<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                  FORM 10-KSB/A

(Mark One)
(X)      ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
         OF 1934 (FEE REQUIRED) for the fiscal year ended December 31, 2002

( )      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 (NO FEE REQUIRED) for the transition period from
                        to
         --------------    --------------

Commission File No. 0-15227

                              THE DWYER GROUP, INC.
                              ---------------------
                 (Name of small business issuer in its charter)

          Delaware                                            73-0941783
          --------                                            ----------
(State or other jurisdiction of                            (I.R.S. Employer
incorporation or organization)                           Identification Number)


                         1010 N. University Parks Drive
                                Waco, Texas 76707
                                -----------------
              (Address and zip code of principal executive offices)

                                 (254) 745-2400
                                 --------------
                 (Issuer's telephone number including area code)

       Securities registered under Section 12(b) of the Exchange Act: None

         Securities registered under Section 12(g) of the Exchange Act:
                         Common Stock ($.10 par value)

         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 [ ]

         Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]

         Issuer's revenues for its most recent fiscal year:     $25,865,984

         Approximate aggregate market value of the voting stock held by
         nonaffiliates computed by average bid and asked prices of such stock,
         as of March 21, 2003: $29,315,313

         Aggregate number of shares of Common Stock outstanding as of the close
         of business on March 21, 2003: 7,063,931


                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None


    Transitional Small Business Disclosure Format (check one): [ ] Yes [X] No


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         This Amendment No. 1 on Form 10-KSB/A (this "Amendment") is being filed
in order to amend the Registrant's Annual Report on Form 10-KSB for the fiscal
year ended December 31, 2002, filed with the Securities and Exchange Commission
on March 31, 2003 ("Form 10-KSB") to revise information in Part I, Item 1.
Description of Business - Franchise Operations; Part I, Item 3. Legal
Proceedings; Part II, Item 7. Management's Discussion and Analysis - Year Ended
December 31, 2002 Compared to Year Ended December 31, 2001 and Liquidity and
Capital Resources; and Part III, Item 12. Certain Relationships and Related
Party Transactions.

         This Amendment is limited in scope to the portions of the Form 10-KSB
set forth above and does not in any way amend, update or change any other items
or disclosures contained in the Form 10-KSB.


                                     PART I

ITEM 1.   DESCRIPTION OF BUSINESS

GENERAL

         The Dwyer Group, Inc. and its wholly owned subsidiaries (the "Company",
"We", or "Our") provide a diverse array of specialty services internationally
through its service-based, brand-name franchising businesses. We currently own
six such businesses, which service an aggregate of 775 franchisees located in
the United States and Canada, and through their master licensees, nearly 275
franchisees in 15 other countries. We have positioned the Company as a
consolidator of franchising businesses in order to benefit from economies of
scale achievable through the pooling of resources. We believe that franchisees
are attracted to our franchise opportunities because of the depth of our support
services, a commitment to our mission and vision, our brands, our code of values
and the reputation of our management team.

         In 2002 and 2001, we operated our businesses through the following
wholly owned subsidiaries - See "Management's Discussion and Analysis - Results
of Operations":

         o        Mr. Rooter Corporation ("Mr. Rooter") is a franchisor of
                  plumbing repair and drain cleaning services under the service
                  mark "Mr. Rooter"(R). In 2002, Mr. Rooter accounted for
                  approximately 31.1% of our consolidated revenues.

         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). In 2002, Rainbow accounted for
                  approximately 15.0% of our consolidated revenues.

         o        Mr. Electric Corp. ("Mr. Electric") is a franchisor of
                  electrical repair and service businesses under the service
                  mark "Mr. Electric"(R). In 2002, Mr. Electric accounted for
                  approximately 8.8% of our consolidated revenues.

         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.
                  In 2002, Glass Doctor accounted for approximately 16.8% of our
                  consolidated revenues.

         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). In
                  2002, Aire Serv accounted for approximately 6.7% of our
                  consolidated revenues.

         o        Mr. Appliance Corp. ("Mr. Appliance") is a franchisor of major
                  household appliance service and repair businesses under the
                  service mark "Mr. Appliance"(R). In 2002, Mr. Appliance
                  accounted for approximately 2.8% of our consolidated revenues.

         o        The Dwyer Group National Accounts, Inc. ("National Accounts")
                  solicits commercial national account customers who can call a
                  toll-free number for their general repair and 24-hour
                  emergency service needs. The order is filled through our
                  network of franchisees or qualified subcontractors. In 2002,
                  National Accounts accounted for approximately 12.8% of our
                  consolidated revenues.


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         o        The Dwyer Group Canada, Inc. ("TDG Canada") markets and
                  services certain of our franchise concepts in Canada.
                  Currently, those concepts are: Mr. Rooter, Mr. Electric and
                  Rainbow. In 2002, TDG Canada accounted for approximately 2.4%
                  of our consolidated revenues.

         Mr. Rooter, Mr. Electric, Mr. Appliance, Aire Serv, Rainbow and Glass
Doctor are referred to as our "franchise concepts", or "franchising businesses".

         The Company was incorporated in 1970 in the State of Oklahoma under the
name Mr. Rooter Corporation of America, Inc. The name was changed to Mr. Rooter
Corporation in 1972, and in 1986, was reincorporated as a Delaware corporation.
In 1993, the Board of Directors approved a plan to convert the Company into a
holding company and to form a new subsidiary to operate the Mr. Rooter business.
In that same year, this new subsidiary was incorporated in Texas under the name
Mr. Rooter Corporation and the holding company was renamed The Dwyer Group, Inc.

         Our principal executive offices are located at 1010 North University
Parks Drive, Waco, Texas 76707, and our telephone number is (254) 745-2400. All
references herein to the Company include Rainbow, Mr. Rooter, Aire Serv, Mr.
Electric, Mr. Appliance, Glass Doctor, TDG Canada and National Accounts, unless
otherwise indicated.


FRANCHISE OPERATIONS

         Our goal is to build upon our successful system of franchising
businesses, in order to develop strong new franchisees and provide them with
ongoing support.

         The industries in which we operate are fragmented, consisting mainly of
small, independent operators. Our philosophy is own multiple franchise concepts
and bring our franchising expertise to bear on a number of businesses in various
service fields. We apply franchise systems management and marketing skills in
order to maximize the profitability of our franchised businesses. Thus, instead
of franchising only one line of business, our philosophy is to benefit from
economies of scale by the pooling of resources.

         Our primary sources of revenues are initial franchise fees paid by new
franchisees and ongoing royalties based on the sales volume of franchisees.

         For each of our franchise concepts, a prospect's franchised territory
is generally determined based upon that prospect's proposed trade area. It is
desirable to grant franchise rights for the entire county in which the prospect
operates. However, if the population of a county is too large for the
prospective franchisee to service, we will usually grant the prospect franchise
rights for a smaller territory determined on the basis of applicable yellow
pages coverage described by postal zip codes. From time to time existing
franchisees purchase additional territory as they grow and are able to service
larger areas. These additional territories are generally contiguous to the
franchisee's existing territory and are also determined by county or by postal
zip codes tied to yellow pages coverage.

         Initial franchise fees and royalty rates vary for each franchise, and
are described in the following sections related to each concept. In general, we
may, at our discretion, finance up to 80% of the franchise fee and may give a
discount if the franchise fee is paid in full upon the signing of the agreement.

         In addition to royalties, each franchisee is required to contribute to
a national advertising fund maintained by each franchise concept. Expenditures
from each fund are used to develop and place advertising and to create marketing
materials and programs that will benefit all franchisees operating under the
particular franchise concept. Such funds are maintained separately from the
Company's funds and are not reflected on the Company's books.

         In order to encourage business owners to convert their businesses to
one of the our franchise concepts, we maintain a "roll-in" program whereby a new
franchisee can roll-in sales from their existing business and pay reduced
royalty and advertising fee rates on the existing sales for a limited period of
time. The franchisee may also receive a discount on the initial franchise fee
based on the amount of sales "rolled-in".

         As owner of a number of franchising businesses, we believe that our
existing broad base of franchisees, the diversity of services provided by our
current operations, our centralized financial, marketing, training and support
staff, and the adaptability and versatility of our established operating
systems, have positioned us to capitalize on the projected opportunities for
growth in the franchising industry. In addition, we believe that the franchise
sales and operations expertise developed by our management over many years
provides us with a competitive advantage.


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         Each of our franchising businesses requires the franchise owners and/or
key employees to undergo training at our headquarters located in Waco, Texas
prior to beginning operations. The training program differs depending upon the
type of franchise purchased. For example, Rainbow franchisees are taught how to
dye, clean, deodorize and repair carpets, clean upholstery and perform
restoration services. Mr. Rooter, Aire Serv, Mr. Electric, Mr. Appliance, and
Glass Doctor, on the other hand, are primarily "conversion" franchisors, which
recruit existing people operating in the "trades" and teach them an improved
business methodology. All of our franchisees receive extensive instruction with
respect to broad-based marketing techniques, guidelines and methods for hiring
and managing personnel, providing quality customer service and managing the
financial aspects of their businesses, among other things. In addition, our
training program educates each franchisee about the extensive support services
we offer and how to best take advantage of them.

         Following completion of initial training (which represents the
fulfillment of the services required to be provided for revenue recognition),
our franchisees continue to receive a broad range of services and support on an
ongoing basis. Each of our franchising businesses also provide numerous
follow-up training sessions for their franchisees at various locations. In
addition, we employ franchise systems managers on the staff of each of our
franchising businesses whose sole responsibility is to assist franchisees and
provide them with support. A manager contacts each franchisee approximately once
a month (more often when necessary) to discuss marketing techniques and business
development. Furthermore, each franchising business provides its franchisees
with a number of manuals, including an updated Confidential Operations Manual,
which serves as a reference guide for all aspects of their franchise operations.
In 2002, we developed a proprietary business management software system,
designed to help our franchisees manage their businesses. We recently began
offering this system to our franchisees. They pay an unrelated third party
installation and ongoing support. We believe that our proactive support
philosophy with respect to our franchisees is one of our primary distinguishing
features.

