Season 5 Proves Daniel was the instigator all along. (Massive Spoilers!)
Terry Silver was content to grow his dojo and leave Daniel alone. You see, Cobra Kai is a business endeavor not to be in direct competition with Miyagi-Do, which is more like a hobby dojo. Had Daniel just went back to running his dealership, which does not compete with Terry, then he would have been left alone. But no, he had to go instigate a fight with Mike Barnes, jumping to conclusions as always, when Mike was a good family man minding his own business. He didn't even bother Daniel after his failed business deal with Cobra Kai. He probably knew Daniel would never forgive him anyway and would start a fight. Because Daniel can't leave well enough alone, as Johnny soon learned, he destroys the lives of those around him. Imagine the blood, sweat, and tears, Barnes' father-in-law put into building that furniture store.
Terry kept urging Daniel and his goons, just to leave him alone, but Daniel had to keep pushing it and people got hurt. Terry even did Daniel a favor by putting Kreese behind bars. Kreese was the one who really hated Daniel. Terry was always rather indifferent about Daniel.