diff --git a/readme.md b/readme.md
index f1c4ee3..529dd68 100644
--- a/readme.md
+++ b/readme.md
@@ -168,7 +168,7 @@ If you specify a folder as a template, then the folder will be created in the ou
 
 Cookiecutter will recursively copy all files within your templates folder and replace any occurrences of your specified fields.
 
-If you don't want this behavior, specify a file as your template's `templatePath`.
+The default behavior is to add a new folder at the destination; `destinationPath/ComponentName`. This can be avoided by adding `excludeDirectory: true` to your configuration file.
 
 ## Custom config location
 
diff --git a/src/lib/renderer.js b/src/lib/renderer.js
index ca1326c..ce4d172 100644
--- a/src/lib/renderer.js
+++ b/src/lib/renderer.js
@@ -15,6 +15,7 @@ function replaceFields(string, fields) {
 
 function renderFiles({templateName, fields}, configLocation) {
     const config = getTemplateConfig(templateName, configLocation);
+    const excludeDirectory = config.excludeDirectory || false;
     const pwd = process.env.PWD;
     const destinationDirectory = path.resolve(pwd, config.outputPath);
     const templateDirectory = path.resolve(pwd, config.templatePath);
@@ -51,12 +52,11 @@ function renderFiles({templateName, fields}, configLocation) {
 
         if (isFolderTemplate) {
             const {base} = path.parse(templateDirectory);
-
             return {
                 src: filePath,
                 dest: path.join(
                     destinationDirectory,
-                    replaceFields(base, fields),
+                    (!excludeDirectory ? replaceFields(base, fields) : ''),
                     replaceFields(filePath.replace(templateDirectory, ''), fields)
                 ),
             };
diff --git a/src/lib/tests/__snapshots__/renderer.test.js.snap b/src/lib/tests/__snapshots__/renderer.test.js.snap
index ee2661f..15b3933 100644
--- a/src/lib/tests/__snapshots__/renderer.test.js.snap
+++ b/src/lib/tests/__snapshots__/renderer.test.js.snap
@@ -29,6 +29,25 @@ exports[`renderFiles() should correctly render the files when the template is a
 "
 `;
 
+exports[`renderFiles() should correctly render the files when the template is a folder excluding the containing directory if set 1`] = `
+"console.log('Bar');
+"
+`;
+
+exports[`renderFiles() should correctly render the files when the template is a folder excluding the containing directory if set 2`] = `
+"import React from 'react';
+
+const number = A;
+
+class Bar React.Component {
+    render() {
+        return <div>Hello world {number}</div>;
+    }
+}
+
+export default Bar"
+`;
+
 exports[`renderFiles() should correctly render the files when the template is just a path 1`] = `
 "import React from 'react';
 
@@ -41,4 +60,4 @@ class Baz React.Component {
 export default Baz"
 `;
 
-exports[`renderFiles() should throw an error if the output of a template allready exists 1`] = `"src/lib/tests/test-templates-output/Bar/index.js already exists."`;
+exports[`renderFiles() should throw an error if the output of a template already exists 1`] = `"src/lib/tests/test-templates-output/Bar/index.js already exists."`;
diff --git a/src/lib/tests/renderer.test.js b/src/lib/tests/renderer.test.js
index 37ca6b9..112946e 100644
--- a/src/lib/tests/renderer.test.js
+++ b/src/lib/tests/renderer.test.js
@@ -58,7 +58,29 @@ describe('renderFiles()', () => {
         expect(fs.readFileSync(`${outputPath }/Bar/sub-folder/Bar.js`, 'utf8')).toMatchSnapshot();
     });
 
-    it('should throw an error if the output of a template allready exists', () => {
+    it('should correctly render the files when the template is a folder excluding the containing directory if set', () => {
+
+        getTemplateConfig.mockImplementation(() => {
+            return {
+                templatePath: `${__dirname }/test-templates/Foo`,
+                excludeDirectory: true,
+                outputPath,
+            };
+        });
+
+        renderFiles({
+            templateName: '',
+            fields: {
+                COMPONENT_NAME: 'Bar',
+                specialNumber: 'A',
+            },
+        });
+
+        expect(fs.readFileSync(`${outputPath }/Bar/Bar.js`, 'utf8')).toMatchSnapshot();
+        expect(fs.readFileSync(`${outputPath }/index.js`, 'utf8')).toMatchSnapshot();
+    });
+
+    it('should throw an error if the output of a template already exists', () => {
 
         getTemplateConfig.mockImplementation(() => {
             return {
diff --git a/src/lib/tests/test-templates/Foo/COMPONENT_NAME/COMPONENT_NAME.js b/src/lib/tests/test-templates/Foo/COMPONENT_NAME/COMPONENT_NAME.js
new file mode 100644
index 0000000..6dc45bc
--- /dev/null
+++ b/src/lib/tests/test-templates/Foo/COMPONENT_NAME/COMPONENT_NAME.js
@@ -0,0 +1 @@
+console.log('COMPONENT_NAME');
diff --git a/src/lib/tests/test-templates/Foo/index.js b/src/lib/tests/test-templates/Foo/index.js
new file mode 100644
index 0000000..7ec2e82
--- /dev/null
+++ b/src/lib/tests/test-templates/Foo/index.js
@@ -0,0 +1,11 @@
+import React from 'react';
+
+const number = specialNumber;
+
+class COMPONENT_NAME React.Component {
+    render() {
+        return <div>Hello world {number}</div>;
+    }
+}
+
+export default COMPONENT_NAME
\ No newline at end of file