         Each of the heads of our franchise subsidiaries receives, in addition
to salary, bonus compensation based on the overall performance of the subsidiary
or subsidiaries for which he is responsible. Thus, the emphasis is on profitable
growth, not just sales.

         Pursuant to foreign master license agreements, we license individuals
and/or other legal entities, which are typically residents of the foreign
country, the rights to use our trademarks and systems and to grant franchise
rights in their defined geographic territory. Foreign franchise rights are sold
based upon the population of the territory, the estimated number of potential
franchises that could be sold in such territory and the relationship of that
foreign territory's gross national product per capita to that of the United
States. In areas other than the United States and Canada, franchises are
generally sold and supported by such "master licensees". Our revenues from these
foreign operations consist of fees charged for the initial sale of a master
license, and a percentage of franchise fees and royalties earned by the master
licensees. Master licensees determine the amount of the franchise fees,
royalties, and advertising fees charged to franchisees in other foreign
countries. They also determine the terms of the franchise agreement and level of
support services.


         The following describes our operations for each franchise concept.
These descriptions apply generally to our operations in the United States and
Canada:

Mr. Rooter

         Mr. Rooter is a franchisor of plumbing repair and drain cleaning
services under the service mark "Mr. Rooter(R)" and related trade and service
marks. In 1989, when we acquired Mr. Rooter, there were 22 Mr. Rooter franchises
in operation. Since that time, Mr. Rooter has shown significant growth in
royalty revenues (from $234,000 in 1989 to $6,117,000 in 2002). By the end of
2002, Mr. Rooter had a total of 200 franchisees in the United States and Canada,
and through master licensees, 70 franchisees in six other countries.

         Mr. Rooter franchisees are required to operate their franchises in
accordance with specified methods, techniques and standards and with specified
equipment, within a designated geographic territory. Franchisees are typically
able to service their territory by establishing one service center within such
territory. Mr. Rooter emphasizes and promotes fast, efficient and high quality
service, seven days a week, using modern equipment to perform residential,
commercial and industrial drain cleaning and plumbing repair.

         A new franchisee pays an initial franchise fee of $225 for each 1,000
of the franchise territory's population, with a minimum initial fee of $22,500.
In general, Mr. Rooter sells its franchises to licensed plumbers. No training is
provided on the technical aspects of operating a plumbing or drain cleaning
business. Instead, Mr. Rooter concentrates its training and support efforts on
marketing, customer service, pricing, profitability, growth of the business and
personnel management. Each franchisee is required to maintain an advertisement
in the Yellow Pages of the telephone directory serving the franchised territory.
Extensive ongoing support emphasizing the development of the franchisee's
marketing and business management skills is provided through training meetings
and toll-free telephone support from Company personnel.


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         In addition to the initial franchise fee, under the terms of Mr.
Rooter's standard franchise agreement, a franchisee pays a weekly royalty which
ranges from 3% to 7% of gross sales, depending on weekly gross sales volume. In
addition to the weekly royalty, the franchisees generally pay an advertising fee
equal to 2% of their gross sales. For "roll-in" business, the franchisee pays a
2% royalty and a 1% advertising fee for the first year of operation. On a yearly
basis, Mr. Rooter sets a maximum National Advertising Fund contribution per
individual franchisee. From time-to-time, in the United States, Mr. Rooter
advertises nationally on network radio and television.

         The term of the initial franchise agreement is ten years, which (for
franchise agreements dated prior to 2000) may be renewed for additional
five-year terms at the option of the franchisee upon certain conditions,
including payment of a $2,500 renewal fee. In 2000, Mr. Rooter changed its
renewal terms for new franchisees to include ten-year renewal periods and a $750
renewal fee. Mr. Rooter may terminate a franchise agreement in the event that a
franchisee breaches the terms of the agreement.


Rainbow

         Rainbow is a franchisor of carpet and upholstery cleaning and dyeing,
air duct cleaning, and restoration service businesses. At December 31, 2002,
Rainbow had 252 franchisees in the United States and Canada, and through master
franchise licensees, 157 franchisees in eight other countries.

         Rainbow offers individual franchises for the operation of a carpet and
upholstery cleaning, dyeing and related services business (such related services
include, but are not limited to, air duct cleaning, problem odor removal, carpet
repair, drapery cleaning and water and smoke damage restoration) for residential
and commercial locations.

         The initial franchise fee is a minimum of $15,900, based on a territory
population of approximately 100,000. The fee is increased by $159 for each
additional 1,000 of population contained in the franchise territory. During the
term of the agreement, the franchisee is generally required to pay Rainbow a
continuing royalty of 3% to 7% of weekly gross sales plus a national advertising
fee of 2% of weekly gross sales. Certain franchisees who pay royalties at the 7%
rate may be eligible to receive a rebate of up to 50% of royalties paid upon
satisfying certain conditions. For "roll-in" business, the franchisee pays a 2%
royalty and a 1% advertising fee for the first year of operation. On a yearly
basis, Rainbow sets a maximum National Advertising Fund contribution per
individual franchisee. The term of the initial franchise agreement is ten years,
with a mutual option to renew and no renewal fee (for franchise agreements dated
prior to 2000). In 2000, Rainbow changed the renewal fee to $750 for new
franchisees. From time-to-time, in the United States, Rainbow advertises
nationally on network television.

         No previous knowledge, experience or skills in the carpet cleaning or
dyeing business is required to purchase a Rainbow franchise. Instead, new
franchisees are thoroughly trained on all aspects of the business under an
operating system that we believe has proven to be successful. Beyond initial
business and technical training, individually assigned franchise systems
managers, through training meetings and toll-free telephone support, provide
extensive ongoing support emphasizing the development of the franchisee's
marketing and business management skills. Ongoing technical training is handled
in the same manner.


Mr. Electric

         Mr. Electric is a franchisor of electrical repair and service
businesses under the service mark "Mr. Electric(R)". At December 31, 2002, Mr.
Electric had 110 franchisees in the United States and Canada, and through master
licensees, 39 franchisees in three other countries.

         The minimum initial franchise fee is $19,500, based on a territory
population of approximately 100,000. The fee is increased by $195 for each
additional 1,000 of population contained in the franchise territory.

         The initial franchise agreement term is ten years. For franchise
agreements dated prior to 2000, an election to renew the contract may be made by
the franchisee for additional five-year periods upon certain conditions and
payment of a $2,500 renewal fee. For agreements dated in 2000 and beyond, the
renewal period is ten years with a $750 renewal fee.

         During the term of the franchise agreement, the franchisee is required
to pay Mr. Electric (i) a royalty fee ranging from 3% to 6% of weekly gross
sales, based on weekly gross sales volume and (ii) an advertising fee equal to
2% of weekly gross sales. For "roll-in" business, the franchisee pays a 2%
royalty and a 1% advertising fee for the first year of operation.


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In addition, franchisees are required to engage in local promotion of the
services and products available, as well as maintain an advertisement in the
Yellow Pages of their local telephone directory.

         Franchisees receive extensive instruction with respect to broad-based
marketing techniques, guidelines and methods for hiring and managing personnel,
providing quality customer service and managing the financial aspects of their
businesses, among other things. They do not receive any technical training from
Mr. Electric. Beyond initial business training, extensive ongoing support,
emphasizing the development of the franchisee's marketing and business
management skills, is provided by individually assigned franchise systems
managers, through training meetings and toll-free telephone support. From
time-to-time, in the United States, Mr. Electric advertises nationally on cable
television networks.


Aire Serv

         Aire Serv is a franchisor of heating, ventilating and air conditioning
service businesses providing installation, maintenance, repair and related
services for residential and commercial heating and air conditioning equipment.
At December 31, 2002, Aire Serv had 63 franchisees in the United States and,
through master licensees, 11 franchisees operating in two other countries.

         The minimum initial franchise fee is $17,500, based on a territory
population of approximately 100,000. The initial franchise fee is increased by
$175 for each additional 1,000 of population contained in the franchise
territory.

         The initial franchise agreement term is ten years. For franchise
agreements dated prior to 2000, an election to renew the contract may be made by
the franchisee for additional five-year periods upon certain conditions and
payment of a $2,500 renewal fee. For agreements dated in 2000 and beyond, the
renewal period is ten years with a $750 renewal fee.

         During the term of the franchise agreement, the franchisee is required
to pay to Aire Serv (i) a continuing royalty fee ranging from 2.5% to 4.5% of
weekly gross sales, based on weekly gross sales volume and (ii) an advertising
fee equal to 2% of the franchisee's weekly gross sales. For "roll-in" business,
the franchisee pays a 2.5% royalty fee and a 2% advertising fee for the first
year of operation. If the amount of existing business "rolled-in" is large
enough, the reduced rate may apply for the life of the franchise agreement. The
franchisee is also required to maintain an advertisement in the Yellow Pages of
their local telephone directory.

         Franchisees receive extensive instruction with respect to broad-based
marketing techniques, guidelines and methods for hiring and managing personnel,
providing quality customer service and managing the financial aspects of their
businesses, among other things. They do not receive any technical training from
Aire Serv. Beyond initial business training, extensive ongoing support,
emphasizing the development of the franchisee's marketing and business
management skills, is provided by individually assigned franchise systems
managers and through regional training meetings and toll-free telephone support.
From time-to-time, in the United States, Aire Serv advertises nationally on
cable television networks.


Mr. Appliance

         Mr. Appliance is a franchisor of major household appliance service and
repair businesses. Mr. Appliance was organized in January of 1996, and at
December 31, 2002, had 50 franchisees, in the United States and one in another
country.

