<PAGE>


                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB



(Mark One)

X    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
--   ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2002.



     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
--   EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM
                                                         -------------


COMMISSION FILE NUMBER.......................................0-15227



                              THE DWYER GROUP, INC.
        -----------------------------------------------------------------
        (EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)


<Table>
<S>                                  <C>
          Delaware                                     73-0941783
-------------------------------            ------------------------------------
(STATE OR OTHER JURISDICTION OF            (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
</Table>


                  1010 N. University Parks Dr., Waco, TX 76707
              -----------------------------------------------------
              (ADDRESS AND ZIP CODE OF PRINCIPAL EXECUTIVE OFFICES)


                                 (254) 745-2400
                ------------------------------------------------
                (ISSUER'S TELEPHONE NUMBER, INCLUDING AREA CODE)


--------------------------------------------------------------------------------
              (FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR,
                         IF CHANGED SINCE LAST REPORT)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.  Yes  X    No
                                                               ---      ---

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.


            Class                                 Outstanding at April 30, 2002
----------------------------                      -----------------------------
Common stock, $.10 par value                                6,997,931



     TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT (CHECK ONE): Yes    No  X
                                                                   ---    ---

<PAGE>

                              THE DWYER GROUP, INC.

                                      INDEX


<Table>
<Caption>
PART I  -  FINANCIAL INFORMATION                                                PAGE NO.
<S>                                                                              <C>

     Item 1.    Financial Statements

                Condensed Consolidated Balance Sheets as of
                March 31, 2002 (unaudited) and December 31, 2001 (audited)....     3

                Consolidated Statements of Income for the Three Months
                Ended March 31, 2002 and 2001 (unaudited).....................     4

                Consolidated Statements of Cash Flows for the Three Months
                Ended March 31, 2002 and 2001 (unaudited).....................     5

                Notes to Condensed Consolidated Financial Statements..........    6-7

     Item 2.    Management's Discussion and Analysis of Financial
                Condition and Results of Operations...........................    8-9


PART II  -  OTHER INFORMATION

     Item 1.    Legal Proceedings.............................................   10

     Item 2.    Changes in Securities.........................................   10

     Item 3.    Defaults Upon Senior Securities...............................   10

     Item 4.    Submission of Matters to a Vote of Security Holders...........   10

     Item 5.    Other Information.............................................   10

     Item 6.    Exhibits and Reports on Form 8-K..............................   10
</Table>


                                       2
<PAGE>
                     THE DWYER GROUP, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS


<Table>
<Caption>
                                                                           MARCH 31,       DECEMBER 31,
          ASSETS                                                             2002              2001
                                                                         ------------      ------------
                                                                          (Unaudited)       (Audited)
<S>                                                                      <C>               <C>
Current assets:
       Cash and cash equivalents                                         $    623,415      $    790,151
       Marketable securities, available-for-sale                              552,213           548,089
       Trade accounts receivable, net of allowance for doubtful
             accounts of $508,419 and $471,621, respectively                1,536,750         1,836,643
       Accounts receivable from related parties                               468,061           323,507
       Accrued interest receivable                                             49,242            48,960
       Trade notes receivable, current portion, net of allowance for
             doubtful accounts of $72,739 and $68,600, respectively         1,745,722         1,718,505
       Inventories                                                             77,645            81,702
       Prepaid expenses                                                       754,583           360,617
       Federal income tax receivable                                               --             8,017
       Notes receivable from related parties, current portion                 182,379           188,349
                                                                         ------------      ------------
          Total current assets                                              5,990,010         5,904,540

Property and equipment, net                                                 3,928,864         3,592,162
Notes and accounts receivable from related parties                             85,925            85,925
Trade notes receivable, net of allowance for doubtful notes of
             $1,104,404 and $1,107,201 respectively                         5,770,448         5,198,414
Goodwill, net                                                               5,030,081         5,030,081
Purchased franchise rights, net                                             3,242,520         3,441,492
Covenant not to compete, net                                                   26,661            31,661
Net deferred tax asset                                                        669,219           662,097
Other assets                                                                  611,929           600,090
                                                                         ------------      ------------

TOTAL ASSETS                                                             $ 25,355,657      $ 24,546,462
                                                                         ============      ============

          LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
       Accounts payable, trade                                           $  1,103,235      $    464,074
       Accrued liabilities                                                  1,473,778         1,704,637
       Deferred franchise sales revenue                                       219,596           245,085
       Litigation reserves                                                    125,131           129,500
       Federal income taxes payable                                           279,085             8,220
       Current maturities of long-term debt                                 1,124,863         1,309,711
                                                                         ------------      ------------
          Total current liabilities                                         4,325,688         3,861,227

Long-term debt, less current portion                                        3,049,418         3,257,344
Deferred franchise sales revenue                                              157,788           163,309

Stockholders' equity:
       Common stock                                                           764,519           764,519
       Additional paid-in capital                                           9,257,888         9,257,888
       Retained earnings                                                    9,081,098         8,523,364
       Accumulated other comprehensive income                                 (70,590)          (71,037)
       Treasury stock, at cost                                             (1,210,152)       (1,210,152)
                                                                         ------------      ------------
          Total stockholders' equity                                       17,822,763        17,264,582
                                                                         ------------      ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                               $ 25,355,657      $ 24,546,462
                                                                         ============      ============
</Table>


    See notes to condensed consolidated financial statements (unaudited).

                                       3
<PAGE>

                     THE DWYER GROUP, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (UNAUDITED)


<Table>
<Caption>
                                                 THREE MONTHS ENDED MARCH 31,
                                                    2002             2001
                                                 -----------      -----------
<S>                                              <C>              <C>
REVENUES:
     Royalties                                   $ 2,956,917      $ 2,760,928
     Franchise fees                                1,593,587        1,305,242
     Sales of products and services                  948,133          822,869
     Interest                                        177,600          193,575
     Other                                           190,072          130,727
                                                 -----------      -----------

        TOTAL REVENUES                             5,866,309        5,213,341

COSTS AND EXPENSES:
     General, administrative and selling           3,846,171        3,406,699
     Costs of product and service sales              776,341          703,361
     Depreciation and amortization                   316,833          357,101
     Interest                                         51,484           89,438
                                                 -----------      -----------

        TOTAL COSTS AND EXPENSES                   4,990,829        4,556,599

Income before income taxes                           875,480          656,742
Income taxes                                        (317,746)        (173,420)
                                                 -----------      -----------

NET INCOME                                       $   557,734      $   483,322
                                                 ===========      ===========


EARNINGS PER SHARE - BASIC                       $      0.08      $      0.07
                                                 ===========      ===========

EARNINGS PER SHARE - DILUTED                     $      0.08      $      0.07
                                                 ===========      ===========

WEIGHTED AVERAGE COMMON SHARES                     6,997,931        6,997,931
                                                 ===========      ===========

WEIGHTED AVERAGE COMMON SHARES AND POTENTIAL
         DILUTIVE COMMON SHARES                    7,436,346        7,015,281
                                                 ===========      ===========
</Table>


     See notes to condensed consolidated financial statements (unaudited).

                                       4

<PAGE>

                     THE DWYER GROUP, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)


<Table>
<Caption>
                                                                 THREE MONTHS ENDED MARCH 31,
                                                                 ----------------------------
                                                                    2002              2001
                                                                 -----------      -----------
<S>                                                              <C>              <C>
Operating activities:
     Net income                                                  $   557,734      $   483,322
     Adjustments to reconcile net income to
            net cash provided by operating activities:
        Depreciation and amortization                                316,833          357,101
        Change in reserve for doubtful accounts                      (91,062)          69,640
        Notes received for franchise sales                        (1,267,029)        (456,499)
    Changes in assets and liabilities:
        Accounts and interest receivable                             293,142          799,393
        Receivables / payables to related parties, net              (144,554)        (167,004)
        Inventories                                                    4,057            6,859
        Prepaid expenses                                            (393,966)        (137,874)
        Federal income tax receivable                                  8,017               --
        Change in deferred tax asset                                  (7,122)         (30,357)
        Accounts payable and accrued liabilities                     679,167           75,719
        Litigation reserves                                           (4,369)           5,514
        Deferred franchise sales revenue                             (31,010)        (182,655)
        Other                                                          6,249               --
                                                                 -----------      -----------
  Net cash (used in) provided by operating activities                (73,913)         823,159
                                                                 -----------      -----------

