<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 JUNE 30, 2000.


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


                                     0-15227
                             COMMISSION FILE NUMBER



                              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 August 4, 2000
----------------------------                      -----------------------------
Common stock, $.10 par value                                           6,997,981



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

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

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

                Consolidated Statements of Cash Flows for the Six Months
                Ended June 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>
                                                                          JUNE 30,      DECEMBER 31,
          ASSETS                                                           2000            1999
                                                                        -----------    ------------
                                                                       (Unaudited)
<S>                                                                    <C>             <C>
Current assets:
       Cash and cash equivalents                                       $    472,569    $    556,383
       Marketable securities, available-for-sale                            892,012         883,717
       Trade accounts receivable, net of allowance for doubtful
             accounts of $400,779 and $220,242, respectively              1,107,065         829,866
       Accounts receivable from related parties                             260,442          55,581
       Accrued interest receivable, including amounts due from
             related parties of $61,621 and $200,033, respectively          102,134         234,034
       Trade notes receivable, current portion, net of allowance for
             doubtful accounts of $59,243 and $56,053, respectively       1,421,697       1,345,267
       Inventories                                                          111,185          31,779
       Prepaid expenses                                                     497,477         184,579
       Federal income tax receivable                                             --         301,579
       Notes receivable from related parties, current portion               172,696         682,878
                                                                       ------------    ------------
          Total current assets                                            5,037,277       5,105,663

Property and equipment, net                                                 997,861       1,036,107
Notes and accounts receivable from related parties                        1,776,261       1,290,998
Trade notes receivable, net of allowance for doubtful notes of
             $910,332 and $872,467, respectively                          4,291,159       3,601,029
Goodwill, net                                                             5,313,808       5,408,617
Purchased franchise rights, net                                           4,134,302       2,298,851
Covenant not to compete, net                                                 61,661          71,661
Net deferred tax asset                                                      299,013         299,013
Other assets                                                                319,396         304,988
                                                                       ------------    ------------

TOTAL ASSETS                                                           $ 22,230,738    $ 19,416,927
                                                                       ============    ============

          LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
       Accounts payable, trade                                         $    948,797    $    577,500
       Accrued liabilities                                                1,771,640       1,399,378
       Deferred franchise sales revenue                                     235,146         405,757
       Litigation reserves                                                  240,478         244,096
       Current maturities of long-term debt                               1,121,568       1,131,600
                                                                       ------------    ------------
          Total current liabilities                                       4,317,629       3,758,331

Long-term debt, less current portion                                      2,995,655       1,481,707
Deferred franchise sales revenue                                            349,562         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                                                  4,962,276       4,131,821
       Accumulated other comprehensive income                              (142,731)       (130,052)
       Treasury stock, at cost                                           (1,210,027)     (1,190,686)
                                                                       ------------    ------------
          Total stockholders' equity                                     14,567,892      13,759,457
                                                                       ------------    ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                             $ 22,230,738    $ 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 JUNE 30,
                                                  2000           1999
                                               -----------    ------------
<S>                                            <C>            <C>
REVENUES:
     Royalties                                 $ 2,771,474    $ 2,453,799
     Franchise fees                              1,155,983      1,173,590
     Sales of products and services                487,734        311,493
     Interest                                      161,583        101,305
     Other                                         150,862        133,788
                                               -----------    -----------
        TOTAL REVENUES                           4,727,636      4,173,975

COSTS AND EXPENSES:
     General, administrative and selling         3,168,532      3,014,513
     Costs of product and service sales            400,427        261,634
     Depreciation and amortization                 333,537        196,650
     Interest                                       70,815         22,362
                                               -----------    -----------
        TOTAL COSTS AND EXPENSES                 3,973,311      3,495,159

Income before income taxes                         754,325        678,816
Income taxes                                      (256,418)      (238,634)
                                               -----------    -----------

NET INCOME                                     $   497,907    $   440,182
                                               ===========    ===========


EARNINGS PER SHARE - BASIC                     $      0.07    $      0.06
                                               ===========    ===========

EARNINGS PER SHARE - DILUTED                   $      0.07    $      0.06
                                               ===========    ===========

WEIGHTED AVERAGE COMMON SHARES                   7,001,219      6,883,531
                                               ===========    ===========

WEIGHTED AVERAGE COMMON SHARES AND POTENTIAL
         DILUTIVE COMMON SHARES                  7,147,326      7,029,425
                                               ===========    ===========
</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>
                                                SIX MONTHS ENDED JUNE 30,
                                                  2000            1999
                                               -----------    ------------
<S>                                            <C>            <C>
REVENUES:
     Royalties                                 $ 5,199,786    $ 4,445,238
     Franchise fees                              2,290,390      1,952,424
     Sales of products and services              1,052,107        742,656
     Interest                                      332,276        231,014
     Other                                         297,594        264,444
                                               -----------    -----------
        TOTAL REVENUES                           9,172,153      7,635,776

