Maybe it helps not to hoop the entire fabric.
Baste the towel to a big piece of appropriate stabilizer and hoop just the part of towel that will be embroidered. The rest of the stabilizer will hold it firmly in the hoop.

I put a picture of the diseaster..My granson for his wedding of the 4 September has asked to me to embroider little napkin for each guest. On one edge, i must embroider the vorname of each guest and on the opposite edge I put 2little hearts and the initials CF.They will put those napkin at each place at the table folded in the glass, and each guest will recognize his place. After they will keep them as memory of the wedding. The napkins are very little and to embroider in the corners, I should baste as eva advice. But I must do 98 napkins, and i Hope that I could use the little circle hoop, it would be more quickly. I hope that you can understand it is not easy for me to write long sentences in english!

Hi Claude.
Hold the circular spring in both hands at the open ends and pull the two sides outwards, stretching it, this will make the circle larger so when you hoop a design it will hold the material in better, because it is larger than the outside hoop.
I hope you understand this.
hugs n roses, Meganne

i have used it lots on T-shirts and have not had a problen at all. the ring fits nice and tight.
think what meganne suggested will help.
i also use stick on backing what stops the material from moving

Are you saying the screw won't stay tightened down? Can you use the screw from another hoop that does work? Good luck with your project. That is a lot of napkins to get done!

I have that same hoop and used it without problems. The material should not be to thick, but your napkins would be OK. Try a bit of starch as suggested, I use it frequently as I find it prevents wrinkles.