oof, I'm no expert on memorabilia but this was definitely written by one person who had no idea what they were doing... possibly an occupation-era American serviceman just imitating a yosegaki hinomaru as a souvenir. Some are recognizable as far as the kanji or kana they're intended to be, but none of it is intelligible. Usually the writing will radiate from the circle or be written vertically or horizontal, but on this flag almost every "word" is written in a seemingly random direction, so there is no "correct" orientation. . I flipped it around in photoshop, and I think framing it in the same orientation as your photo looks as good as it'll get.
While it may be authentic to its age and sentimental value, this was not written by a Japanese person and is not an authentic "good luck flag." It's one of, if not the most obvious fakes I've seen. I know that's not what you were asking, and it's up to you whether to let them know this. Good luck!