Merits are a non-transferable guild currency used to buy items in the Guild Store. Everyone who participates in a Brawl will receive Merits when the Brawl ends.
So there are now two types of Brawl rewards: guilds themselves win Crowns, and the individuals within the guild win Merits. As Brawling is a team sport, every participant in a given guild who submits at least 75% of their battles will receive the same amount of merits, regardless of win/loss/draw record. However, these amounts will differ from guild to guild.
The Brawl Rewards pop up provides an estimate of how many Merits you can expect to receive under ideal conditions:
Full Merits will be awarded to guild members who submit teams for at least 75% of their Fray battles. If you submit less than 75% of your battles (i.e. more than 25% are flees), then the amount of Merits you receive will be reduced proportionally.
This chart shows how many Merits you would receive under different circumstances:
Example: Your guild won 30 Crowns in a 2 Star Brawl and has a level 3 Store, then the total Merits per Guild member would receive 1313 Merits. (30 x 500 x 1.4) / 16 = 1312.5 (rounded to the nearest whole number).
You will not get penalized if your opponent flees and you automatically get a win. That counts as a submitted team for your Merit Reward. Also, if you don't have any battles because no other guilds filled your Fray, you still get full Merits as a reward for defending an empty Fray.
Merits can be found in approximately 10% of reward chests across all leagues earned for Ranked Battle participation.
The number of Merits received from a chest is randomly determined in a similar manner to how the DEC chest rewards are calculated. As always, higher league chests will contain far more Merits, on average, than lower league chests.
The Merit Bonus from the guild store building also applies to Merits earned from the reward chests - so make sure to upgrade your stores! For example, a level 3 store will result in 40% more merits that are found in reward chests!