diff --git a/plugins/scaffolder-backend/src/scaffolder/prepare/github.test.ts b/plugins/scaffolder-backend/src/scaffolder/prepare/github.test.ts
new file mode 100644
index 0000000000..ecf39cca8e
--- /dev/null
+++ b/plugins/scaffolder-backend/src/scaffolder/prepare/github.test.ts
@@ -0,0 +1,79 @@
+/*
+ * Copyright 2020 Spotify AB
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ *     http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+
+const mocks = {
+  Clone: { clone: jest.fn() },
+  CheckoutOptions: jest.fn(() => {}),
+};
+jest.doMock('nodegit', () => mocks);
+// require('nodegit');
+
+import { GithubPreparer } from './github';
+import {
+  TemplateEntityV1alpha1,
+  LOCATION_ANNOTATION,
+} from '@backstage/catalog-model';
+
+describe('GitHubPreparer', () => {
+  let mockEntity: TemplateEntityV1alpha1;
+  beforeEach(() => {
+    jest.clearAllMocks();
+    mockEntity = {
+      apiVersion: 'backstage.io/v1alpha1',
+      kind: 'Template',
+      metadata: {
+        annotations: {
+          [LOCATION_ANNOTATION]:
+            'github:https://github.com/benjdlambert/backstage-graphql-template/blob/master/template.yaml',
+        },
+        name: 'graphql-starter',
+        title: 'GraphQL Service',
+        description:
+          'A GraphQL starter template for backstage to get you up and running\nthe best pracices with GraphQL\n',
+        uid: '9cf16bad-16e0-4213-b314-c4eec773c50b',
+        etag: 'ZTkxMjUxMjUtYWY3Yi00MjU2LWFkYWMtZTZjNjU5ZjJhOWM2',
+        generation: 1,
+      },
+      spec: {
+        type: 'cookiecutter',
+        path: './template',
+      },
+    };
+  });
+  it('calls the clone command with the correct arguments for a repository', async () => {
+    const preparer = new GithubPreparer();
+    await preparer.prepare(mockEntity);
+    expect(mocks.Clone.clone).toHaveBeenNthCalledWith(
+      1,
+      'https://github.com/benjdlambert/backstage-graphql-template',
+      expect.any(String),
+      { checkoutOpts: { paths: ['template'] } },
+    );
+  });
+  it('calls the clone command with the correct arguments for a repository when no path is provided', async () => {
+    const preparer = new GithubPreparer();
+    delete mockEntity.spec.path;
+    await preparer.prepare(mockEntity);
+    expect(mocks.Clone.clone).toHaveBeenNthCalledWith(
+      1,
+      'https://github.com/benjdlambert/backstage-graphql-template',
+      expect.any(String),
+      { checkoutOpts: {} },
+    );
+  });
+  it('resolves relative path from the template', async () => {});
+  it('resolves relative path from the nested template', async () => {});
+});
diff --git a/plugins/scaffolder-backend/src/scaffolder/prepare/github.ts b/plugins/scaffolder-backend/src/scaffolder/prepare/github.ts
index 3f711bc477..b0ced7db2b 100644
--- a/plugins/scaffolder-backend/src/scaffolder/prepare/github.ts
+++ b/plugins/scaffolder-backend/src/scaffolder/prepare/github.ts
@@ -46,7 +46,9 @@ export class GithubPreparer implements PreparerBase {
     );
 
     const checkoutOptions = new CheckoutOptions();
-    checkoutOptions.paths = [templateDirectory];
+    if (template.spec.path) {
+      checkoutOptions.paths = [templateDirectory];
+    }
 
     await Clone.clone(repositoryCheckoutUrl, tempDir, {
       checkoutOpts: checkoutOptions,