After the literary character Sherlock Holmes entered the public domain in 1981, the estate of author Arthur Conan Doyle staunchly protected the remaining copyrights for the character until 2023, on the basis of infringing works using human emotions or opinions not shown in earlier stories (i.e. respecting women, liking dogs, a warmer relationship with his partner Watson). Royalty Free-for-All was originally going to feature Sherlock Holmes as a robotic character to poke fun at these restrictions while playing by them, but it was later decided that another literary character, the murderous barber Sweeney Todd, was a better fit for a robot and could be depicted as electronic shaving equipment. This decision was also motivated by Conan Doyle's final Sherlock Holmes stories having gone into the public domain by the time the game was revealed, making the original joke outdated.

According to Dorothy's moveset showcase, the reasoning for adding her neutral special move in which she inexplicably gains an elephant's trunk and tusks, which is mentioned in the video as being something some fans were confused about the origins of, was "it's a public domain fact that elephants are cool!" It's worth noting that in 1922, an elephant character was introduced to the The Wonderful Wizard of Oz book series named Kabumpo who is now in the public domain, but it's unclear if this move is meant to be a specific reference to him.

The game's creator Colin McIsaac has stated that it was inspired by his childhood experience reading the trophy gallery in the Super Smash Bros. series and going down various Wikipedia "rabbit holes" related to games and television series he enjoyed. He also wanted to pass on that experience through more easily accessible source material rather than the games featured in the Super Smash Bros. series: