diff --git a/utils/new-design/all.py b/utils/new-design/all.py
index 3359ec69..b9d094ab 100644
--- a/utils/new-design/all.py
+++ b/utils/new-design/all.py
@@ -610,6 +610,35 @@ def _parse_app_config(self, app_config_file):
                     if "kconfig" in data["libraries"][l].keys():
                         self.config["libraries"][l]["kconfig"] = data["libraries"][l]["kconfig"]
 
+    def generate_init(self, tester_config):
+        if self.config['test_dir']:
+            test_dir = os.path.abspath(self.user_config['test_dir'])
+        else:
+            test_dir = os.path.abspath('.tests')
+        if self.config['rootfs']:
+            rootfs = os.path.join(os.getcwd(), self.config["rootfs"])
+        else:
+            rootfs = ""
+        init_dir = os.getcwd()
+
+        base = tester_config.config["source"]["base"]
+
+        name = self.config["name"]
+
+        if self.has_template():
+            app_dir = os.path.join(os.path.join(base, "apps"), self.config['template'])
+        else:
+            app_dir = os.getcwd()
+
+        with open(os.path.join(SCRIPT_DIR, "tpl_app_fs_init.sh"), "r", encoding="utf-8") as stream:
+            raw_content = stream.read()
+
+        content = raw_content.format(**locals())
+
+        with open(os.path.join(test_dir, "app_fs_init.sh"), "w", encoding="utf-8") as stream:
+            stream.write(content)
+        os.chmod(os.path.join(test_dir, "app_fs_init.sh"), 0o755)
+
     def __init__(self, app_config="Kraftfile", user_config="config.yaml"):
         self.config = {}
         self._parse_user_config(user_config)
@@ -727,10 +756,6 @@ def _generate_makefile(self):
         with open(os.path.join(SCRIPT_DIR, "tpl_Makefile"), "r", encoding="utf-8") as stream:
             raw_content = stream.read()
 
-        if self.app_config.has_template():
-            app_dir = os.path.join(os.path.join(self.target_config["base"], "apps"), self.app_config.config['template'])
-        else:
-            app_dir = os.getcwd()
         libs = ""
         if 'libraries' in self.app_config.config.keys():
             for l in self.app_config.config["libraries"].keys():
@@ -739,6 +764,11 @@ def _generate_makefile(self):
         base = self.target_config["base"]
         target_dir = self.dir
 
+        if self.app_config.has_template():
+            app_dir = os.path.join(os.path.join(self.target_config["base"], "apps"), self.app_config.config['template'])
+        else:
+            app_dir = os.getcwd()
+
         content = raw_content.format(**locals())
 
         with open(os.path.join(self.dir, "Makefile"), "w", encoding="utf-8") as stream:
@@ -892,10 +922,6 @@ def _generate_build_make_einitrd(self):
         with open(os.path.join(SCRIPT_DIR, "tpl_build_make_einitrd.sh"), "r", encoding="utf-8") as stream:
             raw_content = stream.read()
 
-        if self.app_config.has_template():
-            app_dir = os.path.join(os.path.join(self.target_config["base"], "apps"), self.app_config.config['template'])
-        else:
-            app_dir = os.getcwd()
         base = self.target_config["base"]
         target_dir = self.dir
         rootfs = os.path.join(os.getcwd(), self.app_config.config["rootfs"])
@@ -910,28 +936,6 @@ def _generate_build_make_einitrd(self):
             stream.write(content)
         os.chmod(os.path.join(self.dir, "build"), 0o755)
 
-    def _generate_fs(self):
-        """Generate file system for examples for Make-based build."""
-
-        with open(os.path.join(SCRIPT_DIR, "tpl_build_fs.sh"), "r", encoding="utf-8") as stream:
-            raw_content = stream.read()
-
-        if self.app_config.has_template():
-            app_dir = os.path.join(os.path.join(self.target_config["base"], "apps"), self.app_config.config['template'])
-        else:
-            app_dir = os.getcwd()
-        base = self.target_config["base"]
-        target_dir = self.dir
-        rootfs = os.path.join(os.getcwd(), self.app_config.config["rootfs"])
-        name = self.app_config.config["name"]
-        init_dir = os.getcwd()
-
-        content = raw_content.format(**locals())
-
-        with open(os.path.join(self.dir, "build"), "w", encoding="utf-8") as stream:
-            stream.write(content)
-        os.chmod(os.path.join(self.dir, "build"), 0o755)
-
     def _generate_build_kraft(self):
         """Generate build script for Kraft-based build."""
 