         The minimum initial franchise fee is $15,900, based on a territory
population of approximately 100,000. The initial franchise fee is increased by
$159 for each additional 1,000 of population contained in the franchise
territory.

         The initial franchise agreement term is ten years. For franchise
agreements dated prior to 2000, an election to renew the contract may be made by
the franchisee for additional five-year periods upon certain conditions and
payment of a $2,500 renewal fee. For agreements dated in 2000 and beyond, the
renewal period is ten years with a $750 renewal fee.

         During the term of the franchise agreement, the franchisee is required
to pay to Mr. Appliance (i) a royalty fee ranging from 3% to 6% of weekly gross
sales, based on weekly gross sales volume and (ii) an advertising fee equal to
2% of weekly gross sales. For "roll-in" business, the franchisee pays a 2%
royalty and a 1% advertising fee for the first year of operation. Franchisees
are also required to engage in local promotion of the services and products
available, as well as maintain an advertisement in the Yellow Pages of their
local telephone directory.


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         Franchisees receive extensive instruction with respect to broad-based
marketing techniques, guidelines and methods for hiring and managing personnel,
providing quality customer service and managing the financial aspects of their
businesses, among other things. Beyond initial business training, extensive
ongoing support emphasizing the development of the franchisee's marketing and
business management skills is provided through regional training meetings and
toll-free telephone support.


Glass Doctor

         Glass Doctor is a franchisor of automobile, residential and commercial
glass replacement businesses. We acquired Glass Doctor in July of 1998, and at
December 31, 2002, Glass Doctor had 100 franchisees, all in the United States.

         The minimum initial franchise fee is $19,900, based on a territory
population of 100,000. The fee is increased by $199 for each additional 1,000 of
population in the franchise territory.

         The initial franchise agreement term is ten years. For franchise
agreements dated prior to 2000, an election to renew the contract may be made by
the franchisee for additional five-year periods upon certain conditions and
payment of a $2,500 renewal fee. For agreements dated in 2000 and beyond, the
renewal period is ten years with a $750 renewal fee.

         During the term of the franchise agreement, the franchisee is required
to pay (i) a royalty fee ranging from 3% to 6% of weekly gross sales, based on
weekly gross sales volume and (ii) an advertising fee equal to 2% of weekly
gross sales. For "roll-in" business, the franchisee pays a 2% royalty and a 1%
advertising fee for the first year of operation. Franchisees are also required
to engage in local promotion of their services and to maintain an advertisement
in the Yellow Pages of their local telephone directory.

          Each new franchisee is given initial business training and is taught a
system for doing business. They receive extensive instruction with respect to
broad-based marketing techniques, guidelines and methods for hiring and managing
personnel, providing quality customer service and managing the financial aspects
of their businesses, among other things. They do not receive any technical
training from Glass Doctor. All franchisees receive extensive ongoing support
emphasizing development of marketing and business management skills through
training meetings and toll-free telephone. From time-to-time, Glass Doctor
advertises nationally on network television.


NATIONAL ACCOUNTS

         National Accounts operates under the name 1-888HANDLED, which is the
toll-free number used by its customers who call for general repair and 24-hour
emergency service. Orders are dispatched to and filled through our network of
franchisees or third party qualified subcontractors if a franchisee is not
available to do a particular job. 1-888HANDLED focuses on the growth and success
of the Company's individual franchisees by serving large nationwide business
chains that have need for the various services the franchisees provide. Target
customers include large retail chain store companies, casualty insurance
companies and agents, and others with a potential for consistent, repeat
business.

         When each job is completed, National Accounts bills the customer and
pays the franchisee or subcontractor for their service. Each job is "marked-up"
to cover administrative costs. The major focus of National Accounts is to
provide additional business to our franchisees, which they may not be able to
secure acting independently.


MARKETING

         Mr. Rooter considers the market for the drain cleaning and plumbing
industry to be extensive. It is composed of residential, commercial, industrial
and municipal markets. Mr. Rooter's marketing strategy and efforts are directed
toward the sale of franchised operations in all major population areas. The
franchisees follow specific marketing guidelines provided by Mr. Rooter during
their franchise training sessions and as an ongoing service. These marketing
techniques help the franchisee capture a larger market share, which in turn
provides a more consistent stream of revenue. International expansion has been
targeted through the sale of additional master licenses in selected foreign
countries.

         Rainbow's marketing strategy for franchise sales is based on the sale
of individual franchise territories to business-minded individuals. The primary
lead sources are referrals, print advertising and franchise trade shows.
Recently, contractors have also been targeted because of Rainbow's new emphasis
on fire, smoke and water restoration services. International expansion has been
targeted through the sale of additional master licenses in selected foreign
countries.


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Rainbow has also recently begun a program to market franchises to carpet
retailers and plumbing contractors. The market for Rainbow's carpet cleaning,
dyeing and water and fire restoration services extends through the residential,
commercial, industrial and municipal markets.

         Mr. Electric's marketing strategy is focused on the sale of franchises
to existing electrical contractors and electricians. We believe that Mr.
Electric's targeted approach supplies a proven system to make an electrical
service and repair business successful. Franchisees receive extensive training
in sales, marketing and business systems that helps them to achieve a greater
market share and increase their gross sales and profits. Mr. Electric is the
only brand name with national recognition in the residential electrical service
and repair industry.

         Aire Serv's marketing strategy is focused on the sale of franchises to
existing heating and air conditioning contractors. We believe that the heating,
ventilating and air conditioning ("HVAC") market is extensive. The Aire Serv
franchisee, equipped with marketing techniques, guidelines and industry
expertise provided by Aire Serv, targets the residential and light commercial
segments of the HVAC market. Aire Serv provides its franchisees with the
critical tools necessary to achieve success as a retailing contractor and works
with the franchisees to implement and execute effective strategies and systems
in these areas.

         Mr. Appliance's marketing strategy is to sell franchises to existing
appliance dealers and repair businesses. Mr. Appliance provides a proven system,
technical and management support, and training to help make an appliance repair
and service franchise successful. Franchisees receive extensive training in
sales, marketing and business systems.

         Glass Doctor's marketing strategy is to sell franchises to existing
glass installation and/or replacement business owners. Glass Doctor provides an
operating system, technical and management support, and training to help make
such businesses more successful. Franchisees receive extensive training in
sales, marketing and business systems.

         National Accounts marketing strategy for the sale of facilities
maintenance services is focused on the retail merchandising, insurance, and
property management industries. Lead sources include trade associations,
referrals, the Internet, and trade shows. We believe that the facilities
maintenance industry is extensive, with the potential need for the services
provided by each franchise concept. Due to the intense training franchisees
receive, we can offer the facilities maintenance industry consistent quality for
a variety of services through one organization. Because of the strengths, and
the scope of services offered, we believe that National Accounts has a marketing
advantage in developing corporate customers that the franchisees are not able to
develop on the local level. Services offered through the National Accounts are
corrective and preventative maintenance for plumbing, electrical, heating,
ventilating and air conditioning (HVAC), glass replacement and installation,
carpet care and restoration, and appliance repair. The call center is operated
24 hours per day, 7 days per week and provides facilities maintenance solutions
for both regular and emergency services.


COMPETITION

         Our markets and those of our franchisees are highly competitive. We
compete directly with other regional and national franchisors that are also
seeking to sell their franchises or business opportunities to prospective
franchisees or investors. Our franchisees generally compete on the basis of
price, training and support services and reputation.

         Mr. Rooter franchisees compete principally with Roto-Rooter, Inc., a
nationally recognized provider of sewer and drain cleaning services in the
United States, as well as numerous plumbers, small drain cleaning firms and
regional and local firms in other segments of the market, such as septic tank
pumping and hydrojet cleaning. We believe that Mr. Rooter is distinguished from
its primary competition because our franchisees concentrate on providing
plumbing repair while most competitors focus on providing either drain and sewer
cleaning or plumbing services.

         The principal competitors of Rainbow's franchisees are Stanley Steemer
International, Inc., Duraclean International, Inc., Harris Research, Inc.,
Steamatic, Inc., Serv-Pro Industries, Inc. and ServiceMaster Co., all of which
operate on a national basis, as well as independent carpet cleaning and
restoration companies.

         Mr. Electric is the first company to offer franchises in the
residential and light commercial electrical service industry. Local electricians
are Mr. Electric's primary source of competition.

         Local or regional HVAC contractors are Aire Serv's primary source of
competition and, to a lesser extent, national home improvement retailers provide
competition in some markets.


                                       8
<PAGE>

         Mr. Appliance is the first company to offer franchises in the
fragmented appliance repair and service industry. Local appliance repair
businesses are Mr. Appliance's primary competition.

         Glass Doctor competes with local and regional glass replacement
companies as well as large glass manufacturers such as Safelite and other glass
replacement services such as Harmon AutoGlass, Binswanger and Diamond Triumph,
who operate on a national basis.

         The demand for National Accounts facilities maintenance solutions is
extensive. Customers are looking to service providers for more complete
solutions, which makes National Accounts a strong contender in the marketplace.
Competition consists primarily of other third party service providers such as
Total Facility, Primo Services, Best Retail Solutions, and Chain Store
Maintenance Inc. The industry generally competes on the basis of services
offered, price, and value added services, such as customer service follow-up,
reporting capabilities, and the ability to adapt to customers needs. We believe
that our service is distinguished from that of our competition due to our
extensive network of highly skilled service professionals associated with our
franchisees.

         In addition, we expect to encounter competition in attempting to
acquire franchise companies. Potential competitors, many of which are well
established and have extensive experience in connection with identifying and
effecting business acquisitions, may include other franchise companies,
leveraged acquisition partnerships (leveraged buy-out funds), business
development companies, investment partnerships and corporations (including
venture capital entities), small business investment companies, large industrial
and financial companies seeking acquisitions directly or through affiliates, and
wealthy individuals. These competitors may have greater financial resources than
we have access to and may be in a better position to take advantage of these
opportunities. In the event that we succeed in effecting acquisitions, we will,
in all likelihood, become subject to intense competition from competitors of the
acquired business. The degree of competition characterizing the industry of any
prospective acquisition candidate cannot be presently ascertained.


