Mr. Krabs wants to give his daughter Pearl the best birthday ever. While he works on the party, SpongeBob is assigned the task of figuring out what Pearl would like for a present. SpongeBob receives an invitation to take part in a competition on mysterious Karate Island for the chance to be crowned "King of Karate." SpongeBob and Sandy arrive at Karate Island and it turns out that it was just all a set-up to make SpongeBob buy real estate.