Investing activities:
    Collections of notes receivable                                  847,656          444,848
    Purchases of property and equipment                             (544,782)         (86,326)
    Sale of property and equipment                                    17,753               --
    Purchases of other assets                                        (24,075)         (58,609)
    Purchase of marketable securities                                 (3,904)          (4,713)
    Increase in unrealized gain on marketable securities               1,333            4,662
    Collections on notes receivable from related parties               5,970           (7,426)
                                                                 -----------      -----------
  Net cash provided by investing activities                          299,951          292,436
                                                                 -----------      -----------

Financing activities:
    Proceeds from borrowings                                         160,000               --
    Payments on borrowings                                          (552,774)        (674,231)
                                                                 -----------      -----------
  Net cash used in financing activities                             (392,774)        (674,231)
                                                                 -----------      -----------

Net (decrease) increase in cash and cash equivalents                (166,736)         441,364
Cash and cash equivalents, beginning of period                       790,151          146,852
                                                                 -----------      -----------

Cash and cash equivalents, end of period                         $   623,415      $   588,216
                                                                 ===========      ===========
</Table>


      See notes to condensed consolidated financial statements (unaudited).

                                       5
<PAGE>

                     THE DWYER GROUP, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE 1.    ORGANIZATION

The Dwyer Group, Inc. is a holding company for service-based businesses
providing specialty services internationally through franchising. The condensed
consolidated financial statements include the accounts of The Dwyer Group, Inc.
and its wholly-owned subsidiaries (the "Company") which include the following:

         o        Rainbow International Carpet Dyeing and Cleaning Co.
                  ("Rainbow") is a franchisor of carpet cleaning, dyeing, air
                  duct cleaning, and restoration services under the service mark
                  "Rainbow International"(R).

         o        Mr. Rooter Corporation ("Mr. Rooter") is a franchisor of
                  plumbing repair and drain cleaning services under the service
                  mark "Mr. Rooter"(R).

         o        Aire Serv Heating & Air Conditioning, Inc. ("Aire Serv") is a
                  franchisor of heating, ventilating and air conditioning
                  service businesses under the service mark "Aire Serv"(R).

         o        Mr. Electric Corp. ("Mr. Electric") is a franchisor of
                  electrical repair and service businesses under the service
                  mark "Mr. Electric"(R).

         o        Mr. Appliance Corp. ("Mr. Appliance") is a franchisor of major
                  household appliance service and repair businesses under the
                  service mark "Mr. Appliance"(R).

         o        Synergistic International, Inc., ("Glass Doctor"), is
                  franchisor of Glass Doctor (R), a service concept whose
                  business is the replacement of automobile, residential and
                  commercial glass.

         o        The Dwyer Group National Accounts, Inc. ("National Accounts")
                  solicits national account customers who can call a toll-free
                  phone number for their general repair and 24-hour emergency
                  service needs. The order is filled through the Company's
                  network of franchisees or qualified subcontractors.

         o        The Dwyer Group Canada, Inc. ("TDG Canada") markets and
                  services certain of the Company's franchise concepts in
                  Canada. Currently, those concepts are Mr. Rooter, Mr.
                  Electric, Rainbow and Aire Serv.

NOTE 2.    BASIS OF PRESENTATION

A.       PRINCIPLES OF CONSOLIDATION

The accompanying condensed consolidated financial statements include The Dwyer
Group, Inc. and its subsidiaries (the "Company"). All significant intercompany
balances and transactions have been eliminated.

B.       INTERIM DISCLOSURES

The information as of March 31, 2002, for the three months ended March 31, 2002
and for the three months ended March 31 2001, is unaudited, but in the opinion
of management, reflects all adjustments, which are of a normal recurring nature,
necessary for a fair presentation of financial position and results of
operations for the interim periods. The accompanying condensed consolidated
financial statements should be read in conjunction with the consolidated
financial statements and notes thereto contained in the Company's Annual Report
on Form 10-KSB for the fiscal year ended December 31, 2001, and with other
filings with the U.S. Securities and Exchange Commission.

The results of operations for the three months ended March 31, 2002 are not
necessarily indicative of the results to be expected for the fiscal year ending
December 31, 2002.


                                       6
<PAGE>

NOTE 3.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

EARNINGS PER COMMON SHARE

Basic earnings per share is computed based on the weighted average number of
shares outstanding during each of the periods. Diluted earnings per share
include the dilutive effect of unexercised stock options and warrants.

NEW ACCOUNTING POLICIES

         In June 2001, the Financial Accounting Standards Board issued FASB
Statement No. 141, Business Combinations (SFAS 141), and No. 142, Goodwill and
Other Intangible Assets (SFAS 142), effective for years beginning after December
31, 2001. Under the new rules, goodwill will no longer be amortized but will be
subject to annual impairment tests in accordance with the statements. Other
intangible assets will continue to be amortized over their useful lives.

