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I'd personally suggest FT3 format, selecting stages from a pool of them deemed to not be obnoxious to play on (like 75M or that giant Kid Icarus stage for instance), no items, 3 stock, first stage pick determined by coin flip, loser of coin flip can ban one stage from the selected pool, after that the loser of the latest game picks stages from the original pool.

Loser's bracket would be schway as well but that's a lot more trouble to host.