Do you have your mainscreen set to your hoop setting, because I had one set for a different setting once and it wouldn't recognize the design, also if you don't have it centered and placed at an awkward angle it might say your hoop isn't compatible. These are a few things I have learned over the past few months as a newbie. under the settings key, it looks like a piece of paper their should be a page for setting the embroidery background which shows the boundaries of the specific hoop chosen. I found this out 2 weeks ago and have been using my machine for 6month. Your manual is knowledge and brother has one of the most detailed out there compared to some so read the manual. It should explain everything in detail for each setting for your babylock. my guess is that it is a setting or you have the design not placed correctly within perimeters of your hoop.