<PAGE>   1

                     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 SEPTEMBER 30, 2000.


[ ] 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                                (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION)                            IDENTIFICATION NO.)
</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.

<TABLE>
<S>                                            <C>
            Class                              Outstanding at November 10, 2000
----------------------------                   --------------------------------
Common stock, $.10 par value                                6,997,931
</TABLE>


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


<PAGE>   2

                              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 September 30, 2000 (unaudited)
                and December 31, 1999.............................................................................3

                Consolidated Statements of Operations for the Three Months Ended
                September 30, 2000 and 1999 (unaudited)...........................................................4

                Consolidated Statements of Operations for the Nine Months Ended
                September 30, 2000 and 1999 (Unaudited)...........................................................5

                Consolidated Statements of Cash Flows for the Nine Months
                Ended September 30, 2000 and 1999 (unaudited).....................................................6

                Notes to Condensed Consolidated Financial Statements............................................7-8

     Item 2.    Management's Discussion and Analysis of Financial
                Condition and Results of Operations............................................................9-11

PART II  -  OTHER INFORMATION

     Item 1.    Legal Proceedings................................................................................12

     Item 2.    Changes in Securities............................................................................12

     Item 3.    Defaults Upon Senior Securities..................................................................12

     Item 4.    Submission of Matters to a Vote of Security Holders..............................................12

     Item 5.    Other Information................................................................................12

     Item 6.    Exhibits and Reports on Form 8-K.................................................................12
</TABLE>


                                       2
<PAGE>   3
                     THE DWYER GROUP, INC. AND SUBSIDIARIES
                     Condensed Consolidated Balance Sheets


<TABLE>
<CAPTION>
                                                                        SEPTEMBER 30,   DECEMBER 31,
          ASSETS                                                           2000            1999
                                                                       ------------    -------------
                                                                        (Unaudited)
<S>                                                                    <C>             <C>
Current assets:
       Cash and cash equivalents                                       $    389,623    $    556,383
       Marketable securities, available-for-sale                            790,248         883,717
       Trade accounts receivable, net of allowance for doubtful
             accounts of $448,382 and $220,242, respectively              1,282,226         829,866
       Accounts receivable from related parties                             383,501          55,581
       Accrued interest receivable, including amounts due from
             related parties of $96,617 and $200,033, respectively          138,615         234,034
       Trade notes receivable, current portion, net of allowance for
             doubtful accounts of $56,225 and $56,053, respectively       1,349,267       1,345,267
       Inventories                                                          112,933          31,779
       Prepaid expenses                                                     373,252         184,579
       Federal income tax receivable                                             --         301,579
       Notes receivable from related parties, current portion               171,845         682,878
                                                                       ------------    ------------
          Total current assets                                            4,991,510       5,105,663

Property and equipment, net                                               1,035,307       1,036,107
Notes and accounts receivable from related parties                        1,749,972       1,290,998
Trade notes receivable, net of allowance for doubtful notes of
             $891,304 and $872,467, respectively                          4,521,117       3,601,029
Goodwill, net                                                             5,266,353       5,408,617
Purchased franchise rights, net                                           3,938,376       2,298,851
Covenant not to compete, net                                                 56,661          71,661
Net deferred tax asset                                                      299,013         299,013
Other assets                                                                248,761         304,988
                                                                       ------------    ------------

TOTAL ASSETS                                                           $ 22,107,070    $ 19,416,927
                                                                       ============    ============

          LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
       Accounts payable, trade                                         $    967,436    $    577,500
       Accrued liabilities                                                1,088,531       1,399,378
       Deferred franchise sales revenue                                     260,246         405,757
       Litigation reserves                                                  358,488         244,096
       Current maturities of long-term debt                               1,451,102       1,131,600
                                                                       ------------    ------------
          Total current liabilities                                       4,125,803       3,758,331

Long-term debt, less current portion                                      2,788,941       1,481,707
Deferred franchise sales revenue                                            279,395         417,432

Commitments and contingencies

Stockholders' equity:
       Preferred stock                                                           --              --
       Common stock                                                         764,519         764,519
       Additional paid-in capital                                        10,193,855      10,183,855
       Retained earnings                                                  5,322,501       4,131,821
       Accumulated other comprehensive income                              (157,792)       (130,052)
       Treasury stock, at cost                                           (1,210,152)     (1,190,686)
                                                                       ------------    ------------
          Total stockholders' equity                                     14,912,931      13,759,457
                                                                       ------------    ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                             $ 22,107,070    $ 19,416,927
                                                                       ============    ============
</TABLE>

     See notes to condensed consolidated financial statements (unaudited).

