<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 MARCH 31, 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)

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

                  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 May 10, 2000
----------------------------                      ---------------------------
Common stock, $.10 par value                               7,002,314



     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>                                                                              <C>
     Item 1.    Financial Statements

                Condensed Consolidated Balance Sheets as of March 31, 2000 (unaudited)
                and December 31, 1999................................................................3

                Consolidated Statements of Income for the Three Months Ended
                March 31, 2000 and 1999 (unaudited)..................................................4

                Consolidated Statements of Cash Flows for the Three Months
                Ended March 31, 2000 and 1999 (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>   3

                     THE DWYER GROUP, INC. AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                          MARCH 31,        DECEMBER 31,
          ASSETS                                                             2000              1999
                                                                         ------------      ------------
                                                                                 (Unaudited)
<S>                                                                      <C>             <C>
Current assets:
       Cash and cash equivalents                                         $    635,987      $    556,383
       Marketable securities, available-for-sale                              887,185           883,717
       Trade accounts receivable, net of allowance for doubtful
             accounts of $251,813 and $220,242, respectively                  878,415           829,866
       Accounts receivable from related parties                               238,540            55,581
       Accrued interest receivable, including amounts due from
             related parties of $26,625 and $200,033, respectively             49,189           234,034
       Trade notes receivable, current portion, net of allowance for
             doubtful accounts of $59,203 and $56,053, respectively         1,420,880         1,345,267
       Inventories                                                             45,616            31,779
       Prepaid expenses                                                       282,233           184,579
       Federal income tax receivable                                          139,684           301,579
       Notes receivable from related parties, current portion                 174,155           682,878
                                                                         ------------      ------------
          Total current assets                                              4,751,884         5,105,663

Property and equipment, net                                                 1,030,668         1,036,107
Notes and accounts receivable from related parties                          1,801,772         1,290,998
Trade notes receivable, net of allowance for doubtful notes of
             $943,301 and $872,467, respectively                            3,967,490         3,601,029
Goodwill, net                                                               5,361,215         5,408,617
Purchased franchise rights, net                                             4,266,885         2,298,851
Covenant not to compete, net                                                   66,661            71,661
Net deferred tax asset                                                        299,013           299,013
Other assets                                                                  316,324           304,988
                                                                         ------------      ------------

TOTAL ASSETS                                                             $ 21,861,912      $ 19,416,927
                                                                         ============      ============

          LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
       Accounts payable, trade                                           $    943,880      $    577,500
       Accrued liabilities                                                  1,591,240         1,399,378
       Deferred franchise sales revenue                                       244,480           405,757
       Litigation reserves                                                    260,960           244,096
       Current maturities of long-term debt                                 1,112,403         1,131,600
                                                                         ------------      ------------
          Total current liabilities                                         4,152,963         3,758,331

Long-term debt, less current portion                                        3,280,214         1,481,707
Deferred franchise sales revenue                                              348,990           417,432

Commitments and contingencies

Stockholders' equity:
       Preferred stock                                                           --                --
       Common stock                                                           764,519           764,519
       Additional paid-in capital                                          10,183,855        10,183,855
       Retained earnings                                                    4,464,369         4,131,821
       Accumulated other comprehensive income                                (133,804)         (130,052)
       Treasury stock, at cost                                             (1,199,194)       (1,190,686)
                                                                         ------------      ------------
          Total stockholders' equity                                       14,079,745        13,759,457
                                                                         ------------      ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                               $ 21,861,912      $ 19,416,927
                                                                         ============      ============
</TABLE>

      See notes to condensed consolidated financial statements (unaudited).


