It's love at first sight for Fonzie when he sees a woman in a store as they pass each other on the escalator. Potsie happens to know who she is (Ashley Pfister), and Fonzie vows to find her and make her his.

Joanie and Chachi come back to Milwaukee after spending the summer in Chicago. Joanie wants to move there to be with Chachi and to continue their music career. After telling Howard and Marion her plans, which include attending Northwestern University, Howard refuses to let her go.

Now that Joanie, Lori Beth, and Richie Jr. have left the Cunningham house, Marion looks to find ways to cope and occupy her time. Meanwhile, Fonzie isn't able to run Arnold's by himself in addition to his garage and teaching duties, so he looks to sell his half of Arnold's.

In an attempt to get Ashley's young daughter, Heather, to warm up to him, Fonzie takes her to the circus. Meanwhile, K. C., Howard's niece, moves in with Howard and Marion while her parents look for a new boarding school. Marion asks Howard to consider letting her stay permanently.

Fonzie receives a good citizenship award from the Milwaukee Chamber of Commerce, but the ceremony is interrupted by a disgruntled childhood classmate of the Fonz who's been waiting 17 years for his revenge. They agree to settle their differences, but Ashley asks Fonzie to promise not to fight.

Joanie and Chachi have the opportunity to appear on a television music show but learn that their format is folk. Meanwhile, Fonzie is upset that folk music seems to be replacing rock and roll.

Fonzie pledges his love to Ashley but risks losing her when he allows an old girlfriend to spend the night at his apartment. Meanwhile, Howard teaches K. C. to drive.

Marion encourages K. C. to date, so she accepts an invitation to Arnold's Gala Costume Ball from Melvin Belvin.

Facing competition from a hardware store at a new mall, Howard says he'll have to close Cunningham Hardware.

When Heather asks Santa to patch up the rift between her mother and grandparents, Fonzie decides to make her wish come true. Meanwhile, K. C.'s parents visit for Christmas, and a rivalry between Howard and his brother reignites.

Roger's old flame from his school days shows up, and Roger cannot resist her. Fonzie attempts to prevent her from breaking his heart again.

Ashley receives an invitation to her estranged parents' wedding anniversary party. She doesn't want to go, but Fonzie insists.

Roger tries to convince Flip to stop drinking and hanging out with guys that do. Flip doesn't take his advice, and he and his friends accidentally hit Heather with their car.

Meanwhile, Fonzie auditions barbers to replace his who recently died. Also, Jenny, K. C., Bobby, and Melvin are in charge of decorations for the Winter Carnival.

Fonzie hires a convict, via a work-release program, to be a mechanic at his garage. After the convict, Jim, sees K. C. perform a song at Arnold's, she invites him to dinner. Howard stops K. C. from seeing Jim after Fonzie informs him and Marion of Jim's felonious past.

A record producer hears a demonstration tape of Joanie and Chachi and is eager to sign them. However, Chachi has an argument with Mario, a member of the band, and says they're breaking up.

During a celebration of Fonzie and Ashley's six-month anniversary of their first date, they recall the events of that evening.

It's Heather's birthday, but Fonzie (along with Potsie and Roger) has to report for the Army reserves. He promises Heather that he will be at her party, but he didn't count on Officer Kirk being the commanding officer.

Fonzie and Roger miss their flight to Minneapolis for a teacher's convention, so they agree to go with Potsie's uncle, Omar, who has a small plane he uses for crop dusting and spreading ashes. Omar jumps out when there is trouble with the engine leaving Fonzie and Roger by themselves with no parachutes.

Fonzie is the best man at the wedding of an old pal, but the bride-to-be stops the ceremony after spotting Fonzie. Meanwhile, K. C. awaits word about a part in the school musical.

Fonzie babysits Heather when Ashley leaves for a tax seminar, but his attention is drawn away by a televised heavyweight title fight leaving Heather resentful toward him. Meanwhile, Joanie and Chachi return to Milwaukee after Joanie says she's sick.

After deciding to quit the band, Joanie moves back in with Howard and Marion to enroll in a teaching program at the University of Wisconsin. Chachi tries to convince her to stay with him in Chicago after he isn't willing to go with her back to Milwaukee.

Jenny dumps a nice guy to be with a former Olympic swimmer, but K. C. learns that the swimmer doesn't feel the same way about Jenny as she feels about him. Meanwhile, Fonzie wants to have a swimming pool put in the Cunninghams' backyard.

