In 1985, after Daniel returned from Okinawa with Mr. Miyagi, Daniel learned that the apartment complex that Mr. Miyagi works at and Daniel lives at has been sold, thus Daniel has lost his home and Miyagi has lost his job. When Daniel learns of Mr. Miyagi's dream to open up a bonsai tree store, he secretly used his college funds to open the store. Daniel and Mr. Miyagi had to struggle to keep the store afloat, including selling Mr. Miyagi's beloved truck and Daniel attempted to dig up Mr. Miyagi's true wild bonsai tree so they can sell it, an ordeal which very nearly resulted in the tree's destruction by Mike Barnes. The store was also completely vandalized and robbed by Mike and his goons, on orders from Terry Silver.
It is unclear whether or not Mike's vandalism had anything to do with the store's closing or not, though it definitely had a negative impact as Mr. Miyagi and Daniel had to buy an entirely new inventory and fix up the store again. Probably for financial reasons, the store eventually closed some time after the events of The Karate Kid Part III, likely only a few years later. In Cobra Kai, Daniel mentions that the store was a good idea but they had "some bad luck." Daniel also claimed that the Bonsai store was "a disaster" in the show's fourth season. Daniel went on to start selling cars and later opened up his own automotive group in 2002.
- The building that was used as the filming location for the tree store in The Karate Kid Part III was located at 130 East Avenue 50 in Los Angeles, California. It has since been demolished and currently is a vacant lot.