Problem

The owners had tried unsuccessfully to reach agreements with potential partners. On a subsequent negotiation, the ‘heads of agreement’ exposed Misfit Shapes to unnecessary risks in the calculation of their royalties, it also didn’t support the immediate working capital needs of the growing the business.

Solution

The directors appointed Tim to advise and support them in the negotiating and securing a licencing agreement for the Misfit brand with a mass-market surf and shoe brand. Tim devised an alternative method for calculating the royalties that removed Misfit Shapes from exposure to risks that they couldn’t control, like manufacturing efficiency and costs. This was modelled for the owners, and then accepted by the skate and surf brand’s management team. Tim also supported the owners through the negotiation process by identifying potentially unfavourable clauses in the proposed licencing agreement and keeping the deal on track with daily update meetings.

Results

The licencing agreement was struck, and Misfit Shapes received a six-figure working capital injection needed for growth. Since 2015, the agreement has yielded over $400,000 in royalties which have supported significant expansion both domestically and globally. The partnership with the skate and shoe brand has evolved into numerous pop-up stores and consulting engagements that would have otherwise been out of reach.