                                       3
<PAGE>   4

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


<TABLE>
<CAPTION>
                                                 THREE MONTHS ENDED MARCH 31,
                                                    2000              1999
                                                 -----------      -----------
<S>                                              <C>              <C>
REVENUES:
     Royalties                                   $ 2,428,312      $ 1,991,439
     Franchise fees                                1,134,407          778,834
     Sales of products and services                  564,373          431,163
     Interest                                        170,693          129,709
     Other                                           146,732          130,656
                                                 -----------      -----------

        TOTAL REVENUES                             4,444,517        3,461,801

COSTS AND EXPENSES:
     General, administrative and selling           3,055,537        2,509,850
     Costs of product and service sales              452,048          356,594
     Depreciation and amortization                   338,730          169,755
     Interest                                         90,064           29,533
                                                 -----------      -----------

        TOTAL COSTS AND EXPENSES                   3,936,379        3,065,732

Income before income taxes                           508,138          396,068
Income taxes                                        (175,590)        (141,459)
                                                 -----------      -----------

NET INCOME                                       $   332,548      $   254,609
                                                 ===========      ===========

EARNINGS PER SHARE - BASIC                       $      0.05      $      0.04
                                                 ===========      ===========

EARNINGS PER SHARE - DILUTED                     $      0.05      $      0.04
                                                 ===========      ===========

WEIGHTED AVERAGE COMMON SHARES                     7,002,670        6,956,981
                                                 ===========      ===========

WEIGHTED AVERAGE COMMON SHARES AND POTENTIAL
         DILUTIVE COMMON SHARES                    7,201,972        7,113,057
                                                 ===========      ===========
</TABLE>


     See notes to condensed consolidated financial statements (unaudited).



                                      4
<PAGE>   5

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


<TABLE>
<CAPTION>
                                                                         THREE MONTHS ENDED MARCH 31,
                                                                         ----------------------------
                                                                              2000           1999
                                                                         ------------    ------------
<S>                                                                      <C>             <C>
Operating activities:
     Net income                                                            $ 332,548      $ 254,609
     Adjustments to reconcile net income to
                  net cash provided by (used in) operating activities:
        Depreciation and amortization                                        338,730        169,755
        Change in reserve for doubtful accounts                              (96,330)         5,305
        Notes received for franchise sales                                  (762,389)      (454,278)
        Change in deferred tax asset                                            --          158,293
        Other adjustments                                                       --            2,558
    Changes in assets and liabilities:
        Accounts and interest receivable                                     136,296       (132,960)
        Net change in receivables / payables to related parties             (182,959)        36,068
        Inventories                                                          (13,837)         2,300
        Prepaid expenses                                                     (97,654)       (60,168)
        Federal income tax receivable                                        161,895           --
        Accounts payable and accrued liabilities                             558,242        464,118
        Litigation reserves                                                   16,864       (579,503)
        Deferred franchise sales revenue                                    (229,719)       (31,728)
        Other                                                                   --           (2,679)
                                                                           ---------      ---------
  Net cash provided by (used in) operating activities                        161,687       (168,310)
                                                                           ---------      ---------

Investing activities:
    Collections of notes receivable                                          416,927        251,840
    Purchases of property and equipment                                      (94,920)       (73,279)
    Purchases of franchise rights                                           (400,000)          --
    Purchases of other assets                                                (16,330)       (14,979)
    Sale of marketable securities                                               --          573,925
    Purchase of marketable securities                                         (6,511)          --
    Increase (decrease) in unrealized gain on marketable securities             --          (38,210)
    Collections on notes receivable from related parties                      (2,051)        35,578
                                                                           ---------      ---------
  Net cash provided by (used in) investing activities                       (102,885)       734,875
                                                                           ---------      ---------

Financing activities:
    Purchases of treasury stock                                               (8,508)      (182,392)
    Proceeds from borrowings                                                 700,000           --
    Payments on borrowings                                                  (670,690)      (164,301)
                                                                           ---------      ---------
  Net cash provided by (used in) financing activities                         20,802       (346,693)
                                                                           ---------      ---------

Net increase in cash and cash equivalents                                     79,604        219,872
Cash and cash equivalents, beginning of period                               556,383        498,199
                                                                           ---------      ---------

Cash and cash equivalents, end of period                                   $ 635,987      $ 718,071
                                                                           =========      =========
</TABLE>


      See notes to condensed consolidated financial statements (unaudited).




                                       5
<PAGE>   6



                     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 March 31, 2000, for the three months ended March 31, 2000
and for the three months ended March 31 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 ended March 31, 2000 are not
necessarily indicative of the results to be expected for the fiscal year ending
December 31, 2000.




