Please amend your steps to use the new setup procedure for this,
# Linux:
wget https://raw.githubusercontent.com/frappe/bench/master/playbooks/install.py
# For development
sudo python install.py --develop
# For production
sudo python install.py --production
# If you're logged in as root, use --user flag to create a user and install using that user
sudo python install.py --develop --user frappe
setup_frappe Shell script is not supported from version 7