         Effective January 1, 2002, the Company adopted the new rules on
accounting for goodwill and other intangible assets. The Company has performed
its initial assessment and determined that there is no impairment of goodwill at
March 31, 2002. As a result of the adoption of SFAS 142 and the application of
the nonamortization provisions of that statement, the Company recorded no
amortization of goodwill for the three months ended March 31, 2002. Prior to
2002, goodwill was being amortized at the rate of approximately $188,000 per
year.

         SFAS 143 requires that the fair value for an asset retirement
obligation be recognized in the period in which it is incurred, if a reasonable
estimate of fair value can be made, and that the carrying amount of the asset,
including capitalized asset retirement costs, be tested for impairment. SFAS 143
is effective for fiscal years beginning after June 15, 2002. Management does not
believe this statement will have a material effect on the Company's financial
position or results of operations.

         SFAS 144 prescribes financial accounting and reporting for the
impairment of long-lived assets and for long-lived assets to be disposed of, and
specifies when to test a long-lived asset for recoverability. Effective January
1, 2002, the Company adopted this new rule. Management has determined that this
will not have a material effect on the Company's financial position or results
of operations.



                     THIS SECTION LEFT INTENTIONALLY BLANK.

                                       7
<PAGE>


MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

Unless otherwise noted, all dollar amounts are rounded to the nearest thousand.
Percentages represent the change from the comparable amount from the previous
year. Note references refer to Notes to Condensed Consolidated Financial
Statements.

LIQUIDITY AND CAPITAL RESOURCES

The Company's working capital ratio was approximately 1.4 to 1 at March 31, 2002
as compared to 1.5 to 1 December 31, 2001. The Company had working capital of
$1,664,000 at March 31, 2002 as compared to $2,043,000 at December 31, 2001. For
the remainder of fiscal 2002, management expects to fund working capital
requirements primarily through operating cash flow. At March 31, 2002, the
Company had cash and cash equivalents of $623,000, and marketable securities of
$552,000.

In May of 2001, the Company renegotiated a $500,000 line of credit with its
bank. Management expects that the line will be renewed for another year in May
of 2002.

Cash in the amount of $74,000 was used for operating activities in the first
quarter of 2002, as compared to $823,000 provided by operating activities for
the same period in 2001. In 2002, cash was generated primarily by a net profit
of $558,000, depreciation and amortization of $317,000, a decrease in accounts
and interest receivable of $293,000 and an increase in payables and accrued
liabilities of $679,000, which was more than offset by notes received from
franchise sales of $1,267,000, a change in reserve for doubtful accounts of
$91,000, an increase in receivables from related parties of $145,000, and an
increase in prepaid expenses of $394,000. For the same period in 2001, cash was
generated primarily by a net profit of $483,000, depreciation and amortization
of $357,000, a decrease in accounts and interest receivable of $799,000 and an
increase in payables and accrued liabilities of $76,000, partially offset by
notes received from franchise sales of $457,000, a decrease in deferred
franchise sales revenue of $183,000 and an increase in prepaid expenses of
$138,000.

In the first quarter of 2002, the Company generated $300,000 in cash from
investing activities, primarily from collections of notes receivable of
$848,000, partially offset by purchases of property and equipment for $545,000
and purchases of other assets for $24,000. The cash used for the purchases of
property and equipment was primarily related to the development of the Company's
new on-site training facility. For the same period in 2001, the Company
generated $292,000 in cash for investing activities, primarily from collections
of notes receivable of $445,000, partially offset by purchases of property and
equipment for $86,000 and purchases of other assets for $59,000.

In the first quarter of 2002, the Company used $393,000 in cash for financing
activities for payments on borrowings of $553,000, partially offset by new
borrowings of $160,000. For the same period in 2001, the Company used $674,000
in cash for financing activities for payments on borrowings.

The Company is not aware of any trend or event, which would potentially
adversely affect its liquidity. In the event such a trend would develop,
management believes that the Company has sufficient funds available to satisfy
the working capital needs of the business.

RESULTS OF OPERATIONS

For the three months ended March 31, 2002, compared to the three months ended
March 31, 2001.

