If your fabric is fraying, it is probably due to the fact that there is a bias area on your applique. This happens often when you are using curved pieces. EX: going from crosswise to lengthwise grain you have some bias areas. One solution to this: USE A VERY FINE LINE of fray check, or fabric glue on the very edge of the fabric, let it dry. Most dry clear, test a sample first. Most of the time the stitching will cover the fray check or fabric glue. Hope this helps!