@@ -963,9 +967,6 @@ def generate(self):
                 else:
                     self._generate_build_make()
                 self._generate_run_kraftfile()
-            else:
-                if self.app_config.config["rootfs"]:
-                    self._generate_fs()
         elif self.config['build_tool'] == 'kraft':
             self._generate_kraftfile()
             self._generate_build_kraft()
@@ -1016,7 +1017,11 @@ def _generate_from_template(self, template_name, output_name):
         if self.config["networking"] == "nat" and arch == "arm64":
             name = ""
 
-        print(template_name)
+        if self.app_config.has_template():
+            app_dir = os.path.join(os.path.join(self.target_config["base"], "apps"), self.app_config.config['template'])
+        else:
+            app_dir = os.getcwd()
+
         content = raw_content.format(**locals())
 
         with open(os.path.join(self.dir, output_name), "w", encoding="utf-8") as stream:
@@ -1120,6 +1125,7 @@ def main():
 
     t = TesterConfig(sys.argv[1])
     a = AppConfig()
+    a.generate_init(t)
     s = SystemConfig()
 
     copy_common()
@@ -1128,6 +1134,5 @@ def main():
     for t in targets:
         t.generate()
 
-
 if __name__ == "__main__":
     sys.exit(main())
diff --git a/utils/new-design/tpl_app_fs_init.sh b/utils/new-design/tpl_app_fs_init.sh
new file mode 100644
index 00000000..178b2c74
--- /dev/null
+++ b/utils/new-design/tpl_app_fs_init.sh
@@ -0,0 +1,27 @@
+#!/bin/sh
+
+init_rootfs="{rootfs}"
+testing_rootfs="{init_dir}/.rootfs-for-testing"
+
+# If no root filesystem, exit.
+if test -z "$init_rootfs"; then
+    exit 0
+fi
+
+# Use $testing_rootfs as the rootfs for testing.
+rm -fr "$testing_rootfs"
+mkdir "$testing_rootfs"
+
+# If rootfs is Dockerfile, create directory from Dockerfile.
+if test "$(basename "$init_rootfs")" = "Dockerfile"; then
+    image_name="uk-{name}"
+    d=$(pwd)
+    cd {init_dir}
+    docker build -o "$testing_rootfs" -f "$init_rootfs" -t "$image_name" .
+    cd "$d"
+else
+    cp -r "$init_rootfs"/* "$testing_rootfs"
+fi
+
+# Create CPIO archive to be used as the embedded initrd.
+{base}/unikraft/support/scripts/mkcpio {app_dir}/initrd.cpio "$testing_rootfs"
diff --git a/utils/new-design/tpl_build_fs.sh b/utils/new-design/tpl_build_fs.sh
deleted file mode 100644
index c6fe5db7..00000000
--- a/utils/new-design/tpl_build_fs.sh
+++ /dev/null
@@ -1,23 +0,0 @@
-#!/bin/sh
-
-init_rootfs="{rootfs}"
-
-# Use "rootfs" as the actual rootfs directory.
-rootfs="{target_dir}/rootfs"
-rm -fr "$rootfs"
-mkdir "$rootfs"
-
-# If rootfs is Dockerfile, create directory from Dockerfile.
-if test "$(basename "$init_rootfs")" = "Dockerfile"; then
-    image_name="uk-{name}"
-    d=$(pwd)
-    cd {init_dir}
-    docker build -o "$rootfs" -f "$init_rootfs" -t "$image_name" .
-    cd "$d"
-else
-    rootfs="$init_rootfs"
-    cp -r "$init_rootfs"/* "$rootfs"
-fi
-
-# Create CPIO archive to be used as the embedded initrd.
-{base}/unikraft/support/scripts/mkcpio {app_dir}/initrd.cpio "$rootfs"
diff --git a/utils/new-design/tpl_build_kraft.sh b/utils/new-design/tpl_build_kraft.sh
index 969181e5..28f5dc73 100644
--- a/utils/new-design/tpl_build_kraft.sh
+++ b/utils/new-design/tpl_build_kraft.sh
@@ -1,15 +1,5 @@
 #!/bin/sh
 