                                       3
<PAGE>   4
                     THE DWYER GROUP, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                   THREE MONTHS ENDED
                                                      SEPTEMBER 30,
                                               --------------------------
                                                  2000            1999
                                               -----------    -----------
<S>                                            <C>            <C>
REVENUES:
     Royalties                                 $ 2,857,686    $ 2,319,947
     Franchise fees                              1,052,159        957,654
     Sales of products and services                514,283        362,513
     Interest                                      169,655        134,895
     Other                                         133,194        133,569
                                               -----------    -----------
        TOTAL REVENUES                           4,726,977      3,908,578

COSTS AND EXPENSES:
     General, administrative and selling         3,308,166      2,720,845
     Costs of product and service sales            468,527        312,644
     Depreciation and amortization                 336,913        208,727
     Interest                                       71,307         21,906
                                               -----------    -----------
        TOTAL COSTS AND EXPENSES                 4,184,913      3,264,122

Income before income taxes                         542,064        644,456
Income taxes                                      (181,839)      (222,917)
                                               -----------    -----------

NET INCOME                                     $   360,225    $   421,539
                                               ===========    ===========


EARNINGS PER SHARE - BASIC                     $      0.05    $      0.06
                                               ===========    ===========

EARNINGS PER SHARE - DILUTED                   $      0.05    $      0.06
                                               ===========    ===========

WEIGHTED AVERAGE COMMON SHARES                   6,997,980      6,940,494
                                               ===========    ===========

WEIGHTED AVERAGE COMMON SHARES AND POTENTIAL
         DILUTIVE COMMON SHARES                  7,111,058      7,238,614
                                               ===========    ===========
</TABLE>

     See notes to condensed consolidated financial statements (unaudited).

                                       4
<PAGE>   5
                     THE DWYER GROUP, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                    NINE MONTHS ENDED
                                                        SEPTEMBER 30,
                                               ----------------------------
                                                  2000             1999
                                               ------------    ------------
<S>                                            <C>             <C>
REVENUES:
     Royalties                                 $  8,057,472    $  6,765,185
     Franchise fees                               3,342,549       2,910,078
     Sales of products and services               1,566,390       1,105,169
     Interest                                       501,931         365,909
     Other                                          430,788         398,013
                                               ------------    ------------
        TOTAL REVENUES                           13,899,130      11,544,354

COSTS AND EXPENSES:
     General, administrative and selling          9,532,235       8,245,208
     Costs of product and service sales           1,321,002         930,872
     Depreciation and amortization                1,009,180         575,132
     Interest                                       232,186          73,801
                                               ------------    ------------
        TOTAL COSTS AND EXPENSES                 12,094,603       9,825,013

Income before income taxes                        1,804,527       1,719,341
Income taxes                                       (613,847)       (603,010)
                                               ------------    ------------

NET INCOME                                     $  1,190,680    $  1,116,331
                                               ============    ============


EARNINGS PER SHARE - BASIC                     $       0.17    $       0.16
                                               ============    ============

EARNINGS PER SHARE - DILUTED                   $       0.17    $       0.16
                                               ============    ============

WEIGHTED AVERAGE COMMON SHARES                    7,000,613       6,924,096
                                               ============    ============

WEIGHTED AVERAGE COMMON SHARES AND POTENTIAL
         DILUTIVE COMMON SHARES                   7,153,442       7,123,264
                                               ============    ============
</TABLE>

See notes to condensed consolidated financial statements (unaudited).

