The License Challenge is a series of routes with different rule twists to them. You fight a string of enemies trying to win while also satisfying some outside requirement. These first five are very easy, though the last couple may mildly test someone new to the game.
Note that if you lose at any point during a license test, either by getting KOed or failing to meet the license requirements, you fail the challenge and must try again from the beginning. Some license tests have filler "Win this match!" bouts which are normal rules fights; treat these as you would in arcade mode.
01. Striking Test 1
Fight order: Akira, Pai, Lion, Sarah, Kage
"Connect with 5 or more strikes and win!"
Akira, Lion, and Kage.
"Win the match!"
Pai and Sarah.
You'll get this easily since you'll have to hit opponents to win. The only way this is missed is if you're incredibly throw happy or were to somehow get a ring out (can't recall if that's even possible on the stages used). The AI is pretty easy here, so I don't think tips are necessary.
02. Guarding Test 1
Fight order: Pai, Jeffry, Jean, Lei Fei, Lau
"Block 5 or more strikes and win!"
Pai.
"Block 6 or more strikes and win!"
Jean.
"Block 7 or more strikes and win!"
Lau.
"Win the match!"
Jeffry and Lei Fei.
Still very easy. Let the opponent attack you early and hold block. Once the counter hits the required number of blocks, fight back and win.
03. Defensive Move Test 1
Fight order: Eileen, Brad, Pai, Lion, Jean
"Win without letting your opponent evade 7 strikes!"
Eileen, Pai, and Jean.
"Win the match!"
Brad and Lion.
The enemy is still too simple to evade enough here if you stay agressive. These are fast opponents, but as long as you don't let up, you'll knock them out before they can do much anything.
04. Offensive Move Test 1
Fight order: Kage, Shun, Jeffry, Goh, Brad
"Use 1 or more offensive moves and win!"
Kage, Jeffry, Brad.
"Win the match!"
Shun and Goh.
Offensive moves are when you tap up or down then quickly press all three buttons (guard, punch, and kick). This causes your character to evade into a more offensive position, swiftly sidestepping the current line of focus. You just need to do one here, so get it out the way at the start of the first match and do your usual to win out.
05. Health Bar Test 1
Fight order: Goh, Kage, Akira
"Defeat an opponent with more health!"
Goh, Kage, Akira.
Even though we finally drop from five to three fights on this challenge, this still may be tough for a new player. The opponents here are decent and have just a bit more health than normal. The AI still isn't much though, so anyone should be able to ram PPPK combos all the way to the end. I'd aim for mid-range strikes, especially against Kage since he's always low to the ground.