Total revenues for the quarter increased by $653,000 to $5,866,000 in 2002 from
$5,213,000 in 2001. This increase is due to increases in the following revenue
categories: royalties - $196,000 (7%); franchise fees - $288,000 (22%); sales of
products and services - $125,000 (15%); and other - $59,000 (45%); partially
offset by a decrease in interest of $15,000 (8%).

Royalty revenues from the Company's franchise concepts increased as follows:

<Table>
<S>                               <C>                   <C>
         Mr. Rooter               $   84,000            (7%)
         M. Electric              $   47,000           (23%)
         Glass Doctor             $   43,000           (10%)
         Mr. Appliance            $   11,000           (25%)
         Aire Serv                $    2,000            (1%)
</Table>


                                       8
<PAGE>

The above increases were partially offset by a decrease in royalties from
Rainbow - $ 28,000 (5%).

In addition to the above, royalties from the Company's Canadian and certain
other foreign operations increased by $37,000 (37%).

Overall, these royalty revenue increases, which coincide with the increased
business revenues of existing franchisees as well as an increase in the number
of franchisees producing revenue, are a direct result of the Company's emphasis
on providing strong franchise support services, and its methods and programs
created to assist franchisees in building successful businesses, along with
continued emphasis on the sale of new franchises. These strategies are very
important to the future of the Company, as royalties are the foundation for the
Company's long-term financial strength.

The increase in franchise fee revenues was due to increases from each of the
following concepts: Mr. Rooter - $237,000 (61%); Mr. Electric - $187,000 (148%);
and Mr. Appliance - $33,000 (55%). These increases were partially offset by
decreases from Glass Doctor - $19,000 (7%); Aire Serv - $33,000 (13%); Rainbow -
$64,000 (35%); and international operations - $53,000 (100%).

Sales of products and services increased by $125,000 (15%), due to additional
customers served by National Accounts.

General and administrative expenses increased by $439,000 (13%), due to
additional costs and personnel associated with the increase in overall revenues.

Due to the increase in product and service sales, costs associated with such
sales increased by $73,000 (10%).

Depreciation and amortization decreased by $40,000 (11%) due primarily to a
change in accounting rules associated with amortization of goodwill as described
in Note 3 to the financial statements.

The Company reported net income of $558,000 for the quarter ended March 31, 2002
as compared to net income of $483,000 for the same period in 2001. The Company
had a lower effective tax rate in 2001, due to utilizing available tax credits,
as compared to a higher effective tax rate in 2002, due to additional state
income taxes.

IMPACT OF INFLATION

Inflation has not had a material impact on the operations of the Company.

FOREIGN OPERATIONS

The Company operates in 17 foreign countries. Typically, foreign franchises are
sold and managed by a master licensee in that country. Royalty revenues from
master licenses are recorded as received due to the difficulty sometimes
experienced in foreign countries when attempting to transfer such funds to the
United States. The Company does not depend on foreign operations, and such
operations do not have a material impact on its cash flow. During the remainder
of 2002, the Company may sell additional master licenses, which could result in
lump sum payments from the master licensees to the Company.

FORWARD-LOOKING STATEMENTS

The Company cautions readers that various factors could cause the actual results
of the Company to differ materially from those indicated by forward-looking
statements made from time-to-time in news releases, reports, proxy statements,
registration statements and other written communications (including the
preceding sections of this Management's Discussion and Analysis), as well as
oral statements made by representatives of the Company. Except for historical
information, matters discussed in such oral and written communications are
forward-looking statements that involve risks and uncertainties, including, but
not limited to, general business conditions, the impact of competition, taxes,
inflation, and governmental regulations.


                                       9
<PAGE>


                                     PART II
                                OTHER INFORMATION


THE DWYER GROUP, INC. AND SUBSIDIARIES


ITEM 1 - LEGAL PROCEEDINGS

         NONE

ITEM 2 - CHANGES IN SECURITIES

         (a)  NONE

         (b)  Not applicable.

         (c)  NONE

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES

         NONE

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         NONE

ITEM 5 - OTHER INFORMATION

         NONE

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

         (a)  Exhibits:

              NONE

         (b)  Reports on 8-K

              NONE


                                       10
<PAGE>

                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.




  Date:    April 30, 2002             The Dwyer Group, Inc.


                                      By: /s/ Thomas Buckley
                                          -----------------------------
                                              Thomas Buckley
                                              Vice President and Chief
                                                Financial Officer


                                       11