What a great idea. Ordering that kind of stuff is much cheaper in Korea. I'm not sure about all the fuss with files. Seems like it's the shops responsibility and shouldn't be too difficult. Good call on fivvr through. Give your business to people who want to treat customers fairly.
It may not scale properly if you don't have the file, this is stitching, they can stretch it, but if you want it to look professional, better have it converted to DST or whatever embroidery software they are using. An SVG file or maybe even an AI file may convert, but not a PNG or JPG. Most places charge you for converting the files and require 6 to 12 hats minimum of the same style, the machine is around $5000 in Korea or in Canada. I didn't travel to the cheap part of town and went to a place on Queen St. W. They probably offer a real deal if you order 50.