Templates Revenue sharing agreement template

Revenue sharing agreement template

Capped Revenue Sharing Agreement

This Revenue Sharing Agreement (this “Agreement”) is made and entered into as of Agreement date, by and between Company (Name), a Company jurisdiction corporation, at Company (Address (one line)) (the “Company”), and Revenue Share Recipient (Name), a Revenue Share Recipient jurisdiction corporation with its principal address at Revenue Share Recipient (Address (one line)) (“Revenue Recipient” or “Revenue Share Recipient”), individually a “Party” and collectively they are “Parties” to this Agreement.

WHEREAS, the Company has entered that certain Intellectual Property Purchase Agreement for the Sale and Purchase of certain from Revenue Recipient (the “Purchase Agreement”); and

WHEREAS, as part of the Purchase Agreement’s consideration, the Company agreed to enter a Revenue Sharing Agreement (“Revenue Agreement”) with Revenue Recipient, whereby the Company will pay Revenue Recipient up to Maximum payout amount from the Adjusted Gross Revenue generated by the Company on terms and conditions more particularly set forth herein; and

WHEREAS, the Company has been authorized by its Board of Directors to enter a Revenue Agreement with Revenue Recipient on the terms and conditions set forth herein below.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this Agreement, and to consummate the terms of the Purchase Agreement, which the Parties hereby acknowledge this Agreement to be an integral part thereof, it is hereby agreed as follows:

Definitions.

In this Agreement the following words and phrases shall have the following meanings unless the context requires otherwise:

“Agreement” means this Agreement, and all the exhibits, schedules and other documents attached to or referred to in this Agreement, and all amendments and supplements, if any, to this Agreement.

“Adjusted Gross Revenue” means for this Agreement all revenue accounted to the Company from the Defined Revenue Sources, as defined in Section 1.1.6. below, less Cost of Goods Sold, as defined herein in Section 1.1.5.

“Adjusted Gross Revenue Sharing Percentage” shall mean an amount equal to Revenue share percentage% of the Adjusted Gross Revenue.

“Business Day” shall mean a day other than a day, which is a Saturday, Sunday, or public or bank holiday in Local city or state.

“Cost of Goods Sold” (COGS) is defined herein as the direct costs attributable to the production of the goods sold by each Defined Revenue Source company. This amount includes the cost of the materials used in creating the good and excludes direct labor costs used to produce the good. In addition, “COGS” will include the direct costs associated with commission from sales representatives, sales agents and sales partnerships, if applicable.

“Defined Revenue Sources” means all revenue generated, earned, or received by the Company and its subsidiaries from the commercialization, licensing, sale, leasing, subscription, or other exploitation of the Purchased Assets (as defined in the Purchase Agreement), including without limitation revenues derived from products, services, software, intellectual property, upgrades, renewals, maintenance fees, and related support services, whether generated directly or indirectly, and whether recognized on a cash or accrual basis, but excluding revenues expressly excluded under this Agreement.

Revenue Sharing.

During the Term of this Agreement, the Company shall pay to Revenue Recipient, the Adjusted Gross Revenue Sharing Percentage, in cash or by wire transfer as directed by Revenue Recipient, calculated based on the Adjusted Gross Revenue accounted by the Company and its subsidiaries during each calendar quarter (Define quarters if desired) commencing with the end of the first calendar quarter after the date of this Agreement.

All payments of the Adjusted Gross Revenue Sharing Percentage shall be paid within Payment deadline duration of the last day of the calendar quarter during which revenues are accounted, time being of the essence of this provision. At the time of payment, the Company shall also deliver Revenue Recipient an accurate and complete written statement setting forth the Company’s calculations of the Adjusted Gross Revenue Sharing Percentage, including the basis of the gross revenues from the Defined Revenue Sources, the Cost of Goods Sold and the Adjusted Gross Revenues during the quarter, certified as to accuracy by an appropriate representative of the Company.

Term.