TRADE NAMES AND SERVICE MARKS

         We believe that our trademarks and service marks are important to the
marketing of the franchises and the sale of services to consumers by the
franchisees. We currently hold the following federally registered trademarks and
service marks: THE DWYER GROUP(R), PROVIDING A WORLD OF SPECIALITY SERVICES(R),
and TOP GUN(R).

         Our subsidiaries currently hold the following federally registered
trademarks and service marks: MR. ROOTER(R), MR. ROOTER (STYLIZED), MR. WINKIE
DEVICE, QUICK-AS-A-WINK(R), BIOCHOICEES(R), AMERICA'S TROUBLE SHOOTER(R), VAN
STRIPE DESIGN FOR MR. ROOTER, HYDROSCRUB(R); AIRE SERV(R), AIRE SERV (STYLIZED),
VAN STRIPE DESIGN FOR AIRE SERV, AMERICA'S COMFORT COMPANY(R), YOUR COMFORT
COMPANY(R), YOUR COMFORT COMPANY (STYLIZED); MR. ELECTRIC(R), MR. ELECTRIC TAG
LINE & DEVICE, VAN STRIPE DESIGN FOR MR. ELECTRIC, WE'VE GOT THE POWER TO MAKE
THINGS BETTER(R); RAINBOW INTERNATIONAL(R), RAINBOW INTERNATIONAL CARPET CARE
AND RESTORATION SPECIALIST TAG LINE & DEVICE, VAN STRIPE DESIGN FOR RAINBOW,
RAINBOW INTERNATIONAL CARPET DYEING & CLEANING(R); MR. APPLIANCE(R), MR.
APPLIANCE (STYLIZED), VAN STRIPE DESIGN FOR MR. APPLIANCE; GLASS DOCTOR(R),
GLASS DOCTOR DEVICE, WE FIX YOUR PAINES(R), GLASS DOCTOR (STYLIZED), RUNNING
DOCTOR DEVICE; REFLECTIONS(R), GLASS NOW(R); 1-888-HANDLED(R), HANDLE THE JOB
WITH ONE CALL(R), 1-888HANDLED TAG LINE & DEVICE.

         We hold numerous foreign trademarks and service marks related to the
franchising concepts, including DRAIN DOCTOR in the United Kingdom and certain
other foreign countries. In addition, Rainbow International Carpet Dyeing &
Cleaning Company holds a copyright in connection with training material.

         We have applied for federal registration and service mark registration
on the following: PROVIDING YOU A WORLD OF SPECIALTY SERVICES(TM), @ YOUR
SERVICE(TM); NO ORDINARY PLUMBER(TM); COMFORT PROTECTION PLAN(TM), WE TREAT YOUR
HOME LIKE IT'S OUR OWN(TM), MEMBER PLUS PLAN(TM), SUN & SNOW FLAKE DESIGN;
RAINBOW SPIRAL GLOBE DEVICE and RAINBOW INTERNATIONAL(TM).

         Our subsidiaries hold a service mark registration for RAINBOW
INTERNATIONAL CARPET DYEING AND CLEANING COMPANY AND GLOBE DEVICE in sixteen
states, a state service registration for RAINBOW INTERNATIONAL CARPET DYEING AND
CLEANING in Arizona, and state service registrations for AIRE SERV & DEVICE and
AIRE SERV in California.


                                       9
<PAGE>

         There can be no assurance that the marks do not or will not violate the
proprietary rights of others, that the marks would be upheld if challenged, or
that we would not be prevented from using the marks. Any limitations on the use
of the trade names or service marks and the ability of franchisees to use such
marks could have an adverse effect on our operations.


REGULATION

         The offer and sale of franchises is subject to extensive federal and
state laws and substantial regulation under such laws by government agencies,
including the Federal Trade Commission (the "FTC") and various state
authorities. Pursuant to FTC regulations, we are required to furnish prospective
franchisees with a current franchise offering disclosure document containing
information prescribed by the FTC. We use Uniform Franchise Offering Circulars
to satisfy this disclosure obligation. In addition, in certain states, the
Company is required to register or file with such states and to provide
prescribed disclosure documents.

         We are required to update our offering disclosure documents to reflect
the occurrence of material events. The occurrence of any such events may from
time-to-time require us to cease offering and selling franchises until the
affected disclosure documents are updated. There can be no assurance that we
will be able to update our disclosure documents (or in the case of any newly
acquired franchising business, prepare an adequate disclosure document) or
become registered in certain states in a time frame consistent with our
expansion plans, continue offering and selling franchises or comply with
existing or future franchise regulations in any particular state. The failure to
take any of these actions could have an adverse effect on the Company.

         We are also subject to a number of state laws that regulate certain
substantive aspects of the franchisor-franchisee relationship, such as
termination, cancellation or non-renewal of a franchise (including requirements
that "good cause" exist as a basis for such termination and that a franchisee be
given advance notice of, and a right to cure a default prior to termination) and
may require the franchisor to deal with its franchisees in good faith, prohibit
interference with the right of free association among franchisees, and regulate
discrimination among franchisees in charges, royalties or fees. If we are unable
to comply with the franchise laws, rules and regulations of a particular state
relating to offers and sales of franchises, we will generally be unable to
engage in offering or selling franchises in or from such state. Amendments to
existing statutes and regulations, adoption of new statutes and regulations and
our expansion into new states and foreign jurisdictions could require us to
continually alter methods of operations at costs which could be substantial.

         In addition, we offer and sell franchises in Canada. In addition to
various provincial laws that govern the franchisor-franchisee relationship, the
Canadian provinces of Alberta and Ontario have specific franchise laws
concerning pre-sale disclosure and other substantive aspects of the
franchisor-franchisee relationship, such as termination, cancellation or
non-renewal of a franchise.

EMPLOYEES

         As of December 31, 2002, the Company had 125 full-time employees and 13
part-time employees (none belonging to unions) as detailed below:

<Table>
<Caption>
                                                  Full-time         Part-time         Total
                                                  ---------         ---------         -----
<S>                                               <C>               <C>               <C>
                  Corporate..........................52................. 9..............61
                  Mr. Rooter.........................16................. 0..............16
                  Aire Serv.......................... 8................. 0.............. 8
                  Rainbow............................15................. 0..............15
                  Mr. Electric.......................10................. 0..............10
                  Glass Doctor.......................11................. 1..............12
                  Mr. Appliance...................... 6................. 0.............. 6
                  National Accounts.................. 7................. 3..............10

                  Total.............................125................ 13.............138
</Table>


                                       10
<PAGE>

ITEM 3.   LEGAL PROCEEDINGS

         We are engaged in various routine pending legal proceedings incidental
to our normal business activities. We do not believe that the resolution of
these proceedings will have a material impact on our operations, liquidity or
cash flow.


                                       11
<PAGE>

                                     PART II


ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS

         Unless otherwise noted, all dollar amounts are rounded to the nearest
thousand and percentages represent the change from the comparable amount from
the previous year. References to 2002 and 2001 are to the years ended December
31 of each year. Note references refer to Notes to Consolidated Financial
Statements.

RESULTS OF OPERATIONS

         The following table shows the approximate amount (in thousands) and
percentage of the total, of revenues and income (loss) before income taxes of
each of our operating subsidiaries and the parent holding company:

<Table>
<Caption>
                                                             YEAR ENDED DECEMBER 31,
                                         -------------------------------------------------------------
                                                    2002                               2001
                                         ---------------------------       ---------------------------
<S>                                      <C>              <C>              <C>              <C>
REVENUES:
Mr. Rooter                               $    8,047             31.1%      $    7,134             31.9%
Rainbow                                       3,892             15.0            3,387             15.1
Glass Doctor                                  4,340             16.8            3,189             14.3
Mr. Electric                                  2,282              8.8            2,020              9.0
Aire Serv                                     1,733              6.7            1,367              6.1
Mr. Appliance                                   715              2.8              371              1.7
National Accounts                             3,298             12.8            3,311             14.8
TDG Canada                                      624              2.4              674              3.0
Other (1)                                       935              3.6              912              4.1
                                         ----------       ----------       ----------       ----------
                                         $   25,866            100.0%      $   22,365            100.0%
                                         ==========       ==========       ==========       ==========


INCOME (LOSS) BEFORE INCOME TAXES:
Mr. Rooter                               $    3,215             69.4%      $    2,651             77.3%
Rainbow                                         833             18.0              794             23.2
Glass Doctor                                    978             21.1              578             16.9
Mr. Electric                                     41               .9              148              4.3
Aire Serv                                       (29)             (.6)            (123)            (3.6)
Mr. Appliance                                  (157)            (3.4)            (321)            (9.4)
National Accounts                               (14)             (.3)              25               .7
TDG Canada                                      264              5.7              199              5.8
Other (1)                                      (502)           (10.8)            (522)           (15.2)
                                         ----------       ----------       ----------       ----------
                                         $    4,629            100.0%      $    3,429            100.0%
                                         ==========       ==========       ==========       ==========
</Table>

----------

(1)      Includes revenues or income (loss) before income taxes of The Dwyer
         Group, Inc. (parent holding company) which maintains all corporate
         activities and functions (executive, accounting, legal, data processing
         and administration). Revenues are derived primarily from administrative
         fees charged to related parties. A portion of general and
         administrative expenses are allocated to subsidiary companies.

YEAR ENDED DECEMBER 31, 2002, COMPARED TO YEAR ENDED DECEMBER 31, 2001:

         We recorded net income of $2,946,000 or $.40 per diluted share for
2002, as compared to net income of $2,338,000, or $.33 per share for 2001.

