So I showed this thread to my friend. He said he found this unusual because he always thought the instructor was a nice guy, but he never had to deal with the financial. He also doesn't know about the challenge matches but besides that is basically sounds like the school he went to. So if I can get a confirmation on the open challenges I will move forward.
@Grey Owl; No, open challenges is an open invitation to have other schools test themselves against their style. As it was told to me, when you first open up your school you have a period of time where your "incense were burning". If a person came in and accepted the challenge you you took the challenge. Even if you lost it didn't mean you had to close your school. The idea was to prove you had the skill to be able to teach. I only had one challenge during this time and I don't think they knew the tradition of it.
So what's the story on the peacock feather tradition?
From what I have been told and understand, they take open challenges. The main instructor is charismatic and likeable; however, I question his business practices and the effectiveness of his training. $150/mo on a one year contract, then roping students into a $200/mo 3 year contract otherwise there is no sparring or weapons is ridiculous. Add in $60 belt testing fees every 2-3 months to top it off. He has also explicitly told me he does not negotiate on contracts.
I can't help but think he's self-serving/money hungry when it comes to the financial side.