This Agreement shall continue to be in force until the earliest to occur of:

the date on which Revenue Recipient has received aggregate payments of the Adjusted Gross Revenue Sharing Percentage in an amount totaling Maximum payout amount, or

the date on which Revenue Recipient receives payment resulting from a sale as provided in Section 4. below, or

the date on which the Parties, by mutual written consent, agree to terminate this Agreement.

Payment on Sale of Purchased Assets.

In the event the Company (or any affiliate or subsidiary of the Company which acquires the Purchased Assets under the terms of the Purchase Agreement) sells or otherwise transfers:

any of the “Purchased Assets” (as that term is defined in the terms of the Purchase Agreement), or

all or substantially all of its operating assets to a third party for valuable consideration,

and the aggregate payments of the Adjusted Gross Revenue Sharing Percentage paid by Company to Revenue Recipient at the time of such sale or transfer total less than Maximum payout amount, then the Company agrees to pay Revenue Recipient the difference between the total, aggregate amount of all Adjusted Gross Revenue Sharing Percentage payments made by the Company at such time and Maximum payout amount. Such amount shall be payable by the Company to Revenue Recipient in cash or wired funds (as directed by Revenue Recipient) within Payment deadline duration of the last day of the calendar quarter during which the sale or transfer occurs, time being of the essence of this provision.

Waiver.

The waiver of the breach of any provision of this Agreement will not operate or be construed as a waiver of any subsequent breach of the same or other provision hereof.

Notices.

All notices and other communications under this Agreement will be in writing and will be given by personal or courier delivery, facsimile, or first class mail, certified or registered with return receipt requested, and will be deemed to have been duly given upon receipt if personally delivered or delivered by courier, on the date of transmission if transmitted by facsimile, or Mail notice duration after mailing if mailed, to the addresses of the Company and Revenue Recipient contained in the records of the Company at the time of such notice.

To Company (Name):
Address: Company (Address (multi-line))
Tel: Company phone number
Email: Company email

To Revenue Share Recipient (Name):
Address: Revenue Share Recipient (Address (multi-line))
Tel: Revenue Share Recipient phone number
Email: Company email

Headings.

The section headings used in this Agreement are intended for convenience of reference and will not by themselves determine the construction or interpretation of any provision of this Agreement.

Governing Law.

This Agreement will be governed by and construed in accordance with the laws of Governing jurisdiction law, excluding those laws that direct the application of the laws of another jurisdiction.

Counterparts and Facsimile Signatures.

This Agreement may be executed in two or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. This Agreement may be executed by facsimile signature (including signatures in fynk or similar format).

Enforcement.

If any portion of this Agreement is determined to be invalid or unenforceable, such portion will be adjusted, rather than voided, to achieve the intent of the parties to the extent possible, and the remainder will be enforced to the maximum extent possible. In the event the parties engage in litigation relating to or arising out of this Agreement or the performance thereof, the parties agree that the Court shall be asked to determine which party is the prevailing party to the proceeding or proceedings, and the non-prevailing party or parties shall, jointly and severally, be liable to the prevailing party in the amount of all reasonable attorney’s fees, court costs, and all other expenses, incurred by the prevailing party to the proceeding in addition to any other relief to which the prevailing party may be entitled.

IN WITNESS WHEREOF, the Parties hereto have executed this Revenue Sharing Agreement as of the date set forth in the preamble hereto.

Pending

Disclaimer: The original creator, the author of this template, and fynk GmbH are not responsible for any damages or liabilities that may result from using this template. This template should not be considered a substitute for legal advice, and consulting with a legal professional is recommended before use. fynk GmbH, the original creator, and the author do not provide legal advice and will not be held accountable for any legal consequences arising from its use.

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Learn how to structure a revenue sharing agreement

Understand what a revenue sharing agreement should include, how payments are calculated, and how to set termination and enforcement provisions.

This capped revenue sharing agreement is guaranteed a share of adjusted gross revenues, but only up to a capped amount, ensuring the company does not face indefinite obligations. It also includes a safeguard where, if the company sells the purchased assets before the cap is reached, the recipient receives a final settlement to make up the difference. This structure makes it especially useful in transactions tied to intellectual property or asset acquisitions, where both parties want aligned incentives but defined limits on payouts.

