I think it's to do with the size of the litter produced - not the size of the dog, AlexArt

A stud fee for a quality RR would be around a £1000 with quality puppies around that sort of price, and RRs often have largish litters, easily 8 - 10. My most common litter number has been 11. My gorgeous young dog just produced 9 in his first litter (with the aid of the lovely bitch)

A small breed would probably only have between 1 - 4 puppies, and the stud fee seems to be proportionally smaller.

For the OP to have expected a puppy as a stud fee does seem to me to be unreasonable for a breed that has such small litters but if that was the agreement then both parties should abide by it ....