<PAGE>
 
                                 Exhibit 10.6

             Termination Agreement by and between Douglas Holsted
                     and the Company dated March 21, 1995.
<PAGE>
 
                 MUTUAL SETTLEMENT AGREEMENT, GENERAL RELEASE
                            AND COVENANT NOT TO SUE
                 --------------------------------------------

     This MUTUAL SETTLEMENT AGREEMENT, GENERAL RELEASE AND COVENANT NOT TO SUE 
(the "Agreement") is made and entered into as of the date indicated below by and
between GENERAL BUSINESS SERVICES, INC., a Texas corporation ("GBS"), EDWIN K. 
WILLIAMS & CO., a Colorado corporation ("EKW") and THE DWYER GROUP, INC., a 
Delaware corporation ("Dwyer") (collectively referred to as "the Companies") and
DOUGLAS C. HOLSTED, individually ("Holsted").

     WHEREAS, Holsted was employed by GBS from January 7, 1993 through March 21,
1995, most recently in the position of President;

     WHEREAS, Holsted was employed by EKW from May 14, 1994 through March 21, 
1995, most recently in the position of President;

     WHEREAS, Holsted was employed as Chief Financial Officer by Dwyer and/or a 
company owned or affiliated with Dwyer from April 1991 through December 1994;

     WHEREAS, Holsted is currently indebted to GBS for the sum indicated on 
Exhibit "A" attached hereto;

     WHEREAS, prior to the execution of this Agreement, Holsted has voluntarily 
resigned his employment with the Companies, effective March 21, 1995;

     WHEREAS, prior to the execution of this Agreement, Holsted has fully read 
this Agreement, has been given adequate time to consider this Agreement, a 
reasonable opportunity to consult with advisors of Holsted's choosing and 
understands this Agreement;

     WHEREAS, Holsted and the Companies desire to provide for an orderly 
termination of the employment relationship and to settle fully and finally, in 
the manner set forth herein, all differences between them which have arisen or 
which might arise in the future, including but not limited to all claims and 
controversies arising out of the employment relationship between Holsted and the
Companies.

     NOW, THEREFORE, in consideration of the Recitals and mutual promises, 
covenants and agreements set forth in this Agreement, Holsted and the Companies 
covenant and agree as follows:

     1.    Holsted, for himself and on behalf of his heirs, assigns, successors,
executors, administrators and attorneys, IRREVOCABLY AND UNCONDITIONALLY 
RELEASES, ACQUITS AND FOREVER DISCHARGES the Companies, any current, past or 
future parent, subsidiaries, affiliated and related corporations, firms, 
associations, partnerships and entities, and their successors and assigns, and 

MUTUAL SETTLEMENT AGREEMENT, GENERAL RELEASE AND COVENANT NOT TO SUE -- PAGE 1
--------------------------------------------------------------------
<PAGE>
 
the current and former owners, shareholders, directors, officers, employees, 
agents, attorneys, representatives and insurers of said corporations, firms, 
associations, partnerships and entities, and their guardians, successors, 
assigns, heirs, executors and administrators (collectively referred to as 
"Releasees"), from any and all claims, complaints, grievances, liabilities, 
obligations, promises, agreements, damages, causes of action, and expenses 
whatsoever, including attorney's fees and expenses.

     2.   Holsted, for himself and on behalf of his heirs, assigns, successors, 
executors, administrators and attorneys, COVENANTS NOT TO SUE OR OTHERWISE 
VOLUNTARILY CONSENT TO PARTICIPATE IN AN ACTION AGAINST any of the Releasees 
under municipal, local, state or federal law, common or statutory, for any 
actions or omissions whatsoever, whether known or unknown and whether connected 
with the employment of Holsted by the Companies or not, except as may be 
required in response to lawful judicial process.

     3.   From and after the effective date of this Agreement, Holsted agrees 
that he will keep the terms, amount and fact of this Agreement STRICTLY AND 
COMPLETELY CONFIDENTIAL and that he will not communicate or otherwise disclose 
the terms, amount or fact of this Agreement to any employee of the Companies 
(past, present or future) or to a member of the general public, except as may be
required in response to lawful judicial process.

     4.   Holsted waives and forever releases any right or rights he might have 
to employment, re-employment, reinstatement with the Companies and any of the 
Releasees named in this Agreement.

     5.   Holsted agrees to surrender all keys and tangible personal property 
belonging to the Companies and represents that he has returned to and left in 
the custody of the Companies all documents and property, including but not 
limited to computers, computer netport cards, papers, keys, files, records, 
books or other materials belonging to the Companies or any other Releasee, 
whether in writing, or recorded by manual or electronic means, whether located 
at Holsted's residence or the offices of the Companies.

