diff --git a/packages/cli/lib/project-generator.js b/packages/cli/lib/project-generator.js
index f6f3c0d03ccd..95092839fbbf 100644
--- a/packages/cli/lib/project-generator.js
+++ b/packages/cli/lib/project-generator.js
@@ -7,6 +7,7 @@
 const BaseGenerator = require('./base-generator');
 const utils = require('./utils');
 const chalk = require('chalk');
+const path = require('path');
 
 module.exports = class ProjectGenerator extends BaseGenerator {
   // Note: arguments and options should be defined in the constructor.
@@ -131,7 +132,7 @@ module.exports = class ProjectGenerator extends BaseGenerator {
         name: 'name',
         message: 'Project name:',
         when: this.projectInfo.name == null,
-        default: this.options.name || this.appname,
+        default: this.options.name || path.basename(process.cwd()),
         validate: utils.validate,
       },
       {
diff --git a/packages/cli/lib/utils.js b/packages/cli/lib/utils.js
index b7f68a96e874..4690b429e262 100644
--- a/packages/cli/lib/utils.js
+++ b/packages/cli/lib/utils.js
@@ -103,8 +103,16 @@ exports.validateClassName = function(name) {
 
 /**
  * Validate project directory to not exist
+ * and check if the directory path is based on CWD
  */
 exports.validateNotExisting = function(projDir) {
+  const invalidPath = projDir.split('/').includes('~');
+  if (invalidPath) {
+    return util.format(
+      'The path sholud be based on current directory: %s.',
+      projDir,
+    );
+  }
   if (fs.existsSync(projDir)) {
     return util.format('Directory %s already exists.', projDir);
   }
diff --git a/packages/cli/test/unit/utils.unit.js b/packages/cli/test/unit/utils.unit.js
index c29d38508cf9..a2d015030b40 100644
--- a/packages/cli/test/unit/utils.unit.js
+++ b/packages/cli/test/unit/utils.unit.js
@@ -469,6 +469,17 @@ describe('Utils', () => {
     });
   });
 
+  describe('validateNotExisting', () => {
+    it.only("returns true on the path contains the root folder '~'", () => {
+      expect(utils.validateNotExisting('~/try/pathFromRoot')).to.be.eql(
+        'The path sholud be based on current directory: ~/try/pathFromRoot.',
+      );
+    });
+    it.only("returns false on the path that folder's name contains hyphens", () => {
+      expect(utils.validateNotExisting('/try~/validPath')).to.be.True();
+    });
+  });
+
   describe('getDataSourceName', () => {
     it('returns false on missing dataSourceClass parameter', () => {
       expect(utils.getDataSourceName('src/datasources')).to.be.False();