Fonzie finds a note he wrote as a child containing a list of things to accomplish in the next twenty years. On the list is one goal he hasn't yet accomplished: climb Suicide Hill on a motorcycle. The problem is that he's already tried it and failed.

New events in Joanie's life cause Chachi to resent her for not having enough time for him. Each has their own solution: Joanie wants to break up, and Chachi wants to get married.

In an attempt to help Fonzie move on after his break-up with Ashley, Potsie, Chachi, and Roger take him on a retreat to a singles resort. However, to get him to go, they tell him they're going to a sporting camp. When they arrive at the lake, Fonzie discovers what the resort is all about and says he's going to leave. He ends up staying which puts a damper on the rest of the guys' fun.

Richie (with Lori Beth and Richie Jr.) and Ralph return from the army. Howard is able to get Richie an interview with The Milwaukee Journal, but Richie doesn't appear to be interested.

Still upset about having given up on his dream as a screenwriter and having to pretend to be happy all of the time, Richie takes out his frustrations on everyone around him - including punching Fonzie in a bar.

After being nothing more than a coatrack for Fonzie's scarf during a rumble, Chachi enters the city boxing championship tournament to earn his respect. Fonzie is elated when Chachi wins his first fight.

Roger is the new principal of the tough George S. Patton Vocational High School. He thinks he can handle the students there but is sorely mistaken.

Fonzie's long-lost brother from San Francisco, whom Fonzie didn't know existed, tracks Fonzie down in Milwaukee. Fonzie is, initially, happy to have a brother but soon comes to hate him.

Howard decides that it is necessary to build a second bathroom after he's forced to shave at the dining room table. To save money, he decides to allow Fonzie's students to build the room. Howard doesn't realize that the room will take all semester to complete, and this hurts his plan to make a killing in whisper-quiet toilets. He fires Fonzie and the students and says he'll finish the bathroom himself.

Joanie accepts an assistant teaching position at Patton High and immediately encounters trouble when a student has a crush on her.

Fonzie is accused of hitting a trouble-making student but refuses to testify at a school-board hearing. By not doing so, he runs the risk of being ruled against and getting fired.

Howard is jealous and upset when Marion's high-school boyfriend, Frederick, comes to visit. He becomes enraged when Frederick takes Joanie out on a date.

Chachi is hesitant about asking girls out for fear that he will be rejected. Fonzie tells Chachi that girls will ask him out because he has the Fonzarelli power.

Fonzie meets a beautiful woman, Nancy Haley, at his garage while listening to the radio in a beat-up 1955 Chevy. He takes the woman home, but when he goes back to return her purse, an older woman tells him that the Haleys moved out ten years ago when their daughter was killed in an automobile accident.

Howard is offered the vice-presidential position at a large hardware-store chain and considers taking it and moving to New York. Despite nothing being final and Fonzie feeling as though the Cunninghams are pushing him to leave, he decides to immediately move out of his apartment.

After realizing they're dating people that look like each other, Joanie and Chachi decide to meet in order to explore the option of getting back together.

Meanwhile, Fonzie wants to adopt an orphaned boy to whom he's been a Big Brother.

Fonzie's adoption request is reconsidered after a stern talk by Howard to the adoptions administrator.

Meanwhile, Joanie and Chachi continue to prepare for their wedding.

Marion and Joanie take a trip to Mother Kelp's to help her move. From the time they arrive, Mother Kelp does nothing but critcize Marion.

Meanwhile, Howard, Fonzie, Chachi, and Roger spend the weekend playing poker.

After having to borrow money from Marion and being hassled by Fonzie about being a bum, Chachi takes a job as a dance instructor.

Meanwhile, Howard takes away Potsie's salary after he sells power drills for $13.05 less than cost.

Joanie brings home one of her students in an attempt to help her with her drug problem. The student promises Joanie that she'll make changes in her life, but she immediately takes several pills after everyone has gone to bed.

After his single makes it onto the record charts, Chachi is invited to go on tour with the Beach Boys as one of their opening acts. However, he quits the tour after learning he has diabetes.

With the recent death of a fellow Leopard Lodge member, Howard fears that he may be ousted as Grand Poohbah for not attracting any new members other than Potsie during his five-year reign. He gets Fonzie, Chachi, and Roger to join as pledges, and they have to follow the orders of Potsie during their initiation.