diff --git a/pkg/rescaffold/migrate.go b/pkg/rescaffold/migrate.go
index caf069e93e..9f02efac10 100644
--- a/pkg/rescaffold/migrate.go
+++ b/pkg/rescaffold/migrate.go
@@ -36,20 +36,24 @@ const DefaultOutputDir = "output-dir"
 func (opts *MigrateOptions) Rescaffold() error {
 	config := yaml.New(machinery.Filesystem{FS: afero.NewOsFs()})
 	if err := config.LoadFrom(opts.InputDir); err != nil {
-		log.Fatal(err)
+		log.Fatalf("Failed to load PROJECT file %v", err)
 	}
 	// create output directory
 	// nolint: gosec
 	if err := os.MkdirAll(opts.OutputDir, 0755); err != nil {
-		log.Fatal(err)
+		log.Fatalf("Failed to create output directory %v", err)
 	}
 	// use the new directory to set up the new project
 	if err := os.Chdir(opts.OutputDir); err != nil {
-		log.Fatal(err)
+		log.Fatalf("Failed to change the current working directory %v", err)
 	}
 	// init project with plugins
 	if err := kubebuilderInit(config); err != nil {
-		log.Fatal(err)
+		log.Fatalf("Failed to run init subcommand %v", err)
+	}
+	// call edit subcommands to enable or disable multigroup layout
+	if err := kubebuilderEdit(config); err != nil {
+		log.Fatalf("Failed to run edit subcommand %v", err)
 	}
 	return nil
 }
@@ -107,6 +111,14 @@ func kubebuilderInit(store store.Store) error {
 	return util.RunCmd("kubebuilder init", "kubebuilder", args...)
 }
 
+func kubebuilderEdit(store store.Store) error {
+	if store.Config().IsMultiGroup() {
+		args := []string{"edit", "--multigroup"}
+		return util.RunCmd("kubebuilder edit", "kubebuilder", args...)
+	}
+	return nil
+}
+
 func getInitArgs(store store.Store) []string {
 	var args []string
 	plugins := store.Config().GetPluginChain()
diff --git a/test/e2e/alphagenerate/generate_test.go b/test/e2e/alphagenerate/generate_test.go
index b2d455a513..d20dfdd21f 100644
--- a/test/e2e/alphagenerate/generate_test.go
+++ b/test/e2e/alphagenerate/generate_test.go
@@ -93,4 +93,24 @@ func ReGenerateProject(kbc *utils.TestContext) {
 		filepath.Join(kbc.Dir, "testdir", "PROJECT"), version)
 	ExpectWithOffset(1, err).NotTo(HaveOccurred())
 	ExpectWithOffset(1, fileContainsExpr).To(BeTrue())
+
+	By("editing a project with multigroup=true")
+	err = kbc.Edit(
+		"--multigroup=true",
+	)
+	ExpectWithOffset(1, err).NotTo(HaveOccurred())
+
+	By("regenerating the project at another output directory")
+	err = kbc.Regenerate(
+		"--input-dir", kbc.Dir,
+		"--output-dir", filepath.Join(kbc.Dir, "testdir2"),
+	)
+	ExpectWithOffset(1, err).NotTo(HaveOccurred())
+
+	By("checking if the project file was generated with the expected multigroup flag")
+	var multiGroup = `multigroup: true`
+	fileContainsExpr, err = pluginutil.HasFileContentWith(
+		filepath.Join(kbc.Dir, "testdir2", "PROJECT"), multiGroup)
+	ExpectWithOffset(1, err).NotTo(HaveOccurred())
+	ExpectWithOffset(1, fileContainsExpr).To(BeTrue())
 }