<PAGE>
 
                                 Exhibit 10.5

            Consulting and services agreement dated August 1, 1995
                     between the Company and John P. Hayes.
<PAGE>
 
                             CONSULTING AGREEMENT

     THIS CONSULTING AGREEMENT is made by and between THE DWYER GROUP, INC., a 
Delaware corporation having a principal business address of 1010-1020 North 
University Parks Drive, Waco, TX 76707 ("Company") and JOHN P. HAYES, 
individually, having a residence address of 6612 Dupper Court, Dallas, TX 75252 
("Consultant").

     WHEREAS, the Company is a holding company for six (6) service concept 
franchise companies and affiliated with other franchise companies and certain 
other related business interests to whom the Company provides legal, accounting 
and other administrative services (the "Business").

     WHEREAS, it is the desire of the Company to engage the services of the 
Consultant to perform consulting services for the Company regarding public 
relations, marketing and special projects assigned by the Chief Executive 
Officer of the Company or the operation of the Business, as an independent 
contractor and not as an employee.

     WHEREAS, it is the desire of the Consultant to consult with the officers, 
the Board of Directors and the administrative staff of the Company, and to 
undertake, for the Company, consultation as to the direction of certain public 
relations and marketing functions in the management of the Business and such 
other special projects as may be assigned by the Company's Chief Executive 
Officer.

     WHEREAS, in consideration of the mutual promises contained in this 
Consulting Agreement, the parties agree as follows:

                                     TERM

     1.1. The respective duties and obligations of the parties to this
Consulting Agreement shall be for a period of twelve (12) months, commencing on
August 1, 1995.

     1.2  This Consulting Agreement may be terminated by either party giving 
ninety (90) days' written notice  to the other party at the respective party's 
address stated above or such other address as the party may designate, in 
writing, to the other party.

     1.3  If, after the initial term of the Agreement has expired, the parties 
continue to do business together as if this Agreement were still in effect, the 
parties agree that this practice constitutes a renewal of the Agreement for an 
additional term of twelve (12) months until one of the parties notifies the 
other party, in writing, of its wish to terminate this Agreement.


CONSULTING AGREEMENT -- PAGE 1
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<PAGE>
 
                                 CONSULTATIONS

     2.1  The Consultant shall make himself available to consult with the Board 
of Directors, the officers, including the Chief Executive Officer and the 
department heads of the administrative staff at reasonable times concerning 
matters pertaining to public relations and marketing of the Company and the 
Business and to those future matters which Consultant and the Chief Executive 
Officer agree, in writing, are responsibilities of the Consultant.

     2.2  The Consultant may represent, perform services for and by employed by 
such additional clients, persons or companies as the Consultant, in his sole 
discretion, sees fit.

                                 COMPENSATION

     3.1  For services rendered under this Consulting Agreement, the Consultant 
shall receive a base fee of $7,500 per month. If the additional matters increase
the demands on Consultant's time (instead of merely replacing projects which 
have been completed), the base fee may be adjusted by the parties, which 
adjustment must be agreed to in advance, in writing, by both parties.

     3.2  Consultant shall be reimbursed for expenses, other than ordinary 
office overhead, incurred and directly attributable to services rendered under 
this Consulting Agreement.

     3.3  A statement shall be submitted to the Company no later than the tenth 
(10th) day of each month, detailing, by company, the services rendered during 
the previous month. The Consultant shall be paid on or before the twentieth 
(20th) day of the same month for the previous month's services.

     3.4  Consultant is hereby granted an option to acquire 10,000 non-qualified
shares of common stock of the Corporation valued as of the close of business on 
August 1, 1995 in accordance with the Stock Option Agreement attached hereto as 
Exhibit "A". If this Consulting Agreement is renewed, Consultant shall be 
granted an additional option upon each annual renewal.

                               LIMITED LIABILITY

     4.1  The Consultant shall not be liable to the Company, or to anyone who 
may claim any right due to his relationship with the Company, for any acts or 
omissions on the part of the Consultant or the agents or employees of Consultant
in the performance of the Consultant services under this Consulting Agreement, 
except when such acts or omissions are due to willful misconduct or culpable 
negligence. The Company shall hold the Consultant harmless from any obligations,
costs, claims, judgments, attorney's fees or attachments arising from our 
growing out of the services rendered to the Company pursuant to the terms of 
this Consulting Agreement

CONSULTING AGREEMENT -- PAGE 2
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<PAGE>
 
or in any way connected with the rendering of such services, except when the 
same shall arise due to the willful misconduct or culpable negligence of the 
Consultant and the Consultant is adjudged to be guilty of willful misconduct and
culpable negligence by a court of competent jurisdiction.

                                APPLICABLE LAW

     5.1  This Consulting Agreement shall be construed under and in accordance 
with the laws of the State of Texas.  All obligations of the parties created 
under this Consulting Agreement are performable in Waco, McLennan County, Texas.

                                 PARTIES BOUND

     6.1  This Consulting Agreement shall be binding on and inure to the benefit
of the parties to it and their respective heirs, executors, administrators, 
legal representatives, successors and assigns when permitted by this Consulting 
Agreement.

                              LEGAL CONSTRUCTION

     7.1  In the event that any one or more of the provisions contained in this 
Consulting Agreement shall for any reason be held to be invalid, illegal, or 
unenforceable in any respect, such invalidity, illegality or unenforceability 
shall not affect any other provisions and this Consulting Agreement shall be 
construed as if such invalid, illegal or unenforceable provision and never been 
contained in it.

                                   REMEDIES

     8.1  If any action at law or in equity is necessary to enforce or interpret
the terms of this Consulting Agreement, the prevailing party shall be entitled 
to reasonable attorney's fees, costs and necessary disbursements in addition 
to any other relief to which the party may be entitled.

                          PRIOR AGREEMENTS SUPERSEDED

     9.1  This Consulting Agreement constitutes the sole and only agreement of 
the parties to it and supersedes any prior understandings or written or oral 
agreements between the parties respecting this subject matter.

                                EFFECTIVE DATE

     10.1 This Consulting Agreement is effective as of the 1st day of August, 
1995.



CONSULTING AGREEMENT -- PAGE 3
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<PAGE>
 
                                  CONSULTANT:


                                  /s/ John P. Hayes
                                  -----------------------------------
                                  John P. Hayes, individually


                                  COMPANY:

                                  THE DWYER GROUP, INC.

                                  BY:  /s/ Robert E. Tunmire
                                     --------------------------------
                                       Robert E. Tunmire, President

ATTEST:


---------------------------
Dina Dwyer-Owens, Secretary

CONSULTING AGREEMENT -- PAGE 4
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