2004 to The Children's Place. The Walt Disney Company decided to keep the stores in Europe, along with the flagship store in Manhattan, which was converted into a World of Disney store run by Walt Disney Parks and Resorts in 2004, while The Children's Place got the Chicago flagship location. On June 2, 2005, the Disney's Soda Fountain and Studio Store opened up in the El Capitan Building on the ground floor replacing a Disney Store. Disney sold the chain for the cost of inventory to the Children's Place's subsidiary Hoop Holdings and signed a 15-year licensing agreement. Under the licensing agreement, a "royalty holiday" period existed until October 2006 to allow revamping of the stores. The royalty thereafter was 5% of store sales while online sales give Disney a 9% to 10% royalty. Hoop Holdings had to write off the cost ($48 million) of the equipment and property received in the purchase. On the weekend of March 24, 2005, Hoop Holdings opened its first Disney Store Outlet location. The Children's Place intended to reinvigorate the Disney Store brand in the United States by expanding the number of stores, reducing initial selling prices. Previously, Disney Stores have been well known for inflated initial prices, which would be marked down substantially after just a few weeks. Also, The Children's Place opened Disney outlet stores, which have lower operating costs and typically have a high profit margin even though they have reduced prices versus mall stores. However, Disney's strict licensing agreement, which included the burden of being required to invest significantly in store remodels, contributed to the eventual decision by The Children's Place to exit the business. Hoops saw progress with its strategy as open stores in 2006 for 11 month saw 15% increase in sales assisted by a better Disney box office results, and the success of the Disney Channel's hit made-for-TV movie High School Musical. A store website would be up and running in April 2007. Hoops Retail Stores, DBA Disney Store and a subsidiary of The Children's Place, commenced a 13-year lease of the Royal Laundry Complex in 2006. On June 8, 2007, Disney Consumer Products and The Children's Place settled a licensing agreement dispute, in which Disney indicated 130 unfixed breaches. The Children's Place agreed to have a new prototype store design approved by Disney by the end of June with the prototype to rolled out to 234