Commercial Referral Fee Agreement
For Informational Purposes Only
A structured fee agreement for businesses that compensate outside referrers for customer introductions — covering registration mechanics, fee calculation, clawbacks, compliance gates, and regulatory stop-checks for securities, real estate, and other regulated referrals.
What This Document Does
A referral fee agreement formalizes the relationship between a company that sells products or services (the “Principal”) and an outside party that introduces prospective customers (the “Referrer”). It defines what counts as a qualifying referral, how fees are calculated and paid, what the referrer can and cannot do, and when the arrangement ends.
This template uses a registration-based system: the referrer submits each prospect through a documented process, the principal accepts or rejects within a defined window, and accepted referrals receive a protection period during which the referrer earns fees on resulting contracts. The structure prevents disputes over who originated a deal and gives both sides a clear paper trail.
Why Startups Need This
Early-stage companies often grow through informal introductions — an adviser mentions you to a potential customer, a former colleague makes an introduction, a consultant opens a door. These introductions frequently come with an expectation of compensation, but without a written agreement the terms are ambiguous. Who qualifies as a referrer? What happens if two people introduce the same prospect? Does the fee apply to renewals? What if the customer cancels?
A referral fee agreement resolves these questions before they become disputes. It also protects against a more serious risk: paying transaction-based compensation for introductions that cross into regulated territory. Securities referrals, real estate introductions, insurance leads, and healthcare referrals each have their own regulatory regimes, and a generic “finder’s fee” arrangement can create broker-dealer, licensing, or anti-kickback problems. This template includes an express regulatory stop-check to flag those situations before they start.
Key Provisions Explained
Qualified Referral Registration
Not every introduction earns a fee. A referral must be submitted through the registration process with documented evidence of a substantive introduction, must not be a pre-existing customer or excluded account, and must be accepted by the principal within a defined window. This prevents disputes over stale leads, passive mentions, and introductions to prospects the company was already pursuing. For duplicate submissions, the first accepted, substantive introduction controls.
Net Collected Revenue Fee Calculation
The fee is calculated on cash actually received by the principal, not on contract value or invoiced amounts. The agreement defines “Net Collected Revenue” by excluding taxes, refunds, chargebacks, bad debt, pass-through costs, and discounts. Fees are earned only when the principal receives nonrefundable cash — so if a customer pays and later gets a refund, the corresponding fee is clawed back. This protects the principal from paying fees on revenue it never keeps.
Scope-of-Authority Limitations
The agreement is explicit about what the referrer cannot do: no negotiating terms, no quoting prices, no collecting funds, no making product warranties, no signing contracts, and no binding the principal in any way. This is not just contractual housekeeping — it is essential to maintaining the referrer’s status as an independent introducer rather than a sales agent or broker. The broader the referrer’s authority, the greater the risk of implied agency, employment claims, or regulatory classification as a broker.
Protection Period and Tail
Each accepted referral receives a defined protection period — a window during which the referrer earns fees if a contract is signed. If no deal closes within the window, the referral lapses. After termination, the tail provision allows the referrer to continue earning on referrals accepted before termination, provided the customer contract is executed within the remaining protection period. The tail does not apply if the agreement was terminated for the referrer’s fraud or unlawful conduct.
Audit Rights and Dispute Mechanics
The referrer has the right to engage an independent accountant to verify fee calculations once per year. If the audit reveals an underpayment exceeding a threshold (typically 5%), the principal reimburses the audit costs. Fee statements must be disputed within a defined window (typically 60 days), after which undisputed amounts are deemed accepted. This creates a balanced system: the referrer can verify the math, but cannot hold disputes open indefinitely.
Emerging Provisions (2025–2026)
Regulatory Stop-Check for Broker-Dealer and Licensing Risk
The SEC’s activity-based framework for broker-dealer registration looks at whether someone solicits securities transactions, negotiates terms, handles customer funds, or receives transaction-based compensation tied to securities outcomes. A “finder’s fee” for introducing an investor to a startup can trigger registration requirements even if the finder does nothing beyond an introduction. This template requires counsel to classify the referred transaction and confirm that the arrangement does not require securities, real estate, insurance, lending, healthcare, or other specialized licensing before any referral activity begins.
Anti-Bribery and Sanctions Compliance Module
Referral relationships with international reach or government-adjacent prospects require express FCPA, UK Bribery Act, and sanctions compliance obligations. The template includes prohibitions on undisclosed incentives to prospect employees, requirements to maintain compliance records, and immediate termination rights for corruption or sanctions violations. These provisions are increasingly expected in enterprise referral programs, particularly in industries with government sales exposure.
FTC Business Opportunity Rule Awareness
When a referral arrangement includes required payments, new-business solicitation, and specified seller representations or assistance, it may trigger the FTC’s Business Opportunity Rule or state franchise/business-opportunity disclosure requirements. The template flags this as a gate issue — not every referral arrangement is a business opportunity, but the classification depends on economic substance rather than contract labels. Counsel should review the structure before launch.
How to Use This Template
1. Classify the referral activity. Before anything else, determine whether the referred transactions involve securities, real estate, insurance, healthcare, government procurement, or other regulated introductions. If they do, this template alone is not sufficient — specialist counsel must review the arrangement and confirm licensing requirements.
2. Complete Exhibit A. Define the covered offerings, territory, fee rate, renewal treatment, excluded accounts, and any competitive restrictions. Be specific — vague product descriptions lead to disputes about which deals qualify for fees.
3. Set up the registration process. Exhibit B provides the referral registration form. Implement a system for tracking submissions, recording acceptance/rejection, and managing protection periods. A CRM integration works well for companies with volume.
4. Run the economics. Test the fee structure against realistic scenarios: a deal that closes and then partially refunds, a renewal that upsells, a prospect submitted by two referrers, and a deal that closes after termination during the tail period.
5. Review with counsel. Have your attorney review the independent-contractor classification, tax withholding obligations, and any state-specific commission or sales-representative statutes that may apply.
Related Forms
This template is provided by Montague Law for informational and educational purposes. It does not constitute legal advice and does not create an attorney-client relationship. Referral fee arrangements involve broker-dealer, franchise, anti-bribery, employment-classification, and state commission-law considerations that vary by jurisdiction and transaction type. Consult qualified legal counsel before using this template. Montague Law is a Florida-based law firm focused on corporate, M&A, venture capital, and technology transactions.