         Revenues

         Total revenues for 2002 were $25,866,000, an increase of $3,501,000 or
16%, from $22,365,000 for 2001. Each component increased as follows: royalties -
$1,530,000 (11.9%); franchise fees - $1,739,000 (38.2%); sales of products and


                                       12
<PAGE>

services - $176,000 (5.2%); interest - $74,000 (9.8%); and other revenues -
$94,000 (14.7%). Revenues in 2001 included a gain on sale of securities of
$112,000.

         Royalty revenues increased by 11.9% to $14,442,000 in 2002 from
$12,892,000 in 2001. Royalties from each franchise concept increased as follows:
Mr. Rooter - $667,000 (12.2%); Rainbow - $177,000 (6.5%); Mr. Electric -
$126,000 (11.4%); Glass Doctor - $287,000 (13.3%); Aire Serv - $88,000 (12.6%);
and Mr. Appliance - $67,000 (33.0%). Royalties from Canadian and certain other
foreign operations also increased by $118,000 (21.4%). Royalty revenues are
based on a percentage of retail sales generated by our franchisees, and
generally will increase as our existing franchisees' revenues increase, and as
new franchisees commence operations. We attribute the increased royalty revenues
in 2002 to our emphasis on retaining new franchisees, as well as to our
continued commitment to provide extensive support services to our existing
franchisees. We believe that our existing franchisees realized greater revenues
in 2002 as the result of our skills training programs, marketing and managerial
consultation services, and operational manuals, each of which is discussed in
greater detail on page 2. These strategies are very important to our future, as
royalties are the foundation of our long-term financial strength.

         Franchise sales revenues represent the initial franchise fees paid by
franchisees as well as fees charged for foreign master licenses. These revenues
increased to $6,296,000 in 2002 from $4,557,000 in 2001. Increases were recorded
by Glass Doctor - $643,000 (76.7%); Rainbow - $324,000 (57.3%); Aire Serv -
$269,000 (43.8%); Mr. Appliance - $267,000 (184%); Mr. Rooter - $230,000
(17.1%); and Mr. Electric - $104,000 (12.6%). The above increases were partially
offset by a decrease in franchise sales revenues from Canadian and other foreign
operations of $99,000 (45.6%).

         Revenues from sales of products and services increased by $176,000
(5.2%) due to increased volume generated by National Accounts.

         Interest revenues increased by $74,000 (9.8%) primarily due to notes
from new franchise sales.

         Costs and Expenses

         During 2002, general, administrative and selling expenses increased by
$2,230,000 (15.7%) as compared to 2001. This increase was generally a result of
additional costs and personnel associated with the increase in overall revenues.
During 2001 and 2002, our number of employees increased by 18. This fact, along
with customary pay increases, resulted in an increase of approximately $950,000
in salaries, bonuses, payroll taxes and benefits. Franchise sales commissions
increased by approximately $346,000 due to our increased franchise fee revenues
realized in 2002. Bad debt expense increased by approximately $518,000 due to an
increase in the aggregate amount of indebtedness represented by notes and
accounts receivable, and due to an increase in payment delinquencies. The
remainder of the overall increase in general, administrative and selling
expenses was generally due to expenses associated with the additional personnel.

         The cost of products and service sales increased by $147,000 (5.2%), in
proportion to the increase in product sales.

         Depreciation and amortization expense decreased by $111,000 (7.6%) due
primarily to a change in accounting rules associated with amortization of
goodwill, partially offset by increased depreciation expense on facilities
purchased in April 2001.

         Interest expense increased by $35,000 (8.0%) due to additional debt
resulting from the purchase of property, partially offset by a reduction in
existing debt as described in Note 9.

         A tax benefit of $142,000 was recorded in 2001 as a result of a tax
credit applied to prior years. A reconciliation of income tax expense at the
federal statutory rate to income tax expense is found in Note 7.

LIQUIDITY AND CAPITAL RESOURCES

         At December 31, 2002, our working capital ratio was 1.6 to 1 compared
to 1.5 to 1 at the end of 2001. We had working capital of $2,713,000 at the end
of 2002, as compared to $2,043,000 at the end of 2001. At December 31, 2002, we
had cash and cash equivalents of approximately $1,486,000 and marketable
securities of approximately $572,000.

         We maintain a $1,000,000 line of credit with our bank to be used for
temporary cash needs. Of this amount, $650,000 was available at December 31,
2002. The line expires in May 2003. We expect the line to be renewed at similar
terms for an additional year prior to its expiration.


                                       13
<PAGE>

         In 2001, we purchased our principal executive and administrative
facilities (land, buildings and equipment) from our Chair of the Board and
majority stockholder, Ms. Theresa Dwyer, for a purchase price of approximately
$3.7 million, which equaled the appraised value of the facilities. In accordance
with generally accepted accounting principles, the transaction was recorded at
Ms. Dwyer's basis in the facilities, approximately $2.8 million, with the
difference between the purchase price and basis (approximately $900,000) being
reflected as a reduction in stockholders' equity. We financed approximately $2.9
million of the purchase price using a bank loan collateralized by the purchased
facilities, and paid Mrs. Dwyer approximately $3.7 million in cash. At closing,
Ms. Dwyer used a portion of the monies received in the sale of the facilities to
repay approximately $2.2 million of related-party debt due to us from entities
controlled by Ms. Dwyer. These transactions are more fully explained beneath the
caption "Certain Relationships and Related Party Transactions," below. After
completion of these transactions, our cash position had improved by
approximately $1.5 million. We used this cash for improvements to the property,
payment of existing debt, and for additional working capital.

         In December 2002, we purchased a house and vacant property adjacent to
our principal executive and administrative facilities from a related party for
approximately $332,000, which equaled the appraised value of the assets. In
accordance with generally accepted accounting principles, the transaction was
recorded at the related party's basis of approximately $75,000, with the
difference being reflected as a reduction in stockholders' equity. This entire
purchase was funded through the forgiveness of related party debt.

         We believe that our cash flow, supplemented by our positive cash
position and available line of credit, will be adequate to fund our capital
requirements over the next year.

         Cash in the amount of $492,000 was provided by operating activities in
2002 as compared to $1,007,000 in 2001. In 2002, cash was generated primarily by
net income of $2,946,000, depreciation and amortization of $1,350,000, a change
in the reserve for doubtful accounts of $1,178,000 (which approximates bad debt
expense on notes receivable), an increase in accounts payable and accrued
liabilities of $418,000, and an increase in accrued interest payable of
$180,000. These amounts were partially offset by notes received from franchise
sales of $4,207,000, an increase in notes received other than for franchise
sales of $914,000, and an increase of $184,000 in the deferred tax asset. In
2001, cash was generated primarily by a net profit of $2,338,000, depreciation
and amortization of $1,461,000, a change in the reserve for doubtful accounts of
$480,000 (which approximates bad debt expense on notes receivable), a decrease
in accounts and interest receivable of $249,000, and a decrease in a tax refund
receivable of $322,000. These increases were partially offset by notes received
from franchise sales of $2,145,000, an increase in payables and accrued
liabilities of $523,000, an increase in prepaid expenses of $159,000, and a
decrease in deferred franchise sales revenue of $161,000.

         In 2002, cash in the amount of $1,024,000 was provided by investing
activities. Cash was primarily generated by collections on notes receivable of
$2,142,000. This amount was more partially offset by purchases of property and
equipment for $1,012,000 and the purchase of franchise rights and other assets
for $129,000. In 2001, cash in the amount of $538,000 was used in investing
activities. Cash was primarily generated by collections on notes receivable of
$3,624,000 (of which $1,917,000 was from related parties), and $159,000 from the
sale of marketable securities. Such amounts were more than offset by purchases
of property, plant and equipment for $3,965,000 and the purchase of other assets
for $292,000.

         In 2002, cash in the amount of $820,000 was used in financing
activities. Payments on borrowings of $1,446,000 were partially offset by
borrowings of $510,000 and proceeds from the exercise of stock options of
$116,000. In 2001, cash in the amount of $174,000 was provided by financing
activities. Cash was generated from borrowings of $2,853,000, which was
partially offset by payments on borrowings of $2,679,000.

         In 1993, we entered into a Franchise Financing Agreement with Stephens
Franchise Financing, which is now SunTrust Credit Corporation ("SunTrust"),
pursuant to which SunTrust agreed to extend credit to qualified Mr. Rooter and
Aire Serv franchisees up to an aggregate amount of $10 million. As of December
31, 2002, the aggregate principal amount of outstanding franchisee indebtedness
under such agreement was approximately $11,000. A reserve of $1,000 has been
established to cover any contingent liability under the agreement. Under the
terms of the agreement, we guarantee such franchisee indebtedness in the event a
default occurs and we have 180 days to correct the default. If the default is
not corrected within such time, we are obligated to make the monthly
installments on the note until paid in full or the franchise is sold to another
approved party and the debt is assumed by that party. Approximately $35,000 and
$78,000 was paid to SunTrust during 2002 and 2001, respectively, representing
monthly installments on behalf of franchisees in default. We establish
appropriate reserves based on the payment history of the franchisees. In 1998,
management discontinued the practice of guaranteeing franchise notes to third
parties.

         In 1996, The Dwyer Group, Inc., Mr. Rooter, Aire Serv, Mr. Appliance,
and Mr. Electric entered into an agreement with Phoenix Leasing Incorporated
("Phoenix") to finance franchise sales for franchise applicants who met


                                       14
<PAGE>
Phoenix's qualifications. Phoenix agreed to provide up to $3 million in debt
financing to the franchisees provided that we guarantee each franchisee's
obligations to Phoenix. We receive from Phoenix an Aging Report of the amounts
due and owing by the franchisees. If an Aging Report shows that any franchisee
has failed to make all of the scheduled monthly payments due during any sixty
day period, then we, within ten days of delivery of such Aging Report, shall pay
all of such franchisee's delinquent scheduled payments, together with all late
charges then due. We paid approximately $84,000 and $60,000 on such delinquent
notes in 2002 and 2001, respectively. At December 31, 2002, the aggregate
principal amount of outstanding franchisee indebtedness under the agreement was
approximately $48,000. A reserve of $38,000 has been established to cover any
contingent liability under the agreement.

