diff --git a/src/main/generate.mjs b/src/main/generate.mjs
index 00491d7a..3dfa5608 100644
--- a/src/main/generate.mjs
+++ b/src/main/generate.mjs
@@ -1,15 +1,18 @@
-import { stat } from 'node:fs/promises'
+import { stat, mkdir } from 'node:fs/promises'
+import { join, resolve } from 'node:path'
 import { getPkgManager } from './lib/get-package-manager.mjs'
 import { importOrLocal } from './lib/import-or-local.mjs'
 import errors from './errors.mjs'
 import split from 'split2'
 
-export const prepareFolder = async (path, tempNames, logger) => {
+export const prepareFolder = async (path, tempNames, logger, appName = 'appName') => {
   const s = await stat(path)
   if (!s.isDirectory()) {
     logger.error({ path }, `Path ${path} is not a directory`)
     throw new Error(`Path ${path} is not a directory`)
   }
+  const newFolder = join(resolve(path), appName)
+  await mkdir(newFolder)
 
   const pkgManager = await getPkgManager()
   const templateVariables = {}
@@ -17,7 +20,7 @@ export const prepareFolder = async (path, tempNames, logger) => {
     for (const name of tempNames) {
       const template = await importOrLocal({
         pkgManager,
-        projectDir: path,
+        projectDir: newFolder,
         pkg: name,
         logger
       })
@@ -49,8 +52,9 @@ export const prepareFolder = async (path, tempNames, logger) => {
 //     }
 //   ]
 // ]
-export const createApp = async (projectDir, { projectName, services, entrypoint, port, logLevel, typescript, createGitHubRepository, installGitHubAction }, logger) => {
+export const createApp = async (dir, { projectName, services, entrypoint, port, logLevel, typescript, createGitHubRepository, installGitHubAction }, logger) => {
   const { execa } = await import('execa')
+  const projectDir = join(dir, projectName)
 
   if (!services || services.length === 0) {
     logger.error('No services to create')
diff --git a/test/main/prepare-folder.test.mjs b/test/main/prepare-folder.test.mjs
index be93e198..6c761f94 100644
--- a/test/main/prepare-folder.test.mjs
+++ b/test/main/prepare-folder.test.mjs
@@ -25,13 +25,13 @@ beforeEach(() => {
 
 test('Installs no templates or plugins', async () => {
   const appDir = await mkdtemp(join(tmpdir(), 'plat-app-test-create'))
-  await prepareFolder(appDir, [], [], logger)
+  await prepareFolder(appDir, [], logger, 'test-app')
   expect(logger.errors.length).toBe(0)
 })
 
 test('Install in non-existent folder', async () => {
   try {
-    await prepareFolder('testnonexitent', [], logger)
+    await prepareFolder('testnonexitent', [], logger, 'test-app')
     throw new Error('Should have thrown an error')
   } catch (err) {
     expect(err).toBeInstanceOf(Error)
@@ -53,7 +53,7 @@ test('Install a non-existent template', async () => {
 
 test('Install one @platformatic/service template', async () => {
   const appDir = await mkdtemp(join(tmpdir(), 'plat-app-test-create'))
-  await prepareFolder(appDir, ['@platformatic/service'], logger)
+  await prepareFolder(appDir, ['@platformatic/service'], logger, 'test-app')
   expect(logger.infos[0][0].name).toEqual('@platformatic/service')
   expect(logger.errors.length).toBe(0)
 }, 30000)