diff --git a/.gitignore b/.gitignore
index e9de00a..ec663aa 100644
--- a/.gitignore
+++ b/.gitignore
@@ -6,6 +6,9 @@ out
 dist
 *.tgz
 
+# generated templates archive (created during prepare script)
+templates.zip
+
 # code coverage
 coverage
 *.lcov
diff --git a/bun.lock b/bun.lock
index 706f8db..e7c3b35 100644
--- a/bun.lock
+++ b/bun.lock
@@ -6,9 +6,11 @@
       "name": "create-elysiajs",
       "dependencies": {
         "@clack/prompts": "^0.11.0",
+        "adm-zip": "^0.5.16",
       },
       "devDependencies": {
         "@biomejs/biome": "2.3.10",
+        "@types/adm-zip": "^0.5.7",
         "@types/bun": "^1.3.5",
       },
     },
@@ -36,10 +38,14 @@
 
     "@clack/prompts": ["@clack/prompts@0.11.0", "", { "dependencies": { "@clack/core": "0.5.0", "picocolors": "^1.0.0", "sisteransi": "^1.0.5" } }, "sha512-pMN5FcrEw9hUkZA4f+zLlzivQSeQf5dRGJjSUbvVYDLvpKCdQx5OaknvKzgbtXOizhP+SJJJjqEbOe55uKKfAw=="],
 
+    "@types/adm-zip": ["@types/adm-zip@0.5.7", "", { "dependencies": { "@types/node": "*" } }, "sha512-DNEs/QvmyRLurdQPChqq0Md4zGvPwHerAJYWk9l2jCbD1VPpnzRJorOdiq4zsw09NFbYnhfsoEhWtxIzXpn2yw=="],
+
     "@types/bun": ["@types/bun@1.3.5", "", { "dependencies": { "bun-types": "1.3.5" } }, "sha512-RnygCqNrd3srIPEWBd5LFeUYG7plCoH2Yw9WaZGyNmdTEei+gWaHqydbaIRkIkcbXwhBT94q78QljxN0Sk838w=="],
 
     "@types/node": ["@types/node@25.0.3", "", { "dependencies": { "undici-types": "~7.16.0" } }, "sha512-W609buLVRVmeW693xKfzHeIV6nJGGz98uCPfeXI1ELMLXVeKYZ9m15fAMSaUPBHYLGFsVRcMmSCksQOrZV9BYA=="],
 
+    "adm-zip": ["adm-zip@0.5.16", "", {}, "sha512-TGw5yVi4saajsSEgz25grObGHEUaDrniwvA2qwSC060KfqGPdglhvPMA2lPIoxs3PQIItj2iag35fONcQqgUaQ=="],
+
     "bun-types": ["bun-types@1.3.5", "", { "dependencies": { "@types/node": "*" } }, "sha512-inmAYe2PFLs0SUbFOWSVD24sg1jFlMPxOjOSSCYqUgn4Hsc3rDc7dFvfVYjFPNHtov6kgUeulV4SxbuIV/stPw=="],
 
