i would had the same worries!!! esp since kikko is a big chewer and tug-a-war enthusiast 

 he digs at it a lot though, to adjust the blanket to just how he likes it ... i think its adorable. 
 
  
but he LOVES his blanket that a fellow YT'er made for me, her name is Kimmie (
www.pamperpuppalace.com),  
i also got one for my GE buddy from 
www.chloebella.com (but i warn you if you go to her site, she makes the CUTEST dresses 

 )  
and if you are looking for blankets without fringes, i also bought a really pretty fleece and satin blanket from Des (go.fetch.home.comcast.net), it looks so pretty .. i can't wait to get it back home.  
and i bought another blanket for my GE buddy from barkindogclothes.com (they do great embroidery and very willing to work with you on anything) 
Below are pics ... 
1. The one that kimmie made for me
2. the one i got for my GE buddy from barkindogclothes.com
3. the kind that i got from Des at GoFetch, but i got the stars and galaxy blankie with blue satin and embroidery (Des, sorry that I used your pic, I hope you don't mind). 
hopefully i was of some help! goodluck!