                                       6
<PAGE>   7

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 May 10, 2000, the
Company had repurchased 523,046 shares at an average purchase price of $2.11. Of
such shares, 3,600 have been purchased in 2000.


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.



                     THIS SECTION LEFT INTENTIONALLY BLANK.





                                       7
<PAGE>   8



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 1.1 to 1 at March 31, 2000
as compared to 1.4 to 1 at December 31, 1999. The Company had working capital of
approximately $600,000 at March 31, 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 March 31, 2000, the Company had cash and cash equivalents of
approximately $636,000, and marketable securities of approximately $887,000.

In February 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 received and
was used to fund a portion of the purchase of franchise rights as discussed in
Note 5.

Cash in the amount of $162,000 was provided by operating activities in the first
quarter of 2000, as compared to $168,000 of cash used in operating activities
for the same period in 1999. In 2000, cash was generated primarily by a net
profit of $333,000, depreciation and amortization of $339,000, an increase in
payables and accrued liabilities of $558,000 and a decrease in a tax refund
receivable of $162,000, partially offset by notes received from franchise sales
of $762,000 and a decrease in deferred franchise sales revenue of $229,000. For
the same period in 1999, cash was used for payments against litigation reserves
and $579,000, which was partially offset by cash generated from an increase in
accounts payable and accrued liabilities of $464,000, a decrease in the deferred
tax asset of $158,000, and net income of $255,000.

In the first quarter of 2000, the Company used $103,000 in cash for investing
activities, primarily for the purchase of franchise rights for $400,000 and the
purchase of property and equipment for $95,000, partially offset by collections
on notes receivable of $417,000. For the same period in 1999, the Company
generated $735,000 in cash from investing activities, primarily from the sale of
marketable securities of $575,000 and collections of notes receivable of
$287,000, partially offset by purchases of property and equipment of $73,000.

The Company generated $21,000 from financing activities in the first quarter of
2000. Proceeds from borrowings of $700,000 were partially offset by payments on
borrowings of $671,000 and the purchase of $8,000 in treasury stock. In the
first quarter of 1999, the Company used $347,000 in cash for financing
activities for payments on borrowings of $164,000 and for purchases of treasury
stock of $182,000.

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 three months ended March 31, 2000, compared to the three months ended
March 31, 1999.

Total revenues for the quarter increased by $983,000 to $4,445,000 in 2000 from
$3,462,000 in 1999. This increase is due to increases in each of the Company's
revenue categories as follows: royalties - $437,000 (21%); franchise fees -
$356,000 (46%); sales of products and services - $133,000 (31%); interest -
$41,000 (32%); and other - $16,000 (12%).

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

<TABLE>
<S>                                <C>                 <C>
         Mr. Rooter                $ 194,000           (21%)
         Mr. Electric              $  90,000           (67%)
         Rainbow                   $  71,000           (16%)
         Mr. Appliance             $  22,000           (90%)
         Aire Serv                 $   4,000            (4%)
</TABLE>




                                       8
<PAGE>   9

In addition to the above, royalties from the Company's Canadian operations
increased by $22,000 (31%).

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 - $230,000 (264%); Mr. Electric - $89,000 (100%);
Rainbow - $18,000 (38%); Mr. Appliance - $44,000 (151%); and Aire Serv -
$145,000 (95%). These increases were partially offset by a decrease of $131,000
in franchise fees generated from Glass Doctor due to the sale of two large
territories in 1999.

Sale of products and services increased by $133,000 (31%), due to additional
sales made by National Accounts.

General and administrative expenses increased by $546,000 (22%), 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 $95,000 (27%).

Depreciation and amortization increased by $169,000 (99%) due primarily to
amortization of franchise rights purchased in late 1999 and early 2000.

Interest expense increased by $61,000 (205%) due to additional debt resulting
from the purchase of franchise rights.

The Company reported net income of $333,000 for the quarter ended March 31, 2000
as compared to net income of $255,000 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.



                                       9
<PAGE>   10


                                     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




                                       10
<PAGE>   11

                                   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: May 10, 2000                The Dwyer Group, Inc.


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



                                       11
<PAGE>   12


                               INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT NO.         DESCRIPTION
-----------         -----------
<S>                 <C>
   27               Financial Data Schedule
</TABLE>