diff --git a/guides/source/rails_application_templates.md b/guides/source/rails_application_templates.md
index f8062a1f7c308eabfccad9db6cca69d399d7f298..0c70f379bec4eb98c3eb45b965aed5e0ffc90c7d 100644
--- a/guides/source/rails_application_templates.md
+++ b/guides/source/rails_application_templates.md
@@ -227,3 +227,22 @@ git :init
 git add: "."
 git commit: "-a -m 'Initial commit'"
 ```
+
+Advanced Usage
+--------------
+
+The application template is evaluated in the context of a
+`Rails::Generators::AppGenerator` instance. It uses the `apply` action
+provided by
+[Thor](https://github.com/erikhuda/thor/blob/master/lib/thor/actions.rb#L207).
+This means you can extend and change the instance to match your needs.
+
+For example by overwriting the `source_paths` method to contain the
+location of your template. Now methods like `copy_file` will accept
+relative paths to your template's location.
+
+```ruby
+def source_paths
+  [File.expand_path(File.dirname(__FILE__))]
+end
+```