     6.   Holsted acknowledges that by virtue of his employment with the 
Companies, he acquired knowledge and experience and/or was a participant or 
witness to events and circumstances that may be important in pending and future 
litigation, arbitration and/or administrative proceedings involving the 
Companies. Holsted agrees to cooperate fully with all reasonable requests of the
Companies, at the Companies' expense, in conjunction with any such litigation, 
arbitration and/or administrative proceedings involving the Companies which 
cover a time period in which Holsted was employed by the Companies. Holsted also
agrees that he will not, without the prior written consent of the Companies, 
cooperate with or assist any person or entity which is or which may become an 
adverse 

MUTUAL SETTLEMENT AGREEMENT, GENERAL RELEASE AND COVENANT NOT TO SUE -- PAGE 2
--------------------------------------------------------------------
<PAGE>
 
party to the Companies or any of the Releasees in any litigation, arbitration 
and/or administrative proceeding, or disclose or make available to such person 
or entity any information or documents which may be relevant to such, except as 
may be required by law or compulsory process.

     7.  Holsted acknowledges that during the course of employment, he had 
access to and did receive confidential information about the Companies, 
including customer lists and other trade secrets; Holsted represents and 
covenants that he will in no way divulge, use or in any way employ such 
confidential information; provided, however, that this Agreement does not 
prohibit Holsted from using the occupational skill of franchising in his future 
employment.

     8.  Holsted acknowledges that he is indebted to the GBS for the sum shown 
on Exhibit "A" attached hereto.

     9.  Holsted and the Companies agree that they shall effect a final 
reconciliation of all outstanding business expense advances and/or reports and 
the like within 30 days after the effective date hereof.

     10. Holsted and the Companies warrant and represent to one another that 
they will not undertake any future conduct which is intended to damage any of 
the franchise systems affiliated with the Companies or which discredits Holsted 
or the Companies in the eyes of franchisees, the franchise community or third 
parties.

     11. In consideration for this Agreement, the Companies agree to do the 
following:

         (a)  excuse and release Holsted's indebtedness to GBS in the amount 
     shown on Exhibit "A" attached hereto; a portion of said amount, to be 
     determined in the final reconciliation of accounts referred to in Section 
     9 above, shall be added to Holsted's W-2 for calendar year 1995 as income 
     and Holsted shall be liable for all tax obligations, if any, with respect 
     to this sum;

         (b)  pay Holsted the equivalent of his salary as of the effective date 
     of this Agreement in accordance with the Companies' usual bi-weekly payroll
     period for a period commencing on Friday, March 31, 1995 and concluding on 
     Friday, June 9, 1995. The amounts paid shall be subject to withholding as 
     required by law;

         (c)  as to any obligations or liabilities not released in subsection 
     11(a), the Companies, for themselves and on behalf of any parent, 
     subsidiaries, affiliated and related corporations, firms, associations, 
     partnerships and entities, and their successors and

MUTUAL SETTLEMENT AGREEMENT, GENERAL RELEASE AND COVENANT NOT TO SUE -- PAGE 3
--------------------------------------------------------------------
<PAGE>
 
     assigns, and the current and former owners, shareholders, directors, 
     officers, employees, agents, attorneys, representatives and insurers of 
     said corporations, firms, associations, partnerships and entities, and 
     their guardians, successors, assigns, heirs, executors and administrators, 
     does irrevocably and unconditionally release, acquit and forever discharge 
     Holsted, his heirs, assigns, successors, executors, administrators and 
     attorneys, from any and all claims, complaints, grievances, liabilities, 
     obligations, promises, agreements, damages, causes of action and expenses 
     (including attorneys' fees and expenses) whatsoever, and covenants not to
     sue, or otherwise consent to voluntarily participate in any action against 
     Holsted, his heirs, assigns, successors, executors, administrators and 
     attorneys, under municipal, local, state or federal law, common or 
     statutory, for any actions or omissions whatsoever, whether known or 
     unknown and whether connected with the employment of Holsted by the 
     Companies or not, except as may be required by law or compulsory process.

     12.  Holsted and the Companies recognize that by entering into this 
Agreement, the Companies and Holsted do not admit and do specifically deny any 
violation of any local, state or federal law, common or statutory. Holsted and 
the Companies further recognize that this Agreement has been entered into in 
release and compromise of any claims which might be asserted by Holsted or the 
Companies in regard to Holsted's employment by the Companies and to avoid the 
expense and burden of any litigation related thereto.

     13.  This Agreement constitutes the entire Agreement of the parties hereto 
and supersedes all prior and contemporaneous negotiations and agreements, oral
or written. All rights, duties and remedies provided by this Agreement to the
parties hereto are independent of and not affected by any release or forbearance
which is part of this Agreement. All prior and contemporaneous negotiations and
agreements are deemed incorporated and merged into this Agreement and are deemed
to have been abandoned if not so incorporated. No representations, oral or
written, are being relied upon by either party in executing this Agreement,
other than the express representations of this Agreement. This Agreement cannot
be changed or terminated orally.

