"When Flanders Failed" is the third episode of Season 3. It first aired on October 3, 1991. The episode was written by Jon Vitti and directed by Jim Reardon. The episode features cultural references to playwright William Shakespeare and the film It's a Wonderful Life. The title of the episode is a reference to the title of the poem "In Flanders Fields." Unusually, this episode had a large number of animation glitches, because the animation studio was training a new group of animators.
When Ned Flanders announces at a barbecue that he's starting his own general store catering to the left-handed, Homer wishes that his goody-goody neighbor will suffer financial ruin. Meanwhile, Bart takes karate class, but ends up cutting it when he realizes that it's not as exciting as it's cracked up to be.
Ned Flanders invites the Simpsons over for a barbecue. Initially, the entire family attends, but Homer declines because he doesn't like Ned. However, once he smells the food cooking, he quickly reconsiders. While they eat, Ned announces that he is quitting his job and opening a specialty store for left-handed people, called The Leftorium. For a long time, Homer has shown a lot of resentment for Flanders' material success while he is struggling to provide for his own family. When Homer wins a game of wish bone, he sees it as a chance to reverse the fortune of the Flanders family. He first thinks of a bankrupt Ned, but then imagines the Leftorium going out of business. Homer also considered Ned's death, but decided against it, thinking that would be going too far.
In a side plot, after a lecture from Marge about exercise, Bart asks to take karate lessons. While taking him on his first day, Homer gets his first look at Ned's new store. Business doesn't seem to be going very well, which pleases Homer. On his first lesson, Bart finds that karate isn't what he'd thought it'd be, having been given Sun Bin's Art of War to study before techniques, and takes to the arcade to play karate video games during his following lessons, merely pretending he is actually learning karate.
Homer checks up on Ned to make sure the Leftorium is doing poorly. When Homer is boasting about how Flanders is losing his shirt, Lisa warns Homer that such a bad attitude is poisonous. However, when Homer is elsewhere he begins to witness left-handed people who would benefit from patronizing Ned's store, he does nothing to send them in that direction. Soon after, Flanders begins to experience financial hardship as a result of his failing business venture. Rather than helping him, Homer buys most of Ned's belongings at a garage sale at "fire sale" prices. Eventually, Ned loses his store and is forced to close, and has his house repossessed. When Homer sees Ned closing the Leftorium with an "out of business" sign, it is exactly like his imagined wish, but it brings Homer grief, not satisfaction at seeing Flanders poor.
On the school playground, bullies antagonize Lisa, and she calls upon Bart to defend her with his martial arts skills. Predictably, he gets pummeled. That night, Homer finds the Flanders family living in their car after losing their house. Ned is actually thankful for Homer's words at the barbeque, as Ned believes that Homer was genuinely trying to warn him against high-risk ventures such as starting a business. Stricken with guilt, Homer decides to take it upon himself to make several phone calls and get everyone to start buying there.
The episode featured an unusual amount of animation glitches because the animation studio in Korea was training a new group of animators, and this episode was one of their first efforts. Mike Reiss said he will always remember it as the episode "that came back animated with a thousand mistakes in it and was just a complete and utter mess." Reardon said there was "literally a mistake in every other scene" when the episode came back from Korea. Several scenes had to be re-animated in the United States because of these glitches, but according to Reardon, "you can still see the lesser ones that got through, such as line quality problems particularly in the first act."
In its original American broadcast, "When Flanders Failed" finished 29th in the ratings for the week of September 30–October 6, 1991, with a Nielsen rating of 13.9, equivalent to approximately 12.8 million viewing households.
In 2003, "When Flanders Failed" was utilized in a Roanoke Presbyterian Church Sunday School class to stimulate a discussion among both children and adults about why unfortunate things happen to good people. Phil Brown, the teacher of the class, said the reason they used episodes of The Simpsons was "to get something that would get the kids excited and be more than just a traditional Sunday School lecture series."