diff --git a/test/different-folder-for-checked-in-repos/default_ruby/Gemfile b/test/different-folder-for-checked-in-repos/default_ruby/Gemfile
new file mode 100644
index 0000000..20b4d4a
--- /dev/null
+++ b/test/different-folder-for-checked-in-repos/default_ruby/Gemfile
@@ -0,0 +1 @@
+source 'https://rubygems.org'
diff --git a/test/different-folder-for-checked-in-repos/default_ruby/Gemfile.lock b/test/different-folder-for-checked-in-repos/default_ruby/Gemfile.lock
new file mode 100644
index 0000000..61268f8
--- /dev/null
+++ b/test/different-folder-for-checked-in-repos/default_ruby/Gemfile.lock
@@ -0,0 +1,11 @@
+GEM
+  remote: https://rubygems.org/
+  specs:
+
+PLATFORMS
+  ruby
+
+DEPENDENCIES
+
+BUNDLED WITH
+   1.16.2
diff --git a/test/hatchet/local_repo_test.rb b/test/hatchet/local_repo_test.rb
new file mode 100644
index 0000000..184c782
--- /dev/null
+++ b/test/hatchet/local_repo_test.rb
@@ -0,0 +1,14 @@
+require 'test_helper'
+
+class AppTest < Minitest::Test
+  def test_repos_checked_into_git
+    app = Hatchet::App.new("test/different-folder-for-checked-in-repos/default_ruby")
+    app.in_directory do
+      assert_equal false, Dir.exist?(".git")
+      app.setup!
+      assert_equal true, Dir.exist?(".git")
+    end
+  ensure
+    app.teardown! if app
+  end
+end