A revenue sharing agreement is a contract that explains how income from a business activity will be split between two or more parties. Instead of leaving payments vague or based on trust, it creates a written framework that clearly sets out who gets paid, how much, and when.

Think of it as a roadmap for money flow. One side is usually the revenue-generating company, for example, a tech firm selling software, an entertainment business distributing content, or a startup commercializing an invention. The other side is the revenue share recipient, often an investor, a licensor, or a partner who contributed intellectual property, services, or other assets.

These agreements are flexible and show up in all kinds of industries. You’ll find them in:

Technology and IP licensing, where a company pays back a partner based on product sales.
Entertainment and media, where creators, producers, and distributors share earnings.
Joint ventures, where two businesses pool resources and split the income fairly.
Alternative financing, where investors get a revenue cut instead of equity.

If you’ve ever checked out a sample revenue sharing agreement, you’ll notice they all serve the same purpose: to prevent disputes and give both sides confidence that the money will be handled fairly.

A good revenue sharing agreement takes the guesswork out of money. It makes sure both sides understand how revenue will be calculated and how it will be divided. Here are the core parts you’ll usually see:

Revenue definitions and calculations

The first step is agreeing on what counts as revenue. Most contracts use Adjusted Gross Revenue, which means gross income minus the cost of goods sold (COGS). COGS usually covers direct costs like materials, commissions, or sales expenses. By setting this out clearly, you avoid arguments later about what should or shouldn’t be deducted.

The agreement will define the exact percentage that gets shared. For example, three percent of adjusted gross revenue, capped at one million dollars. Adding a cap gives the paying company certainty about the maximum obligation, while the recipient knows they’ll get paid until that cap is reached.

Payment timing and reporting obligations

Most agreements set quarterly payments, but some prefer monthly or annual schedules. Along with the payment, the company usually has to provide a report showing gross revenue, deductions, and the final adjusted revenue. These reports should be signed off by an authorized representative.

Provisions for asset sales or transfers

If the company sells its assets before the payout cap is reached, the agreement can require a lump sum payment to the revenue share recipient. This ensures they still receive what they’re owed, even if the business changes hands.

Standard legal clauses

To keep the contract enforceable, you’ll also find a few boilerplate clauses, such as:

Waiver: one missed enforcement doesn’t cancel the whole agreement
Notices: how official communication must be delivered
Governing law: which state or country’s laws apply
Enforcement: the winning party in a dispute can recover legal costs

Together, these clauses give the agreement clarity, structure, and legal strength.

It’s tempting to think a handshake is enough, especially if you’re working with someone you already know. But once money starts coming in, trust alone doesn’t cut it. People remember things differently, expectations shift, and what started out simple can quickly get messy. A revenue sharing agreement keeps that from happening by putting everything in writing.

For the company generating the revenue, it offers flexibility. Instead of paying a big lump sum or giving away equity, you can share a fair slice of the revenue as it comes in. That keeps your cash flow steady while still rewarding your partner.

For the revenue share recipient, it offers security. Clear payment terms , reporting obligations, and sometimes even audit rights mean you can see exactly how the revenue was calculated and confirm you’re getting your fair share.

Most importantly, it builds trust. When both sides know how the money is split and when payments will arrive, the relationship feels balanced. You don’t waste time arguing about numbers, you can focus on growing the business instead.

💡 Good to Know

Revenue sharing is not the same as profit sharing: whereas profit sharing divides what’s left after expenses, a revenue sharing agreement distributes income before deducting costs (aside from agreed adjustments). That makes transparent definitions of “revenue” versus deductible items absolutely crucial.

Revenue sharing agreements are useful in any situation where two parties need to split income fairly without tying themselves to equity or one-off payments. Here are the most common scenarios:

Intellectual property sales or licensing

When a company buys or licenses technology, patents, or creative assets, the seller may keep earning through a share of the buyer’s revenue. This way, the seller benefits as the product grows.

