and best efforts" where the Operating Principal
  must be an owner = full_time, manager_may_run no (unless another passage lets a manager run it).
- "You must personally supervise the business and work at least 20 hours per week; a trained General
  Manager must manage day-to-day operations" = required_part, yes, owner_min_hours_week 20.