     "picocolors": ["picocolors@1.1.1", "", {}, "sha512-xceH2snhtb5M9liqDsmEw56le376mTZkEX/jEb/RxNFyegNul7eNslCXP9FDj/Lcu0X8KEyMceP2ntpaHrDEVA=="],
diff --git a/package.json b/package.json
index 5229aa0..2f22a62 100644
--- a/package.json
+++ b/package.json
@@ -38,10 +38,18 @@
   "bin": {
     "create-ely": "./src/index.ts"
   },
-  "files": ["src", "templates", "README.md", "LICENSE"],
+  "files": [
+    "src",
+    "templates.zip",
+    "scripts/postinstall.ts",
+    "README.md",
+    "LICENSE"
+  ],
   "scripts": {
     "dev": "bun run src/index.ts",
-    "build": "bun build src/index.ts --compile --outfile dist/create-ely"
+    "build": "bun build src/index.ts --compile --outfile dist/create-ely",
+    "prepare": "bun run scripts/prepare.ts",
+    "postinstall": "bun run scripts/postinstall.ts"
   },
   "engines": {
     "bun": ">=1.0.0"
@@ -51,10 +59,12 @@
     "registry": "https://registry.npmjs.org/"
   },
   "dependencies": {
-    "@clack/prompts": "^0.11.0"
+    "@clack/prompts": "^0.11.0",
+    "adm-zip": "^0.5.16"
   },
   "devDependencies": {
     "@biomejs/biome": "2.3.10",
+    "@types/adm-zip": "^0.5.7",
     "@types/bun": "^1.3.5"
   }
 }
diff --git a/scripts/postinstall.ts b/scripts/postinstall.ts
new file mode 100644
index 0000000..00734ad
--- /dev/null
+++ b/scripts/postinstall.ts
@@ -0,0 +1,43 @@
+#!/usr/bin/env bun
+import { existsSync } from 'node:fs';
+import { join } from 'node:path';
+import AdmZip from 'adm-zip';
+
+/**
+ * Postinstall script that runs after package installation
+ * Unzips the templates folder to restore .gitignore files
+ * See: https://johnnyreilly.com/smuggling-gitignore-npmrc-in-npm-packages
+ */
+const templatesPath = join(import.meta.dir, '..', 'templates');
+const zipPath = join(import.meta.dir, '..', 'templates.zip');
+
+// Skip if templates folder already exists (source repo or already extracted)
+if (existsSync(templatesPath)) {
+  process.exit(0);
+}
+
+// Zip file must exist in installed package
+if (!existsSync(zipPath)) {
+  console.error(
+    'ERROR: templates.zip not found. Installation may be corrupted.',
+  );
+  process.exit(1);
+}
+
+try {
+  const zip = new AdmZip(zipPath);
+  zip.extractAllTo(templatesPath, true);
+
+  if (!existsSync(templatesPath)) {
+    throw new Error('Templates folder was not created after extraction');
+  }
+} catch (error) {
+  console.error(
+    'ERROR: Failed to extract templates:',
+    error instanceof Error ? error.message : error,
+  );
+  console.error(
+    'Report this issue: https://github.com/truehazker/create-ely/issues',
+  );
+  process.exit(1);
+}
diff --git a/scripts/prepare.ts b/scripts/prepare.ts
new file mode 100644
index 0000000..06bedba
--- /dev/null
+++ b/scripts/prepare.ts
@@ -0,0 +1,42 @@
+#!/usr/bin/env bun
+import { existsSync, unlinkSync } from 'node:fs';
+import { join } from 'node:path';
+import AdmZip from 'adm-zip';
+
+/**
+ * Prepare script that runs before publishing
+ * Zips the templates folder to preserve .gitignore files
+ * See: https://johnnyreilly.com/smuggling-gitignore-npmrc-in-npm-packages
+ */
+const templatesPath = join(import.meta.dir, '..', 'templates');
+const zipPath = join(import.meta.dir, '..', 'templates.zip');
+
+// Templates folder must exist
+if (!existsSync(templatesPath)) {
+  console.error('ERROR: templates folder not found. Cannot create archive.');
+  process.exit(1);
+}
+
+try {
+  // Remove existing zip if it exists
+  if (existsSync(zipPath)) {
+    unlinkSync(zipPath);
+  }
+
+  // Create zip archive
+  const zip = new AdmZip();
+  zip.addLocalFolder(templatesPath);
+  zip.writeZip(zipPath);
+
+  if (!existsSync(zipPath)) {
+    throw new Error('templates.zip was not created');
+  }
+
+  console.log('✓ templates.zip created successfully');
+} catch (error) {
+  console.error(
+    'ERROR: Failed to create templates.zip:',
+    error instanceof Error ? error.message : error,
+  );
+  process.exit(1);
+}