In The Karate Kid and reignites the rivalry between Johnny and Daniel LaRusso (Ralph Macchio). In fact, what Cobra Kai did to Daniel in The Karate Kid Part III is the reason the black and yellow karate dojo was kicked out of the San Fernando Valley.
Under sensei John Kreese (Martin Kove), Cobra Kai's heyday was in the early 1980s and Johnny was a major part of their success. Back then, karate in the Valley was the equivalent of football in West Texas and Lawrence was Cobra Kai's brightest star. Johnny was a two-time All Valley Under 18 Karate Champion and Cobra Kai flourished with Lawrence as Kreese's prized pupil. Although Cobra Kai's "strike first, strike hard, no mercy" philosophy was severe, it was also bankable. Kreese was certainly not above teaching his students to use underhanded and dishonorable tactics in competition and in everyday life, but it didn't hurt Cobra Kai's influence, and Kreese cultivated his dojo's fearsome aura. But all that changed when Daniel LaRusso beat Johnny to win the All Valley Championship in 1984; Kreese attacked Johnny and his other students after the event and was disgraced, especially when Daniel's sensei Mr. Miyagi (Noriyuki "Pat" Morita) humiliated Kreese in combat. Lawrence and the rest of the Cobra Kai quit and the dojo immediately closed, sending Kreese into a downward spiral.
The Karate Kid Part III revealed that Cobra Kai was even worse than Daniel could have imagined and they deserved their lifetime ban. Months after he lost his dojo, the destitute John Kreese turned to his former Vietnam veteran and benefactor, Terry Silver (Thomas Ian Griffith). Silver was a multimillionaire and the CEO of a corporation called DynaTox, and he was even worse than his old buddy John. Terry decided to restart Cobra Kai with an even more ambitious plan to take over the Valley. But at the heart of his scheme was tricking Daniel into defending his championship against Cobra Kai's new handpicked star pupil, "Karate's Bad Boy" Mike Barnes (Sean Kanan). Terry befriended Daniel and preyed on his insecurities and temper, coercing LaRusso into abandoning Miyagi and ing Cobra Kai. After Daniel learned the truth about Silver and Kreese, the Cobra Kai senseis ordered Barnes to use blatantly illegal tactics against LaRusso in the All Valley tournament. But Daniel still beat Mike Barnes, humiliating Cobra Kai once again.
In Cobra Kai season 1, Johnny faced the city council after he learned that his dojo was banned for life from entering the All Valley Tournament, thanks to Terry Silver and John Kreese. In fact, Daniel, Cobra Kai's top victim, was now a member of the city council and enforced the ban. But despite LaRusso angrily objecting to Cobra Kai being reinstated, Johnny ionately pleaded his case for his dojo. Johnny argued that his Cobra Kai was not the same as the one Kreese and Silver ran; in fact, Lawrence had never even heard of Terry Silver, which was the truth because Johnny wasn't in The Karate Kid Part III. Johnny had quit Kreese's Cobra Kai the year before and he had no part of what happened to Daniel in 1985's All Valley Tournament.
Despite Daniel's wishes, the council was moved by Johnny's defense of his dojo and the lessons he itted he had learned by teaching his students. Cobra Kai was reinstated, and they went on to win the All Valley Tournament for the first time since 1983 when Miguel Diaz (Xolo Mariduena) defeated Johnny's son and Daniel's pupil Robby Keene (Tanner Buchanan) in the finals. Of course, Cobra Kai's aggressive tactics still shined through and Johnny's students exhibited bad sportsmanship throughout the event. But Johnny was actually embarrassed by his students' behavior, and he began to reexamine what he was teaching them. Cobra Kai season 2 began with Johnny trying to move his dojo into a better (but still badass) path, but the return of John Kreese ruined the progress and redemption Johnny sought for Cobra Kai.
Cobra Kai is available to stream to Netflix.