Next Generation Hockey

Derek Miller
Ottawa, ON

The pitch

Derek Miller from Ottawa, ON, pitched Next Generation Hockey in Season 12, Episode 2, asking the Dragons for $100K for 16% of the company.

Asked for$100K for 16%
Valuation$625Kimplied by the ask
OutcomeDealwith Michael Wekerle
Final deal$100Kplus a royalty: 33% equity partnership structured as a royalty/license-based revenue business

Offers in the Den

Dragon	Offer	Result
Manjit Minhas	Felt there was not enough money to be made given the capital required	Out
Jim Treliving	Called it a case of big fish, little pond syndrome, too niche	Out
Michael Wekerle	$100,000 for a third of the business as a royalty/licensing partnership, bringing in Jim Treliving as a partner	Accepted
Joe Mimran	Did not see it as a franchise business and preferred a licensing structure	Out
Arlene Dickinson	Felt significant marketing spend would be needed and could not see getting her money back	Out

Derek Miller, from Ottawa, ON, asked for $100,000 for 16% of Next Generation HKY, a hockey development company founded in 2009 that trains about 6,500 players annually using skating treadmills. The company opened its first skating treadmill training centre in 2014 and a second in early 2015, trains at $40 per session down to under $20 with memberships, and generated $242,000 in revenue last year from two treadmills with a 64% profit margin. Each machine costs between $90,000 and $135,000 to purchase, and Derek Miller holds a signed first right of refusal agreement with the Canadian distributor of the machines since 2004, with a franchise location opening in Gatineau, Quebec and a partnership agreement in place for another Ottawa location.

Manjit Minhas and Jim Treliving initially went out over concerns about the capital required and the niche size of the market, while Joe Mimran and Arlene Dickinson also declined over marketing costs and preferring a different business structure. Michael Wekerle offered $100,000 for a third of the business structured as a licensing/royalty partnership and brought Jim Treliving back in as a partner, which Derek Miller accepted.

Pitch details from CBC’s Dragons’ Den pitch page.