A question I was going to ask is where did you get the design, some times freebies are not the best designs and can be off, but designs from JUJU are good desgins I have a ton of them from her, so the answer is as you know by now is that you didn't have it stablized enough did you have it tight in your hoop? If it isn't hooped tight the stitching will start to pull on the materal and cause the pucker like you are seeing so on top of good stablizer make sure your hoop is tight so the material won't slip. You can also try a basting stitch around your design. I don't know if you have softwear for color change ect. I have Designers Gallery it has an auto baste stitch I donn't hoop much any more just my stablizer then spray it and attach my item and then do a baste stitch around it. I haven't had that problem in a long time. Even if you do hoop your material have good stabalization under it for the extra little thread it uses try the baste stitch it helps keep the material nice and tight.