COSTS AND EXPENSES:
     General, administrative and selling         6,224,069      5,524,363
     Costs of product and service sales            852,475        618,228
     Depreciation and amortization                 672,267        366,405
     Interest                                      160,879         51,895
                                               -----------    -----------
        TOTAL COSTS AND EXPENSES                 7,909,690      6,560,891

Income before income taxes                       1,262,463      1,074,885
Income taxes                                      (432,008)      (380,093)
                                               -----------    -----------

NET INCOME                                     $   830,455    $   694,792
                                               ===========    ===========


EARNINGS PER SHARE - BASIC                     $      0.12    $      0.10
                                               ===========    ===========

EARNINGS PER SHARE - DILUTED                   $      0.12    $      0.10
                                               ===========    ===========

WEIGHTED AVERAGE COMMON SHARES                   7,001,944      6,920,053
                                               ===========    ===========

WEIGHTED AVERAGE COMMON SHARES AND POTENTIAL
         DILUTIVE COMMON SHARES                  7,174,649      7,071,038
                                               ===========    ===========
</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>
                                                                       SIX MONTHS ENDED JUNE 30,
                                                                          2000           1999
                                                                      -----------    ------------
<S>                                                                   <C>            <C>
Operating activities:
     Net income for the period                                        $   830,455    $   694,792
     Adjustments to reconcile net income to
                  net cash provided by operating activities:
        Depreciation and amortization                                     672,267        366,405
        Provision for doubtful accounts                                    61,033        204,392
        Notes received for franchise sales                             (1,509,619)    (1,254,854)
        Change in deferred tax asset                                           --         79,134
    Changes in assets and liabilities:
        Accounts and interest receivable                                 (145,299)       (60,211)
        Net change in receivables / payables to related parties          (204,861)       (72,869)
        Inventories                                                       (79,406)        (4,355)
        Prepaid expenses                                                 (312,898)       (21,967)
        Federal income tax receivable                                     301,579             --
        Accounts payable and accrued liabilities                          743,559      1,277,281
        Litigation reserves                                                (3,618)      (605,897)
        Deferred franchise sales revenue                                 (238,481)       (52,469)
        Other                                                               1,341         41,325
                                                                      -----------    -----------
  Net cash provided by operating activities                               116,052        590,707
                                                                      -----------    -----------

Investing activities:
    Collections of notes receivable                                       727,869        348,668
    Purchases of property and equipment                                  (151,203)      (155,289)
    Purchases of franchise rights                                        (450,000)      (210,788)
    Acquisition of other assets                                           (27,573)       (27,273)
    Sale of other assets                                                       --        141,575
    Purchase of marketable securities                                     (10,804)            --
    Sale of marketable securities                                              --        706,820
    Increase (decrease) in unrealized gain on marketable securities            --        (31,726)
    Collections on notes receivable from related parties                   24,919         71,729
                                                                      -----------    -----------
  Net cash provided by investing activities                               113,208        843,716
                                                                      -----------    -----------

Financing activities:
    Purchases of treasury stock                                           (19,341)      (350,755)
    Proceeds from borrowings                                              746,196             --
    Payments on borrowings                                             (1,039,929)      (458,559)
                                                                      -----------    -----------
  Net cash used in financing activities                                  (313,074)      (809,314)
                                                                      -----------    -----------

Net increase (decrease) in cash and cash equivalents                      (83,814)       625,109
Cash and cash equivalents, beginning of period                            556,383        498,199
                                                                      -----------    -----------

Cash and cash equivalents, end of period                              $   472,569    $ 1,123,308
                                                                      ===========    ===========
</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:

         -        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).

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

         -        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).

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

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

         -        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.

         -        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.

         -        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 June 30, 2000 and for the three months and six months
ended June 30, 2000 and June 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 six months ended June 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 August 4, 2000, the
Company had repurchased 527,379 shares at an average purchase price of $2.12. Of
such shares, 7,933 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.



                     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 June 30, 2000
as compared to 1.4 to 1 at December 31, 1999. The Company had working capital of
approximately $720,000 at June 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 June 30, 2000, the Company had cash and cash equivalents of
approximately $473,000, and marketable securities of approximately $892,000.

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 $116,000 was provided by operating activities in the first
six months of 2000, as compared to $591,000 of cash provided by such activities
for the same period in 1999. In 2000, cash was generated primarily by a net
profit of $830,000, depreciation and amortization of $672,000, an increase in
payables and accrued liabilities of $744,000 and a decrease in a tax refund
receivable of $302,000, partially offset by notes received from franchise sales
of $1,510,000, a decrease in deferred franchise sales revenues of $238,000 and
an increase in other current assets net of other current liabilities of
$746,000.

