AdorableApplique has 2 sets of instructions. Seeing by which project you asked your question I'll give you one of the links. You hoop the stabiliser and place the towel, the front applique fabric and the fabric for the back according to the pictures. Image 8, 9 and 10 show the backside.
It really depends on the design you want to use. Some of them are an applique that you add an elastic band to the back (example link #1)
of and slip the towel through it.
Others have a hole embroidered into it (example link #2)
to cut out and the whole design is embroidered right onto the towel then you hang it with the hole.
I found your question in projects
It was not answered.
If you read further down the replies you will see a link that mops posted about the universal shape that hollyfox posted in designs by cuties.
thank you so much
most of the towels I have done the hole is in the design. But a couple of others have a ribbon or band on the back to put the towel through.
Good question. I haven't done one yet ;D *2U