diff --git a/plugins/scaffolder-backend/src/scaffolder/actions/builtin/fetch/template.ts b/plugins/scaffolder-backend/src/scaffolder/actions/builtin/fetch/template.ts
index 316e032c00..425623d154 100644
--- a/plugins/scaffolder-backend/src/scaffolder/actions/builtin/fetch/template.ts
+++ b/plugins/scaffolder-backend/src/scaffolder/actions/builtin/fetch/template.ts
@@ -242,7 +242,7 @@ export function createFetchTemplateAction(options: {
         }
         const outputPath = resolvePath(outputDir, localOutputPath);
 
-        if (!renderContents) {
+        if (!renderContents && !extension) {
           ctx.logger.info(
             `Copying file/directory ${location} without processing.`,
           );