                                       5
<PAGE>   6
                     THE DWYER GROUP, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)


<TABLE>
<CAPTION>
                                                                              NINE MONTHS ENDED
                                                                                SEPTEMBER 30,
                                                                         --------------------------
                                                                            2000           1999
                                                                         -----------    -----------
<S>                                                                      <C>            <C>
Operating activities:
     Net income for the period                                           $ 1,190,680    $ 1,116,331
     Adjustments to reconcile net income to
             net cash provided by (used in) operating activities:
        Depreciation and amortization                                      1,009,180        575,132
        Provision for doubtful accounts                                      132,601        132,882
        Notes received for franchise sales                                (2,265,799)    (1,842,534)
        Change in deferred tax asset                                              --        269,134
        Loss on sale of securities                                            13,048             --
    Changes in assets and liabilities:
        Accounts and interest receivable                                    (356,941)        33,701
        Net change in receivables / payables to related parties             (327,920)      (317,964)
        Inventories                                                          (81,154)         2,841
        Prepaid expenses                                                    (188,673)      (232,918)
        Federal income tax receivable                                        301,579             --
        Accounts payable and accrued liabilities                             130,071        924,018
        Litigation reserves                                                  114,392       (664,535)
        Deferred franchise sales revenue                                    (135,745)       216,469
        Other                                                                     --          6,650
                                                                         -----------    -----------
  Net cash provided by (used in) operating activities                       (464,681)       219,207
                                                                         -----------    -----------

Investing activities:
    Collections of notes receivable                                        1,149,655        476,477
    Purchases of property and equipment                                     (280,878)      (242,945)
    Purchases of franchise rights                                           (450,000)      (210,788)
    Acquisition of other assets                                              (36,771)       (68,917)
    Sale of other assets                                                          --        141,575
    Purchase of marketable securities                                        (17,663)      (113,723)
    Sale of marketable securities                                            114,403        809,759
    Increase (decrease) in unrealized gain on marketable securities               --        (31,746)
    Collections on notes receivable from related parties                      52,059        108,819
                                                                         -----------    -----------
  Net cash provided by investing activities                                  530,805        868,511
                                                                         -----------    -----------

Financing activities:
    Purchases of treasury stock                                              (19,466)      (403,571)
    Proceeds from exercise of stock options                                       --        561,824
    Proceeds from borrowings                                               1,114,994             --
    Payments on borrowings                                                (1,328,412)      (609,973)
                                                                         -----------    -----------
  Net cash used in financing activities                                     (232,884)      (451,720)
                                                                         -----------    -----------

Net increase (decrease) in cash and cash equivalents                        (166,760)       635,998
Cash and cash equivalents, beginning of period                               556,383        498,199
                                                                         -----------    -----------

Cash and cash equivalents, end of period                                 $   389,623    $ 1,134,197
                                                                         ===========    ===========
</TABLE>

     See notes to condensed consolidated financial statements (unaudited).

                                        6
<PAGE>   7

                     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") was incorporated
                  in January 1998 in order to market and service 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 September 30, 2000 and for the three months and nine
months ended September 30, 2000 and September 30, 1999 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, 1999, and with other
filings with the U.S. Securities and Exchange Commission.

The results of operations for the three months and nine months ended September
30, 2000 are not necessarily indicative of the results to be expected for the
fiscal year ending December 31, 2000.


                                        7
<PAGE>   8

C.       RECLASSIFICATIONS

Certain reclassifications have been made to the 1999 condensed consolidated
financial statements to conform to the presentation used in the 2000 condensed
consolidated financial statements. These reclassifications had no effect on
stockholders' equity or net income.

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.

NOTE 4.   COMMON STOCK

In September 1998, the Company authorized the repurchase of up to 100,000 of the
Company's common stock in the open market or in private transactions and
subsequently increased that amount to 550,000 shares. As of November 10, 2000,
the Company had repurchased 527,429 shares at an average purchase price of
$2.12. Of such shares, 7,983 have been purchased in 2000.

In early 1999, the Company issued 100,000 warrants to purchase the Company's
common stock to a nonaffiliated third party in connection with the purchase of
franchise rights. The warrants were issued at an exercise price of $3.00 per
share and expire in 2005.

NOTE 5.   PURCHASE OF FRANCHISE RIGHTS

In February of 2000, the Company entered into an agreement to purchase franchise
rights from a nonaffiliated third party. The transaction also included the
purchase of notes receivable due from certain franchisees operating in the
purchased territory. The Company paid approximately $800,000 in cash and
executed a promissory note for $1,750,000 in connection with the transaction. In
order to fund a portion of the transaction, the Company negotiated a $500,000
term loan and a $500,000 line of credit with its bank and drew down $700,000.