         In connection with our franchising activities, we regularly extend
credit to prospective franchisees to finance their purchase of franchises. Such
credit is issued in the form of notes with repayment terms generally consisting
of a five- to seven-year term with an interest rate ranging from 6 to 12%. The
average interest rate applied to such outstanding credit amounts at December 31,
2002 was 10.6%. The assets of such franchises, including the franchise rights
sold to the franchisees, secure the repayment of such indebtedness. We recognize
franchise sales revenues for the entire sale if the franchisee has made a down
payment in cash of at least 20% of the sales price and has completed training.
We also recognize franchise sales revenues from existing franchisees buying
additional territory who make a cash down payment of less than 20% but who have
an established history of good credit. At December 31, 2002 and 2001, notes
receivable (in excess of those recognized as deferred liabilities), less
allowance for doubtful collections, were approximately $8,710,000 and
$6,733,000, respectively. Our allowance for doubtful notes was $1,728,000 and
$1,176,000 for 2002 and 2001 respectively, which we believe is adequate for the
size and nature of our notes receivable.

         We are not aware of any trend or event that would potentially adversely
affect our liquidity. In the event such a trend would develop, we believe that
we have sufficient funds available to satisfy the working capital needs of the
business.

FLUCTUATIONS IN OPERATING RESULTS; SEASONALITY

         Our operating results could vary significantly from period to period as
a result of a variety of factors, including the timing of acquisitions and/or
dispositions; the length of our franchise sales cycles; the ability of
franchisees to collect their receivables and satisfy obligations under our
franchise agreements; seasonal conditions in the markets in which our
franchisees operate, and competitive factors. For instance, Rainbow's revenues
have historically decreased during cold weather months and increased during hot
weather months. There can be no assurance that such factors will not result in
significant fluctuations in our operating results in the future.

INFLATION

         Inflation has not historically had a material effect on our operations
and is not expected to have a material impact on us in the future.

INCOME TAXES

         We establish valuation allowances when necessary, to be applied against
our deferred tax asset in accordance with the provisions of SFAS 109,
"Accounting for Income Taxes". At December 31, 2002, no such allowance was
recorded. We continually review the need for a valuation allowance and we
recognize benefits only as reassessment indicates that it is more likely than
not that the benefits will be realized.

         We expect to realize the net deferred asset principally through the
implementation of reasonable tax strategies based on future income projections.

UNCERTAINTY OF FORWARD-LOOKING STATEMENTS

         This Annual Report contains "forward-looking statements" within the
meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act. All statements other than statements of historical fact included in the
Annual Report, including without limitation, "Management's Discussion and
Analysis of Financial Condition and Results of Operations" regarding the
Company's financial position, business strategy and plans and objectives for
future performance are forward-looking statements. Forward-looking statements
are commonly identified by the use of such terms and phrases as "intends",
"estimates", "expects", "projects", "anticipates", "foreseeable future",
"seeks", and words or phases of similar import. Such statements are subject to
certain risks, uncertainties or assumptions. Should one or more of these risks
or uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those anticipated, estimated or
projected.


                                       15
<PAGE>

FOREIGN OPERATIONS

         We operate in 16 foreign countries. Typically, other than in Canada,
foreign franchises are sold and managed by a master licensee in that country.
Royalties from master licenses are generally recorded as revenues when received,
due to the difficulty sometimes experienced in foreign countries when attempting
to transfer such funds to the United States. We do not depend on foreign
operations, and such operations do not have a material impact on our cash flow.
However, we may sell additional master licenses, which could result in lump sum
payments from new master licensees.

ACCOUNTING MATTERS

         In August 2001, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 143, Accounting for Asset
Retirement Obligations (SFAS 143). This statement requires that the fair value
for an asset retirement obligation be recognized in the period in which it is
incurred, if a reasonable estimate of fair value can be made, and that the
carrying amount of the asset, including capitalized asset retirement costs, be
tested for impairment. SFAS 143 is effective for fiscal years beginning after
June 15, 2002. Adoption of this standard will not have any immediate effect on
our consolidated financial statements.

         In April 2002, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 145, Rescission of Statement of
Financial Accounting Standards No. 4, 44, and 64, Amendment of Statement of
Financial Accounting Standards No. 13, and Technical Corrections (SFAS 145).
This statement eliminates the current requirement that gains and losses on debt
extinguishment must be classified as extraordinary items in the income
statement. Instead, such gains and losses will be classified as extraordinary
items only if they are deemed to be unusual and infrequent, in accordance with
the current GAAP criteria for extraordinary classification. In addition, SFAS
145 eliminates an inconsistency in lease accounting by requiring that
modifications of capital leases that result in reclassification as operating
leases be accounted for consistent with sale-leaseback accounting rules. The
statement also contains other nonsubstantive corrections to authoritative
accounting literature. The changes related to debt extinguishment are effective
for fiscal years beginning after May 15, 2002, and the changes related to lease
accounting are effective for transactions occurring after May 15, 2002. Adoption
of this standard will not have any immediate effect on our consolidated
financial statements. We will apply this guidance prospectively.

         In June 2002, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 146, Accounting for Costs Associated with
Exit or Disposal Activities (SFAS 146), which addresses accounting for
restructuring and similar costs. SFAS No. 146 supersedes previous accounting
guidance, principally Emerging Issues Task Force (EITF) Issue No. 94-3. We will
adopt the provisions of SFAS 146 for restructuring activities initiated after
December 31, 2002. SFAS 146 requires that the liability for costs associated
with an exit or disposal activity be recognized when the liability is incurred.
Under EITF No. 94-3, a liability for an exit cost was recognized at the date of
a company's commitment to an exit plan. SFAS 146 also establishes that the
liability should initially be measured and recorded at fair value. Accordingly,
SFAS 146 may affect the timing of recognizing future restructuring costs as well
as the amount recognized. Adoption of this standard will not have any immediate
effect on our consolidated financial statements.

         In November 2002, the Financial Accounting Standards Board issued
Interpretation No. 45, Guarantor's Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness to Others, which
disclosures are effective for financial statements issued after December 15,
2002. Information on our guarantees, including amounts paid on guarantees and
outstanding balances is, detailed in Note 10.

         In December 2002, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards 148, Accounting for Stock-Based
Compensation - Transition and Disclosure (SFAS 148), which amended Statement of
Financial Accounting Standards 123, Accounting for Stock-Based Compensation
(SFAS 123). The new standard provides alternative methods of transition for a
voluntary change to the fair value based method of accounting for stock-based
employee compensation. Additionally, the statement amends the disclosure
requirements of SFAS 123 to require prominent disclosures in the annual and
interim financial statements about the method of accounting for stock-based
employee compensation and the effect of the method used on reported results. The
statement is effective for financial statements with fiscal years ending after
December 15, 2002. In compliance with SFAS 148, we have elected to continue to
follow the intrinsic value method in accounting for our stock-based employee
compensation arrangement as defined by Accounting Principles Board Opinion No.
25, Accounting for Stock Issued to Employees, and have made the applicable
disclosures in Note 2.

         In January 2003, the Financial Accounting Standards Board issued FASB
Interpretation No. 46, Consolidation of Variable Interest Entities, an
interpretation of Accounting Research Bulletin No. 51, Consolidated Financial
Statements


                                       16
<PAGE>

(FIN No. 46). FIN No. 46 explains how to identify variable interest entities and
how an enterprise assesses its interests in a variable interest entity, to
decide whether to consolidate that entity. The Interpretation requires existing
unconsolidated variable interest entities to be consolidated by their primary
beneficiaries if the entities do not effectively disperse risks among parties
involved. FIN No. 46 is effective immediately for variable interest entities
created after January 31, 2003, and to variable interest entities in which an
enterprise obtains an interest after that date. The Interpretation applies in
the first fiscal year or interim period beginning after June 15, 2003, to
variable interest entities in which an enterprise holds a variable interest that
it acquired before February 1, 2003. Adoption of this standard will not have any
immediate effect on our consolidated financial statements.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

         We have identified certain accounting policies as critical to our
business and to the results of our operations, certain of which entail
significant estimates. These critical policies are further discussed below.

         Revenues from the sale of individual franchises in the United States
and Canada, and master license agreements in foreign countries are generally
recognized, net of an allowance for uncollectible amounts, when substantially
all significant services to be provided by us have been performed. Regional
franchise agreements have been sold in the past which grant the regional
franchisees the right to sell individual franchises in their territory. The
regional franchisees generally receive commissions on individual franchises sold
as well as a share of royalties collected from franchisees in their territory.

         Interest on trade notes receivable from franchisees is accrued and
recorded as income, net of an allowance for uncollectible amounts, when due. In
situations where revenues from franchise sales is collectible over an extended
period of time, down payments are not sufficient and/or collectibility is not
reasonably certain, revenue is recognized on the installment method as amounts
are collected or when collection is reasonably assured. Interest on trade notes
receivable resulting from sales recorded on the installment method is recorded
when received.

         Our policy for valuation of our allowance accounts, including our notes
receivable allowance and our accounts receivable allowance, requires us to
estimate the collectibility of the assets associated with these allowances,
based on payment history. These estimates are reviewed monthly and changes made
based on any new information we have at the time. If our underlying assumptions
for these estimates change then we could be required to record additional
reserves or lower the reserves as appropriate.