-init_rootfs="{rootfs}"
-rootfs="{target_dir}/rootfs"
-
-if test ! -z "$rootfs"; then
-    if test ! "$(basename "$init_rootfs")" = "Dockerfile"; then
-        rm -fr "$rootfs"
-        cp -r "$init_rootfs" "$rootfs"
-    fi
-fi
-
 rm -fr {target_dir}/.unikraft/build
 rm -f {target_dir}/.config.*
 kraft build --log-level debug --log-type basic --no-cache --no-update --plat {plat} --arch {arch} {target_dir}
diff --git a/utils/new-design/tpl_build_make_einitrd.sh b/utils/new-design/tpl_build_make_einitrd.sh
index 484f2233..f6b3b42f 100644
--- a/utils/new-design/tpl_build_make_einitrd.sh
+++ b/utils/new-design/tpl_build_make_einitrd.sh
@@ -1,26 +1,5 @@
 #!/bin/sh
 
-init_rootfs="{rootfs}"
-
-# Use "rootfs" as the actual rootfs directory.
-rootfs="{target_dir}/rootfs"
-rm -fr "$rootfs"
-mkdir "$rootfs"
-
-# If rootfs is Dockerfile, create directory from Dockerfile.
-if test "$(basename "$init_rootfs")" = "Dockerfile"; then
-    image_name="uk-{name}"
-    d=$(pwd)
-    cd {init_dir}
-    docker build -o "$rootfs" -f "$init_rootfs" -t "$image_name" .
-    cd "$d"
-else
-    cp -r "$init_rootfs"/* "$rootfs"
-fi
-
-# Create CPIO archive to be used as the embedded initrd.
-{base}/unikraft/support/scripts/mkcpio {target_dir}/initrd.cpio "$rootfs"
-
 test -d {target_dir}/.unikraft/build || mkdir -p {target_dir}/.unikraft/build
 make -f {target_dir}/Makefile distclean
 UK_DEFCONFIG={target_dir}/defconfig make -f {target_dir}/Makefile defconfig
diff --git a/utils/new-design/tpl_run_firecracker_net_bridge_initrd.sh b/utils/new-design/tpl_run_firecracker_net_bridge_initrd.sh
index 5658e71c..78af186c 100644
--- a/utils/new-design/tpl_run_firecracker_net_bridge_initrd.sh
+++ b/utils/new-design/tpl_run_firecracker_net_bridge_initrd.sh
@@ -32,11 +32,6 @@ sudo ip link set dev virbr0@if0 master virbr0
 # Add IP address to bridge interface
 sudo ip address add 172.44.0.1/24 dev virbr0
 
-rootfs={target_dir}/rootfs
-
-# Create CPIO archive to be used as the initrd.
-{base}/unikraft/support/scripts/mkcpio {run_dir}/initrd.cpio "$rootfs"
-
 # Remove previously created files.
 sudo rm -f /tmp/firecracker.log
 touch /tmp/firecracker.log
diff --git a/utils/new-design/tpl_run_firecracker_net_tap_initrd.json b/utils/new-design/tpl_run_firecracker_net_tap_initrd.json
index adcab17a..0e56ec0c 100644
--- a/utils/new-design/tpl_run_firecracker_net_tap_initrd.json
+++ b/utils/new-design/tpl_run_firecracker_net_tap_initrd.json
@@ -2,7 +2,7 @@
   "boot-source": {{
     "kernel_image_path": "{kernel}",
     "boot_args": "{name} netdev.ip=172.44.0.2/24:172.44.0.1::: vfs.fstab=[ \"initrd0:/:extract::ramfs=1:\" ] -- {cmd}",
-    "initrd_path": "{run_dir}/initrd.cpio"
+    "initrd_path": "{app_dir}/initrd.cpio"
   }},
   "drives": [],
   "machine-config": {{
diff --git a/utils/new-design/tpl_run_firecracker_nonet_initrd.json b/utils/new-design/tpl_run_firecracker_nonet_initrd.json
index f4447463..9b65e88c 100644
--- a/utils/new-design/tpl_run_firecracker_nonet_initrd.json
+++ b/utils/new-design/tpl_run_firecracker_nonet_initrd.json
@@ -2,7 +2,7 @@
   "boot-source": {{
     "kernel_image_path": "{kernel}",
     "boot_args": "{name} vfs.fstab=[ \"initrd0:/:extract::ramfs=1:\" ] -- {cmd}",
-    "initrd_path": "{run_dir}/initrd.cpio"
+    "initrd_path": "{app_dir}/initrd.cpio"
   }},
   "drives": [],
   "machine-config": {{
diff --git a/utils/new-design/tpl_run_firecracker_nonet_initrd.sh b/utils/new-design/tpl_run_firecracker_nonet_initrd.sh
index 46426c1d..45242f54 100644
--- a/utils/new-design/tpl_run_firecracker_nonet_initrd.sh
+++ b/utils/new-design/tpl_run_firecracker_nonet_initrd.sh
@@ -12,11 +12,6 @@ sudo KRAFTKIT_NO_WARN_SUDO=1 kraft stop --all
 sudo KRAFTKIT_NO_WARN_SUDO=1 kraft rm --all
 }} > /dev/null 2>&1
 
