What Name Should I Use?
To a point, it is personal preference on the part of the researcher--we don't often know what name our ancestor actually preferred--most of our ancestors do not leave behind documents clearly indicating their name preference. At times, ancestors do leave clues.
In the case of Fannie, I do not use an "also know as" or even a "nickname." Personally I don't use the "nickname" field unless I really know that the person used that nickname. Fannie may be a nickname for Francis, but for great-grandma it wasn't her nickname--it was her name.
A great-grandfather is actually named John Michael Trautvtter. He is referred to as Michael or Mike in some records. I use "Michael" as an also known as and "Mike" as nickname. Michael is not really a nickname, but Mike is.
So for Fred, I use Fred as his name, Frederich as his "also known as," and Fritz as his "nickname." I have records that refer to him by these names and those names are connected to those sources in my database.
I also transcribe each document as it reads--and connect it to the appropriate name. When I "choose" a name for an ancestor, I always make a note about why that name was chosen in my notes.