Hi this is a great question & I am pretty sure that if you go to adorable applique they have a picture tutorial that I found very helpful & maybe you will too! Good luck. Loralye

Usually you stitch the first colour on stabiliser only. Then you place your towel against this line and sew more colours. You should get a placement line for the hole as well. After that you cut away the fabric not the stabiliser. It depends a bit on the design you're using when the stitches for the hole are place. There are nice tutorials on Adorable Applique that explain everything with pictures.