With brand name flannel such as Moda or Maywood- you get what you pay for (IMHO). I made beautiful scarfs fro the DH and DS last year that wash beautifully. and did not shrink.
I have also gotten cheap flannel that was fantastic but that is an oddity. But for the most part, when I have purchased JoAnns flannel or any other cheap flannel, I have had it shrink and fluff off. I am not a prewasher but with flannel I ALWAYS prewash. I recently purchased an unknown name flannel for backing - PERFECT color for a quilt for my son. It shrank 2" in WOF alone!! I now need more fabric as it will not work. But I will deal with it - it was only $4.99 / yd at a fabric clearance center vs $12.95 at the LQS. You do what you have to do.