     14.  This Agreement shall be governed by and construed in accordance with 
the laws of the state of Texas.

     15.  SIGNED AND EXECUTED at Waco, Texas this 21st day of March, 1995.

MUTUAL SETTLEMENT AGREEMENT, GENERAL RELEASE AND COVENANT NOT TO SUE -- PAGE 4
--------------------------------------------------------------------
<PAGE>
 
                                       THE COMPANIES:

                                       THE DWYER GROUP, INC.

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


                                       GENERAL BUSINESS SERVICES, INC.

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


                                       EDWIN K. WILLIAMS & CO.

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


     By my signature below, I represent that I have been given adequate time to 
consider this Agreement. I have fully read and understand this Agreement and I 
sign it of my own free will.


                                       /s/ Douglas C. Holsted
                                       ----------------------------------------
                                       Douglas C. Holsted


THE STATE OF TEXAS    (S)
                      (S)
COUNTY OF McLENNAN    (S)

     BEFORE ME, the undersigned authority, on this day personally appeared 
ROBERT E. TUNMIRE, PRESIDENT of THE DWYER GROUP, INC., and acknowledged that he 
executed the same as the act of THE DWYER GROUP, INC. in the capacity stated and
as the act of all other legal persons or entities claiming through or being 
released through THE DWYER GROUP, INC. for the purpose and consideration therein
expressed.

     Given under my hand and seal of office on this 21st day of March, 1995.

[SEAL OF MICHAELE WEATHERBIE             /s/ Michaele Weatherbie
      APPEARS HERE]                      -----------------------------
                                         Notary Public, State of Texas

MUTUAL SETTLEMENT AGREEMENT, GENERAL RELEASE AND COVENANT NOT TO SUE -- PAGE 5
--------------------------------------------------------------------
<PAGE>
 
THE STATE OF TEXAS  (S)
                    (S)
COUNTY OF McLENNAN  (S)

     BEFORE ME, the undersigned authority, on this day personally appeared 
ROBERT E. TUNMIRE, CHIEF EXECUTIVE OFFICER of GENERAL BUSINESS SERVICES, INC., 
and acknowledged that he executed the same for the purpose and consideration 
therein expressed, and in the capacity therein stated.

     Given under my hand and seal of office on this 21st day of March, 1995.

[SEAL OF MICHAELE WEATHERBIE                  /s/ Michaele Weatherbie
       APPEARS HERE]                       -----------------------------
                                           Notary Public, State of Texas

THE STATE OF TEXAS  (S)
                    (S)
COUNTY OF McLENNAN  (S)

     BEFORE ME, the undersigned authority, on this day personally appeared 
ROBERT E. TUNMIRE, CHIEF EXECUTIVE OFFICER of EDWIN K. WILLIAMS & CO., and 
acknowledged that he executed the same for the purpose and consideration therein
expressed, and in the capacity therein stated.

     Given under my hand and seal of office on this 21st day of March, 1995.

[SEAL OF MICHAELE WEATHERBIE                  /s/ Michaele Weatherbie
       APPEARS HERE]                       -----------------------------
                                           Notary Public, State of Texas

THE STATE OF TEXAS  (S)
                    (S)
COUNTY OF McLENNAN  (S)

     BEFORE ME, the undersigned authority, on this day personally appeared 
DOUGLAS C. HOLSTED, and acknowledged that he executed the same for the purpose 
and consideration therein expressed.

     Given under my hand and seal of office on this 21st day of March, 1995.

[SEAL OF MICHAELE WEATHERBIE                  /s/ Michaele Weatherbie
       APPEARS HERE]                       -----------------------------
                                           Notary Public, State of Texas

MUTUAL SETTLEMENT AGREEMENT, GENERAL RELEASE AND COVENANT NOT TO SUE -- PAGE 6
--------------------------------------------------------------------
<PAGE>
 
<TABLE> 

<S>                                  <C>              <C> 
General Business Services, Inc.
Doug Holsted Bonus Activity
12/31/94 (PRELIMINARY)**

                                                      HOLSTED
                                                      2.5% BONUS
                                                      ----------
1994 GBS NET INCOME                  $351,049.05

ADD:
Provision for Federal Income Tax     $243,793.29
Bonus Expensed during 1994            $20,227.07


PRE TAX/PRE BONUS INCOME             $615,069.41      $15,376.74


LESS PAYMENTS DURING 1994:
        ck 101202  Jul-94                             ($9,713.41)
        ck 101395  Oct-94                             ($8,197.00)
        ck 302440  Sep-94                             ($5,000.00)

                                                      -----------
PRELIMINARY TOTAL OVERPAID TO DOUG FOR 1994 BONUS     ($7,533.67)
                                                      ===========
</TABLE> 

**THIS SCHEDULE IS SUBJECT TO CHANGE AS A RESULT OF AUDIT ADJUSTMENTS
WHICH MAY BE RECEIVED SUBSEQUENT TO TODAY'S DATE OF MARCH 20, 1995.

                                    Page 1