         In conjunction with the implementation of the new accounting rules for
goodwill, we completed a goodwill impairment review for Glass Doctor, the
reporting unit that has all of our recorded goodwill, as of January 1, 2002 and
December 31, 2002, and found no impairment. According to our accounting policy
under the new rules, we will perform a similar review as of the last day of the
year, or earlier if indicators of potential impairment exist. Our impairment
review process is based on a discounted multiple of royalties which involves our
estimate of future royalty revenues for four years, as well as appropriate
discount rates. These estimates are consistent with the plans and estimates we
use to manage the underlying business. The estimates we use assume continuation
of the growth rate of existing franchisees and the addition of new franchisees.
If we fail to achieve our assumed growth rates or experience a significant
decrease in our royalty stream, we may incur charges for impairment of goodwill
in the future.

         Also in conjunction with the new accounting rules, we reviewed the
useful lives of our other intangible assets and found no impairment or change in
their useful lives. In the future we may incur charges if the useful life of any
such asset changes or if an asset becomes impaired.

CONTRACTUAL OBLIGATIONS AND CONTINGENT LIABILITIES AND COMMITMENTS

         We have contractual obligations and commitments primarily in regards to
payment of debt and lease arrangements.

<Table>
<Caption>
                                                                PAYMENTS DUE BY PERIOD
                                       -----------------------------------------------------------------------
                                                                                           Beyond
Contractual Obligations                 2003         2004         2005         2006         2007        Total
                                       ------       ------       ------       ------       ------       ------
<S>                                    <C>          <C>          <C>          <C>          <C>          <C>
   Long-Term Debt                      $1,117       $  468       $  257       $1,966       $   --       $3,808
   Operational Lease Commitments
                                           --           --           --           --           --           --
                                       ------       ------       ------       ------       ------       ------

Total Contractual Obligations          $1,117       $  468       $  257       $1,966       $1,117       $3,808
                                       ======       ======       ======       ======       ======       ======
</Table>


                                       17
<PAGE>

         There was $350,000 in outstanding borrowings under our revolving credit
facility at December 31, 2002. See Note 8 for more information.


                                       18
<PAGE>

                                    PART III


ITEM 12.    CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

         We have engaged in a number of transactions with our Chair of the Board
and majority stockholder, Ms. Theresa Dwyer ("Ms. Dwyer"), and with entities
controlled by Ms. Dwyer ("Affiliates"). Such Affiliates include Dwyer Real
Estate ("DRE"), Worldwide Supply, Inc. ("WWS"), Worldwide Refinishing Systems,
Inc. ("WWR"), Environmental Air Services International, Inc. ("EAS"), Worldwide
Cabinet Systems, Inc. ("WCS") and The Donald J. Dwyer, Sr. Estate (the
"Estate").

         In 2001, we purchased our principal executive and administrative
facilities (land, buildings and equipment) from Ms. Dwyer for a purchase price
of approximately $3.7 million, which equaled the appraised value of the
facilities. In accordance with generally accepted accounting principles, the
transaction was recorded at Ms. Dwyer's basis in the facilities, approximately
$2.8 million, with the difference between the purchase price and basis
(approximately $900,000) being reflected as a reduction in stockholders' equity.
We financed approximately $2.9 million of the purchase price using a bank loan
collateralized by the purchased facilities, and paid Mrs. Dwyer approximately
$3.7 million in cash. At closing, Ms. Dwyer used a portion of the monies
received in the sale of the facilities to repay approximately $2.2 million of
related-party debt due to us from Affiliates as follows: EAS - $180,000; WCS -
$288,000; WWR - $1,251,000; DRE - $181,000; WWS - $208,000; and the Estate -
$60,000. After completion of the above transactions, our cash position had
improved by approximately $1.5 million. We used this cash for improvements to
the property, payment of existing debt, and for additional working capital.

         In December of 2002, we purchased a house and vacant property adjacent
to our principal executive and administrative facilities from Ms. Dwyer for a
purchase price of approximately $332,000, which equaled the appraised value of
the assets. In accordance with generally accepted accounting principles, the
transaction was recorded at Ms. Dwyer's basis in the assets, approximately
$75,000, with the difference between the purchase price and basis (approximately
$257,000) being reflected as a reduction in stockholders' equity. This entire
purchase was funded through the forgiveness of related-party debt due to us from
Affiliates as follows: WWR - $212,000; WWS - $100,000; and the Estate - $20,000.

         We purchase promotional materials (primarily products with company
logos) from WWS. Until we purchased our principal executive and administrative
offices in April of 2001, we also paid DRE for rent and repair and maintenance
services. We expensed approximately $106,000 for these items in 2002, and
$288,000 in 2001.

         We recognized income from DRE, WWS and WWR for accounting, legal and
administrative services, interest income, product sales commissions and
management fees of approximately $390,000 in 2002, and $479,000 in 2001. In
addition, from time-to-time, we have made advances to these Affiliates, which
generally have not had specific repayment terms and have been reflected in our
financial statements as accounts receivable or notes receivable from related
parties. These advances typically result from the payment of an invoice by one
entity for services or items performed or delivered on behalf of ourselves and
one or more these Affiliates. The company that pays the invoice is eventually
reimbursed by the other companies for the appropriate amount based on a pro rata
allocation of the services provided to each company.

         We paid an independent director, Donald E. Latin, approximately $33,000
in 2002 and $33,000 in 2001, for board fees. In addition, another independent
director, John P. Hayes, provides consulting services regarding public
relations, marketing and advertising, brand building, franchisee training and
special projects. We paid Mr. Hayes approximately $106,000 in 2002, and $108,000
in 2001, for these services and board fees. In addition, we paid a new
independent director, Burton B. Cohen, approximately $16,000 in 2002
representing board fees for a partial year's service on the Board.

         At December 31, 2002, we had accounts (including advances discussed
above), interest and notes receivable from Affiliates of approximately $310,000,
broken down as follows: the Estate - $242,000; WWR - $47,000; and WWS - $21,000.
At December 31, 2001, such outstanding amounts equaled approximately $490,000,
broken down as follows: the Estate - $242,000; WWR - $156,000; WWS - $90,000;
and DRE - $2,000. Ms. Dwyer has guaranteed payment of all amounts due from
Affiliates.

         Dina Dwyer-Owens, Deborah Wright-Hood, Donald J. Dwyer, Jr., Darren
Dwyer, Douglas Dwyer, and Donna Dwyer-Van Zandt are the children of Ms. Dwyer
and the late founder, Donald J. Dwyer, Sr.


                                       19
<PAGE>
ITEM 13.   EXHIBITS AND REPORTS ON FORM 8-K

    (a)  Documents filed as a part of this report:

         2.       Exhibits

<Table>
<S>           <C>
     3.1      Certificate of Incorporation, as amended (1)

     3.2      Certificate of Amendment of Certificate of Incorporation filed
              June 12, 1987 (2)

     3.3      Certificate of Amendment of Certificate of Incorporation filed May
              8, 1988 (2)

     3.4      Certificate of Amendment of Certificate of Incorporation filed
              July 30, 1993 (2)

     3.5      Bylaws (1)

     4.1      Form of Representative's Warrant Agreement, including
              Representative's Warrant (2)

     4.2      Warrants to Purchase Common Stock issued to Norcross Securities,
              Inc. (2)

    10.1      Stock Option Plan, as amended, and form of Employee Stock Option
              Agreement (1)

    10.2      Form of Rainbow International Carpet Dyeing and Cleaning Co.
              License Agreement (2)

    10.3      Form of Mr. Rooter Corporation Franchise Agreement (2)

    10.4      Form of General Business Services License Agreement (2)

    10.5      Form of Aire Serv Corporation Franchise Agreement (2)

    10.6      Certificate of Registration of Service Mark "MR. ROOTER" (1)

    10.7      Certificate of Registration of Service Mark "QUICK-AS-A-WINK" (1)

    10.8      Certificate of Registration of Mr. Rooter logo (1)

    10.9      Certificate of Registration of Service Mark "Super Kleens" logo
              (1)

    10.10     Certificate of Registration for Service Mark "America's Trouble
              Shooter" (1)

    10.11     Certificate of Registration of Trademark "MR. ROOTER" issued by
              Office of Consumer and Corporate Affairs in Canada (1)

    10.12     Lease Agreement between Donald J. Dwyer and Mr. Rooter
              Corporation, dated December 20, 1991 (2)

    10.13     Lease Agreement between Donald J. Dwyer and Rainbow International
              Carpet Dyeing and Cleaning Training Center, commencing January 1,
              1993 (2)

    10.14     Lease Agreement between Donald J. Dwyer and Rainbow International
              Carpet Dyeing and Cleaning Waco Franchise, commencing January 1,
              1993 (2)

    10.15     Lease Agreement between Donald J. Dwyer and General Business
              Services, dated August 31, 1993 (2)

    10.16     Lease Agreement between Donald J. Dwyer and Rainbow International,
              dated September 1, 1993 (2)

    10.17     Lease Agreement between Donald J. Dwyer and The Dwyer Group, Inc.,
              dated February 18, 1994 (2)

    10.18     Agreement and Plan of Reorganization and Share Exchange (3)

    10.19     Agreement for Purchase and Sale of Assets of National
              Manufacturing & Supply Corporation (4)

    10.20     Franchisee Financing Agreement dated July 2, 1993, with Addendum
              dated December 23, 1993 (4)

    10.21     Shareholders' Voting Proxy and Stock Sale Agreement, between
              Donald J. Dwyer, Sr. and Vernon Lee Russell and wife, Sylvia
              Russell, and the Company (5)

    10.22     Stock Purchase Agreement between Donald J. Dwyer, Sr., Vernon Lee
              Russell and Sylvia Russell (5)

    10.23     Stock Option Agreement between the Company and Donald J. Dwyer (5)

    10.24     Incentive Stock Option Agreement between the Company and John
              Appel for 25,000 shares of the Company's Common Stock (4)

    10.25     Incentive Stock Option Agreement between the Company and Douglas
              C. Holsted for 12,500 shares of the Company's Common Stock (1)