In April of 2000, the Company purchased additional franchise rights from another
nonaffiliated third party for $50,000 in cash.

In October of 2000, the Company purchased additional franchise rights and notes
receivable from another nonaffiliated third party. The Company paid $32,000 in
cash and executed a promissory note for $442,000 in connection with the
transaction.


                     THIS SECTION LEFT INTENTIONALLY BLANK.

                                       8
<PAGE>   9


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 1.2 to 1 at September 30,
2000 as compared to 1.4 to 1 at December 31, 1999. The Company had working
capital of approximately $866,000 at September 30, 2000 as compared to
approximately $1.3 million at December 31, 1999. For the remainder of fiscal
2000, management expects to fund working capital requirements primarily through
operating cash flow. At September 30, 2000, the Company had cash and cash
equivalents of approximately $390,000, and marketable securities of
approximately $790,000.

In the first quarter of 2000, the Company negotiated a $500,000 term loan and a
$500,000 line of credit with its bank. Of such total amount, $700,000 was drawn
at that time and was used to fund a portion of the purchase of franchise rights
as discussed in Note 5. In the third quarter, the remainder of the line of
credit was drawn and used for payments on long-term debt.

Cash in the amount of $465,000 was used in operating activities in the first
nine months of 2000, as compared to $219,000 of cash provided by such activities
for the same period in 1999. In 2000, cash was generated primarily by a net
profit of $1,191,000, depreciation and amortization of $1,009,000, a provision
for doubtful accounts of $133,000 and a decrease in a tax refund receivable of
$302,000. These amounts were more than offset by notes received from franchise
sales of $2,266,000, an increase in accounts receivables of $685,000 and an
increase of $189,000 in prepaid expenses.

In the first nine months of 2000, the Company generated $531,000 in cash from
investing activities, primarily from collections on notes receivable of
$1,202,000 and the sale of marketable securities for $114,000, partially offset
by the purchase of franchise rights for $450,000 and the purchase of property
and equipment for $281,000. For the same period in 1999, the Company generated
$869,000 in cash from investing activities, primarily from the sale of
marketable securities for $810,000, collections on notes receivable of $585,000
and the sale of other assets for $142,000, partially offset by the purchase of
property and equipment for $243,000 and the purchase of franchise rights for
$211,000.

The Company used $233,000 for financing activities in the first nine months of
2000. Payments on borrowings of $1,328,000 and the purchase of treasury stock
for $19,000 were partially offset by proceeds on borrowings of $1,115,000. In
the first nine months of 1999, the Company used $452,000 in cash for financing
activities for payments on borrowings of $610,000 and purchases of treasury
stock for $404,000, partially offset by proceeds from the exercise of stock
options of $562,000.

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 nine months ended September 30, 2000, compared to the nine months ended
September 30, 1999.

Total revenues for the nine months increased by $2,355,000 (20%) to $13,899,000
in 2000 from $11,544,000 in 1999. This increase is due to increases in each of
the Company's revenue categories as follows: royalties - $1,292,000 (19%);
franchise fees - $432,000 (15%); sales of products and services - $461,000
(42%); interest - $136,000 (37%); and other - $33,000 (8%).


                                       9
<PAGE>   10

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

<TABLE>
<S>                                <C>                  <C>
         Mr. Rooter                $ 639,000            23%
         Mr. Electric              $ 295,000            61%
         Glass Doctor              $ 141,000            14%
         Aire Serv                $   79,000            22%
         Mr. Appliance            $   62,000            76%
         Rainbow                  $   20,000             1%
</TABLE>

In addition to the above, royalties from the Company's Canadian operations
increased by $56,000 (24%).

Overall, these royalty revenue increases coincide with the increased business
revenues of existing franchisees as well as an increase in the number of
franchisees producing revenue. These increases 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 - $110,000 (15%); Aire Serv - $37,000 (8%); Mr.
Appliance - $32,000 (29%); and Glass Doctor - $334,000 (50%). These increases
were partially offset by a decrease in franchise fees generated from: Mr.
Electric - $55,000 (9%); Rainbow - $15,000 (8%); and TDG Canada - $11,000 (16%).

