OK, confession: since I'm crazy and immature, I don't see a problem with Sonic fan characters. It's a hobby, let the kids enjoy it. However, since I have the seeds of intelligence, I can see that most fan characters out there are horrible. So, since again, I'm crazy, I came up with a few ways to fix most of the problems with awful fan characters.
1. If you want an acceptable fan character, don't use an existing species. That is to say, no hedgehogs, no foxes, no echidnas, no cats, no armadillos, etc.
And avoid porcupines and tenrecs, too. We have enough quilled mammals already.
2. Most Sonic characters are named after their appearance, hobbies, or abilities. Most fan characters are named like either normal humans or Final Fantasy characters. Name yours after the former, not the latter.
3. If you are going to draw your character, don't trace official Sonic art. I can accept you being unskilled, but not so utterly unoriginal.
4. If your character can beat Sonic in a fight or has several magical powers at once, scrap them.
5. If your character is in any way related to or dating an official Sonic character, scrap them.
There, that's a long and pointless rant, but I think it fixes most fan character problems.