The Dojo

From Paper Mario Wiki

The Dojo is a location in Toad Town run by The Master, and has two other trainers, Chan and Lee. The Dojo is a place where Mario is supposed to be trained so he may hone is skills. There are 5 "degrees". The first of which, represented with the First-Degree Card, is obtained by defeating Chan. The second degree, represented with the Second-Degree Card, is obtained by defeating Lee. The Third-Degree Card, Fourth-Degree Card, and finally the Fifth Degree-Card, or Diploma, are obtained by defeating The Master, who gets progressively harder after each degree. The final battle with The Master is often considered equally hard as, if not, harder than, the final battle with Bowser.

There are no particular rewards for getting Degree-Cards. Defeating Chan, Lee, or The Master does not gain you any Star Points. Your only reward is the praise of certain characters in the game (e.g. if you talk to the Toad outside the Dojo he will be amazed that you got the Diploma and that you are very strong, etc. etc.)

The names of Chan and Lee may be based on those of Hitmonlee and Hitmonchan from the Pokémon series. Also, The Master may correspond to Hitmontop .