I’m going to play devil’s advocate here for just a second. The piece was sitting in your portfolio… not doing much of anything, now these people want to make it, and it will be a way better portfolio piece as something in production right?
Also, you bill for the hours it took, not the hours you wish it took, or it could of took, or maybe would have took. It is already public, and so there is no need to remove it from your portfolio.
Here is an alternative to the advice above, I say either:
- multiply the hours it took by your current freelance rate with them (pretty fare if you think of the fact you already have a relationship and fee structure with them)
- ask for a royalty
- do a reduced rate + smaller royalty
No matter what you do, make sure you retain the right to publicize the design as your work.