1:

After your design has sewn out, turn it upside down to gain access to the white bobbin stitches. Cut the white bobbin stitches with small sewing scissors, while being careful not to cut through the fabric.

 2:

Flip the design back over so it is right side up. Pull fringe stitches free with the tip of your sewing scissors.

 3:

Now you have "Fringe" which you can leave as is or trim with scissors, depending on the look you want to achieve.