Joint ventures and collaborations

Two businesses working together on a project often agree to split the revenue instead of guessing profits in advance. This keeps both sides motivated to make the project successful.

Creative and media projects

In entertainment, publishing, or music, it’s normal for revenue to be divided among creators, producers, and distributors. Everyone involved gets a piece when the project makes money.

Alternative financing

Some investors prefer revenue-based returns instead of equity. With this model, they receive a percentage of ongoing revenue until they’ve been paid back up to an agreed cap. It gives them steady returns while limiting their risk.

No two partnerships look exactly the same, which is why a revenue sharing agreement should be tailored to your situation. The free template gives you a strong foundation, but you’ll want to adjust it so it matches your industry, revenue model, and partner expectations.

Adjusting percentages and payment schedules

Some deals use a flat percentage, while others include a sliding scale or a cap. You also need to decide whether payments should be monthly, quarterly, or annually. The right choice depends on how predictable your revenue is.

Industry-specific considerations

Technology and IP licensing: Be specific about how software sales, subscriptions, or royalties are calculated.
Entertainment and media: Include detailed reporting requirements so income from ticket sales, streaming, or syndication is transparent.
Consulting or product-based deals: Define what costs reduce revenue, such as commissions or production expenses, to avoid confusion later.

Adding protections for contributors or investors

If the recipient is taking on more risk, you may want to include clauses that give them priority payments, audit rights, or stronger enforcement terms. This helps them feel confident their share is protected.

Customizing the template ensures the agreement works for your industry, keeps your cash flow realistic, and minimizes the chance of disputes.

🧠 Did you Know?

In cross-entity or cross-border revenue sharing arrangements, one of the greatest hidden risks is transfer pricing and tax compliance. Ambiguous contract terms or inconsistent methodologies for attributing revenue can attract scrutiny from tax authorities in multiple jurisdictions.

A revenue sharing agreement does more than split income. It creates clarity, prevents disputes, and helps partnerships run smoothly. Starting with a free revenue sharing agreement template saves you time and ensures you don’t miss the clauses that protect both sides.

But drafting the contract is just the first step. Managing it well is what keeps everything on track. That’s where fynk makes the difference.

Dynamic fields let you auto-fill details like revenue percentages, payment dates, and party names so nothing gets missed.
Approval workflows make sure finance or legal teams can review revenue statements before payments go out.
Notifications and reminders help you stay on top of deadlines so no payment or report slips through the cracks.

Reminders in fynk

With fynk, you can create, track, and enforce your agreements in one secure place.

Next step: Use the customizable revenue sharing agreement template, adapt it to your business, and manage it confidently with fynk.

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Find out how fynk can help you close deals faster and simplify your eSigning process – request a demo to see it in action.

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FAQs

What is the difference between a revenue sharing agreement and a profit sharing agreement?: A revenue sharing agreement divides income before expenses are deducted (after certain agreed adjustments, like COGS), while a profit sharing agreement divides what remains after all expenses are taken out. Revenue sharing is often preferred when expenses are hard to track or could be manipulated.
Can revenue sharing agreements be used instead of equity?: Yes. Some startups and investors use revenue sharing as an alternative to equity financing. It allows the investor to get paid back through a portion of revenue until a cap is reached, without giving up ownership in the company.
How detailed should revenue reporting be?: Reports should include the gross revenue, any agreed deductions (like COGS), and the adjusted gross revenue on which payments are based. To prevent disputes, many agreements also allow the recipient to request audits of the company’s financial records.
What happens if revenue drops or the business makes a loss?: Since revenue sharing is based on actual revenue, payments are tied to what is earned, not to profits. If revenue falls, the payments will be lower, but they are still due as long as income is generated.
Can revenue sharing agreements apply to more than two parties?: Yes. While many agreements are between two companies, they can be structured to include multiple recipients or contributors. The key is to clearly define each party’s percentage and reporting rights.

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