Sales of products and services increased by $461,000 (42%), due to additional
sales made by National Accounts.

Interest income increased by $136,000 (37%) due to an increase in trade notes
receivable related to the sale of franchises.

General and administrative expenses increased by $1,287,000 (16%). This increase
was primarily a result of additional costs and personnel associated with the
increase in overall revenues, and additional franchise sales personnel hired
during the third quarter in an effort to increase franchise sales revenues in
future periods. In addition, the Company settled lawsuits for approximately
$130,000 in order to avoid future legal costs.

Due to the increase in product and service sales, costs associated with such
sales increased by $390,000 (42%).

Depreciation and amortization increased by $434,000 (75%) due primarily to
amortization of franchise rights purchased in late 1999 and early 2000.

Interest expense increased by $158,000 (215%) due to additional debt resulting
from the purchase of franchise rights.

The Company reported net income of $1,190,000 for the nine months ended
September 30, 2000 as compared to net income of $1,116,000 for the same period
in 1999.

For the three months ended September 30, 2000, compared to the three months
ended September 30, 1999.

Total revenues for the quarter increased by $818,000 (21%) to $4,727,000 in 2000
from $3,909,000 in 1999. This increase is due to an increase of $538,000 (23%)
in royalties, an increase of $95,000 (10%) in franchise fees, an increase of
$152,000 (42%) in sales of products and services and an increase of $35,000
(26%) in interest income.

Royalty revenues increased for the following franchise concepts:

<TABLE>
<S>                                 <C>              <C>
         Mr. Rooter                 $291,000         33%
         Mr Electric                $117,000         61%
         Glass Doctor                $57,000         16%
         Aire Serv                   $49,000         37%
         Mr. Appliance               $16,000         58%
</TABLE>


                                       10
<PAGE>   11

In addition to the above, royalties from the Company's Canadian operations
increased by $19,000 (24%). These increases were partially offset by a decrease
in royalties of $12,000 (2%) from Rainbow.

Overall, these royalty revenue increases coincide with the increase business
revenues of existing franchisees as well as an increase in the number of
franchisees producing revenue. These increases 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.

Franchise sales revenues increased by $95,000 (10%) from 1999 to 2000. Increases
from: Glass Doctor - $285,000 (291%); and Aire Serv - $75,000 (90%) were
partially offset by decreases from Mr. Rooter - $49,000 (13%); Mr. Electric -
$191,000 (64%); and Rainbow - $26,000 (61%). The increase from Glass Doctor was
due primarily to the sale of a number of larger territories in 2000. The
decrease from Mr. Electric was due primarily to the sale of a large territory in
1999.

Sales of products and services increased by $152,000 (42%) due to additional
sales made by National Accounts.

Interest income increased by $35,000 (26%) due to an increase in trade notes
receivable related to the sale of new franchises.

General and administrative expenses increased by $587,000 (22%). This increase
was primarily a result of additional costs and personnel associated with the
increase in overall revenues, and additional franchise sales personnel hired
during the quarter in an effort to increase franchise sales revenues in future
periods. In addition, the Company settled lawsuits for approximately $130,000 in
order to avoid future legal costs.

Depreciation and amortization increased by $128,000 (61%), due primarily to
amortization of franchise rights purchased in late 1999 and early 2000.

Interest expense increased by $49,000 (225%) due to additional debt resulting
from the purchase of franchise rights.

The Company reported net income of $360,000 for the quarter ended September 30,
2000 as compared to net income of $422,000 for the same period in 1999.

IMPACT OF INFLATION

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

FOREIGN OPERATIONS

The Company operates in 19 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 2000, 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.


                                       11
<PAGE>   12

                                     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:

                  Financial Data Schedule

         (b)      Reports on 8-K

                  NONE


                                       12
<PAGE>   13

                                   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:    November 10, 2000              The Dwyer Group, Inc.


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

<PAGE>   14

                               INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER                   DESCRIPTION
-------                  -----------
<S>            <C>
 27            Financial Data Schedule
</TABLE>