-rootfs={target_dir}/rootfs
-
-# Create CPIO archive to be used as the initrd.
-{base}/unikraft/support/scripts/mkcpio {run_dir}/initrd.cpio "$rootfs"
-
 # Remove previously created files.
 sudo rm -f /tmp/firecracker.log
 touch /tmp/firecracker.log
diff --git a/utils/new-design/tpl_run_qemu_net_bridge_initrd.sh b/utils/new-design/tpl_run_qemu_net_bridge_initrd.sh
index 0a36399b..9beefc5c 100644
--- a/utils/new-design/tpl_run_qemu_net_bridge_initrd.sh
+++ b/utils/new-design/tpl_run_qemu_net_bridge_initrd.sh
@@ -30,10 +30,6 @@ sudo ip link add dev virbr0 type bridge
 sudo ip address add 172.44.0.1/24 dev virbr0
 sudo ip link set dev virbr0 up
 
-rootfs={target_dir}/rootfs
-
-# Create CPIO archive to be used as the initrd.
-{base}/unikraft/support/scripts/mkcpio {run_dir}/initrd.cpio "$rootfs"
 sudo {vmm} \
     {hypervisor_option} \
     {machine} \
@@ -42,5 +38,5 @@ sudo {vmm} \
     -m {memory}M \
     -netdev bridge,id=en0,br=virbr0 -device virtio-net-pci,netdev=en0 \
     -append "{name} netdev.ip=172.44.0.2/24:172.44.0.1::: vfs.fstab=[ \"initrd0:/:extract::ramfs=1:\" ] -- $cmd" \
-    -initrd {run_dir}/initrd.cpio \
+    -initrd {app_dir}/initrd.cpio \
     -cpu max
diff --git a/utils/new-design/tpl_run_qemu_net_nat_initrd.sh b/utils/new-design/tpl_run_qemu_net_nat_initrd.sh
index 65d181d9..9264f8cd 100644
--- a/utils/new-design/tpl_run_qemu_net_nat_initrd.sh
+++ b/utils/new-design/tpl_run_qemu_net_nat_initrd.sh
@@ -15,10 +15,6 @@ kraft stop --all
 kraft rm --all
 }} > /dev/null 2>&1
 
-rootfs={target_dir}/rootfs
-
-# Create CPIO archive to be used as the initrd.
-{base}/unikraft/support/scripts/mkcpio {run_dir}/initrd.cpio "$rootfs"
 {vmm} \
     {hypervisor_option} \
     {machine} \
@@ -28,5 +24,5 @@ rootfs={target_dir}/rootfs
     -device virtio-net-pci,mac=02:b0:b0:1d:be:01,netdev=hostnet0 \
     -netdev user,id=hostnet0,hostfwd=tcp::{port_ext}-:{port_int} \
     -append "{name} vfs.fstab=[ \"initrd0:/:extract::ramfs=1:\" ] -- $cmd" \
-    -initrd {run_dir}/initrd.cpio \
+    -initrd {app_dir}/initrd.cpio \
     -cpu max
diff --git a/utils/new-design/tpl_run_qemu_nonet_initrd.sh b/utils/new-design/tpl_run_qemu_nonet_initrd.sh
index d823daaf..2c596859 100644
--- a/utils/new-design/tpl_run_qemu_nonet_initrd.sh
+++ b/utils/new-design/tpl_run_qemu_nonet_initrd.sh
@@ -15,10 +15,6 @@ kraft stop --all
 kraft rm --all
 }} > /dev/null 2>&1
 
-rootfs={target_dir}/rootfs
-
-# Create CPIO archive to be used as the initrd.
-{base}/unikraft/support/scripts/mkcpio {run_dir}/initrd.cpio "$rootfs"
 {vmm} \
     {hypervisor_option} \
     {machine} \
@@ -26,5 +22,5 @@ rootfs={target_dir}/rootfs
     -nographic \
     -m {memory}M \
     -append "{name} vfs.fstab=[ \"initrd0:/:extract::ramfs=1:\" ] -- $cmd" \
-    -initrd {run_dir}/initrd.cpio \
+    -initrd {app_dir}/initrd.cpio \
     -cpu max