What is a Template?
A photo template is a multi-layered PSD file and a set of specifications on how layers should be arranged. Below you can see an exemplary diagram showing the structure of a simple template:

You can see examples of templates at funny.pho.to and in mobile apps made by Pho.to (Photo Lab for iOS, Photo Lab for Android). Templates allow users to edit their photos (let’s call them "user photos" or "photos" from now on) easily, in a single click or tap.
Apply templates to different photos (with faces a bit turned, different skin colors, different quality (e.g. overexposed or underexposed)), to see how multi-purposed your templates should be.
Templates can be very different: collages and photomontages of all kinds, simple and complicated frames, filters, textures, face in hole effects with automatic face recognition, etc. Learn more about template types below.