It's a question of what maximum RPM the encoder can handle and what resolution your application requires. If you look in their
spec sheet, you'll see that depending on the mode it will work up to 15k RPM (quad) or up to 6600 RPM (PWM). Keep in mind the 775 runs at 13050 RPM as you plan what mode to use and where to place the encoder.
Also, with a 196:1 reduction, please be sure to take a look at the
VP load ratings to make sure you don't have a failure. Let me know if you have any questions reading through that.