Who ever is creating and supplying the kit should get to fee for it. It sounds like they need a reality check...
The few classes I have looked at doing where the teacher was selling something involved with the class, the LQS got a percentage of the total sales..but nothing like 40%. usually 10 or 15% because they know they are going to pick up sales from the class either in fabric or notions.
You are helping them promote their new business and draw in new customers. Your deal should reflect that idea.