In the first six months of 2000, the Company generated $113,000 in cash from
investing activities primarily from collections on notes receivable of $728,000,
partially offset by the purchase of franchise rights for $450,000 and the
purchase of property and equipment for $151,000. For the same period in 1999,
the Company generated $844,000 in cash from investing activities, primarily from
the sale of marketable securities of $707,000, collections on notes receivable
of $349,000 and the sale of other assets for $142,000, partially offset by
purchases of property and equipment of $155,000 and the purchase of franchise
rights for $211,000.

The Company used $313,000 for financing activities in the first six months of
2000. Payments on borrowings of $1,040,000 and the purchase of treasury stock
for $19,000 was partially offset by proceeds from borrowings of $746,000. In the
first six months of 1999, the Company used $809,000 in cash for financing
activities for payments on borrowings of $459,000 and for purchases of treasury
stock of $351,000.

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 six months ended June 30, 2000, compared to the six months ended June
30, 1999.

Total revenues for the six months increased by $1,536,000 (20%) to $9,172,000 in
2000 from $7,636,000 in 1999. This increase is due to increases in each of the
Company's revenue categories as follows: royalties - $755,000 (17%); franchise
fees - $338,000 (17%); sales of products and services - $309,000 (42%); interest
- $101,000 (44%); and other - $33,000 (13%).

                                       9

<PAGE>   10



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

<TABLE>


<S>                             <C>                  <C>
Mr. Rooter                      $315,000              16%
Mr. Electric                    $177,000              62%
Glass Doctor                    $ 84,000              13%
Mr. Appliance                   $ 45,000              86%
Aire Serv                       $ 30,000              14%
Rainbow                         $ 73,000               6%
</TABLE>

In addition to the above, royalties from the Company's Canadian operations
increased by $31,000 (19%).

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 - $188,000 (53%); Mr. Electric - $136,000 (40%);
Rainbow - $11,000 (7%); Mr. Appliance - $32,000 (50%); and Glass Doctor -
$49,000 (9%). These increases were partially offset by a decrease of $38,000
(9%) in franchise fees generated from Aire Serv due to the sale of two large
territories in 1999 and a decrease of $40,000 (59%) in the sale of franchises in
Canada.

Sales of products and services increased by $309,000 (42%), due to additional
sales made by National Accounts.

Interest income increased by $101,000 (44%) due to an increase in trade notes
receivable related to the sale of franchises.

General and administrative expenses increased by $700,000 (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 $234,000 (38%).

Depreciation and amortization increased by $306,000 (84%) due primarily to
amortization of franchise rights purchased in late 1999 and early 2000.

Interest expense increased by $109,000 (210%) due to additional debt resulting
from the purchase of franchise rights.

The Company reported net income of $830,000 for the six months ended June 30,
2000 as compared to net income of $695,000 for the same period in 1999.

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

Total revenues for the quarter increased by $553,000 (13%) to $4,727,000 in 2000
from $4,174,000 in 1999. This increase is due primarily to an increase of
$318,000 (13%) in royalties, an increase of $176,000 (57%) in sales of products
and services and an increase of $60,000 (59%) in interest income.

Royalty revenues increased for each franchise concept as follows:

<TABLE>


<S>                        <C>                   <C>
Mr. Rooter                 $113,000              11%
Mr Electric                $ 87,000              57%
Glass Doctor               $ 50,000              15%
Aire Serv                  $ 26,000              20%
Mr. Appliance              $ 23,000              83%
Rainbow                    $  2,000              --%
</TABLE>

                                       10
<PAGE>   11


In addition to the above, royalties from the Company's Canadian operations
increased by $17,000 (20%).

Overall, these royalty revenue increases, which coincide with the increase
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.

Franchise sales revenues decreased by $18,000 (2%) from 1999 to 2000. A decrease
of $183,000 (72%) in such revenues from Aire Serv was partially offset by an
increase of $180,000 (72%) in franchise sales revenues associated with Glass
Doctor.

Sales of products and services increased by $176,000 (57%), due to additional
sales made by National Accounts.

Interest income increased by $60,000 (59%) due to an increase in trade notes
receivable related to the sale of new franchises.

General and administrative expenses increased by $154,000 (5%), due to
additional costs and personnel associated with the increase in overall revenues.

Depreciation and amortization increased by $137,000 (70%), due primarily to
amortization of franchise rights purchased in late 1999 and early 2000.

Interest expense increased by $48,000 (217%) due to additional debt resulting
from the purchase of franchise rights.

The Company reported net income of $497,000 for the quarter ended June 30, 2000
as compared to net income of $440,000 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.



                     THIS SECTION LEFT INTENTIONALLY BLANK.


                                       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:  August 4, 2000        The Dwyer Group, Inc.


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


                                       13

<PAGE>   14


                               INDEX TO EXHIBITS

<TABLE>
<CAPTION>

EXHIBIT
NUMBER                   DESCRIPTION
-------                  -----------
<S>                <C>
 27                Financial Data Schedule
</TABLE>