    10.26     Incentive Stock Option Agreement between the Company and Dina
              Dwyer-Owens for 2,500 shares of the Company's Common Stock (1)

    10.27     Incentive Stock Option Agreement between the Company and Robert A.
              Tunmire for 50,000 shares of the Company's Common Stock (1)

    10.28     Employment Contract between the Company and Donald J. Dwyer (1)

    10.29     Guaranty Agreement, executed December 1, 1982 by Rainbow
              International Carpet Dyeing and Cleaning Company (2)

    10.30     Guaranty Agreement, executed May 1, 1984 by Rainbow International
              Carpet Dyeing and Cleaning Company (2)

    10.31     Promissory Note, executed January 7, 1993, by and between Pride
              Venture Capital, Inc. and GTL Services, Ltd. (2)

    10.32     Form of Affiliate Transactions Agreement (2)

    10.33     Stock Purchase Agreement dated May 14, 1994 by and between The
              Dwyer Group, Inc., Co Data AG and Central Data BV (6)

    10.34     Irrevocable Stock or Bond Power, Note and Security Agreement,
              dated May 25, 1994, by and between Christian Mission Concerns, as
              lender, and the Company, as borrower (2)

    10.35     Mutual Release by and between General Business Services, Pride
              Venture Capital and GTL Services Ltd., effective June 10, 1994 (2)
</Table>


                                       20
<PAGE>

<Table>
<S>           <C>
    10.36     Assignment of Judgments and Claims, executed by and between
              General Business Services, Inc., Pride Venture Capital, Inc., and
              GTL Services, Ltd., dated June 10, 1994 (3)

    10.37     Promissory Note, executed June 8, 1994, by and between the Company
              and NationsBank of Texas, N.A. (2)

    10.38     Promissory Note, executed June 9, 1994, by and between the Company
              and Central National Bank (2)

    10.39     Certificate of Registration of Service Mark "Aire Serv", dated
              Jan. 25, 1994 (7)

    10.40     Stock Purchase Agreement dated September 14, 1994, by and between
              E.K. Williams & Co. and Service Station Computers Systems, Inc.
              (7)

    10.41     Stock Option Agreement by and between the Company and James
              Sirbasku for 10,000 shares of the Company's Common Stock (7)

    10.42     Stock Option Agreement by and between the Company and John Hayes
              for 10,000 shares of the Company's Common Stock (7)

    10.43     Stock Option Agreement by and between the Company and Anthony
              DeSio for 10,000 shares of the Company's Common Stock (7)

    10.44     Incentive Stock Option Agreement by and between the Company and
              Matthew Michel (7)

    10.45     Mutual Release by and between General Business Services, Inc., and
              Paul Woody effective June 30, 1996 (8)

    10.46     Consulting Agreement by and between General Business Services,
              Inc., E.K. Williams & Co., and Paul Woody effective July 1, 1996
              (8)

    10.47     Stock Option Agreement by and between the Company and Paul Woody
              for 25,000 shares of the Company's Common Stock (8)

    10.48     Agreement dated as of June 1, 1993, between the Company and the
              personal representatives of Mr. Donald J. Dwyer, Sr., his Estate
              and the Dwyer Family Trust regarding cancellation of 340,300
              Escrow Shares (9)

    10.49     Form Of Stock Option Agreement by and between the Company and Don
              Latin for 10,000 shares of the Company's Common Stock (10)

    10.50     1997 Stock Option Plan and Form Of Employee Stock Option Agreement
              (10)

    10.51     Form Of Warrant Agreement and Warrant issued to V. Lee Russell
              (10)

    10.52     Form Of Warrant Agreement and Warrant issued to David B. Duck.
              (10)

    10.53     Form Of Stock Option Agreement by and between the Company and
              Target Enterprises, Inc. for 28,500 shares of the Company's Common
              Stock. (10)

    10.54     Form Of Stock Option Agreement by and between the Company and John
              Hayes for 11,420 shares of the Company's Common Stock. (10)

    10.55     Asset Purchase Agreement dated July 24, 1998, by and among The
              Dwyer Group, Inc., Glassmarks, Inc., Glass Doctor Corporation and
              Barton G. Tracy. (11)

    10.56     Stock Purchase Agreement dated July 24, 1998, by and between The
              Dwyer Group, Inc., Barton G. Tracy and Glassmarks, Inc. (11)

    10.57     Asset Purchase Agreement by and among Century Business Services,
              Inc., General Business Services, Inc., General Tax Services, Inc.,
              Edwin K. Williams & Co., GBS Acquisition Corp. and The Company.
              (12)

    10.58     Form of Stock Option Agreement dated December 23, 1997, by and
              between the Company and Tom Buckley for 64,205 shares of the
              Company's Common Stock. (13)

    10.59     Form of Stock Option Agreement dated August 25, 1998, by and
              between the Company and Tom Buckley for 15,000 shares of the
              Company's Common Stock. (13)

    10.60     Form of Stock Option Agreement dated January 28, 1998, by and
              between the Company and James Sirbasku for 10,000 shares of the
              Company's Common Stock. (13)

    10.61     Form of Stock Option Agreement dated August 25, 1998, by and
              between the Company and Donald E. Latin for 5,000 shares of the
              Company's Common Stock. (13)

    10.62     Form of Stock Option Agreement dated January 28, 1998, by and
              between the Company and John Hayes for 10,000 shares of the
              Company's Common Stock. (13)

    10.63     Form of Stock Option Agreement dated April 29, 1999 by and between
              the Company and Don Latin for 5,000 shares of the Company's Common
              Stock. (14)

    10.64     Form of Stock Option Agreement dated June 29, 1999 by and between
              the Company and Don Latin for 10,000 shares of the Company's
              Common Stock. (14)

    10.65     Form of Stock Option Agreement dated June 29, 1999 by and between
              the Company and Mike Bidwell for 16,000 shares of the Company's
              Common Stock. (14)

    10.66     Form of Stock Option Agreement dated June 29, 1999 by and between
              the Company and John Hayes for 10,000 shares of the Company's
              Common Stock. (14)

    10.67     Form of Stock Option Agreement dated April 29, 1999 by and between
              the Company and Tom Buckley for 10,000 shares of the Company's
              Common Stock. (14)

    10.68     Form of Stock Option Agreement dated June 29, 1999 by and between
              the Company and Tom Buckley for 2,000 shares of the Company's
              Common Stock. (14)

    10.69     Form of Stock Option Agreement dated January 27, 2000 by and
              between the Company and Tom Buckley for
</Table>


                                       21
<PAGE>

<Table>
<S>           <C>
              5,000 shares of the Company's Common Stock. (15)

10.70         Form of Stock Option Agreement dated September 1, 2000 by and
              between the Company and Mike Bidwell for 5,000 shares of the
              Company's Common Stock. (15)

10.71         Form of Stock Option Agreement dated September 1, 2000 by and
              between the Company and Don Latin for 10,000 shares of the
              Company's Common Stock. (15)

10.72         Form of Stock Option Agreement dated September 1, 2000 by and
              between the Company and John Hayes for 10,000 shares of the
              Company's Common Stock. (15)

10.73         Form of Stock Option Agreement dated June 22, 2001 by and between
              the Company and Don Latin for 10,000 shares of the Company's
              Common Stock. (16)

10.74         Form of Stock Option Agreement dated June 22, 2001 by and between
              the Company and Don Latin for 10,000 shares of the Company's
              Common Stock. (16)

10.75         Form of Stock Option Agreement dated June 22, 2001 by and between
              the Company and John Hayes for 10,000 shares of the Company's
              Common Stock. (16)

10.76         Form of Stock Option Agreement dated October 30, 2001 by and
              between the Company and Jim Sirbasku for 10,000 shares of the
              Company's Common Stock. (16)

10.77         Form of Stock Option Agreement dated October 30, 2001 by and
              between the Company and John Hayes for 10,000 shares of the
              Company's Common Stock. (16)

10.78         Form of Stock Option Agreement dated October 30, 2001 by and
              between the Company and John Hayes for 10,000 shares of the
              Company's Common Stock. (16)

10.79         Form of Stock Option Agreement dated June 22, 2001 by and between
              the Company and Jim Sirbasku for 10,000 shares of the Company's
              Common Stock. (16)

10.80         Form of Stock Option Agreement dated June 22, 2001 by and between
              the Company and Tom Buckley for 25,000 shares of the Company's
              Common Stock. (16)

10.81         Form of Stock Option Agreement dated February 28, 2002 by and
              between the Company and Don Latin for 5,000 shares of the
              Company's Common Stock. (16)

10.82         Form of Stock Option Agreement dated February 28, 2002 by and
              between the Company and John Hayes for 5,000 shares of the
              Company's Common Stock. (16)

10.83         Form of Stock Option Agreement dated February 28, 2002 by and
              between the Company and Mike Bidwell for 5,000 shares of the
              Company's Common Stock. (16)

10.84         Form of Stock Option Agreement dated February 28, 2002 by and
              between the Company and Tom Buckley for 5,000 shares of the
              Company's Common Stock. (16)

10.85         Form of Stock Option Agreement dated April 29, 2002 by and between
              the Company and Burt Cohen for 40,000 shares of the Company's
              Common Stock. (17)

10.86         Form of Stock Option Agreement dated September 5, 2002 by and
              between the Company and Burt Cohen for 10,000 shares of the
              Company's Common Stock. (17)

10.87         Form of Stock Option Agreement dated September 5, 2002 by and
              between the Company and Don Latin for 10,000 shares of the
              Company's Common Stock. (17)

21.1          List of Subsidiaries (17)

23.1          Consent of Independent Certified Public Accountants related to S-8
              filing (17)

99.1*         Certification by CEO pursuant to 18 U.S.C. Section 1350, as
              adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

99.2*         Certification by CFO pursuant to 18 U.S.C. Section 1350, as
              adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
</Table>


* Filed herewith.

----------

(1)    Incorporated by reference to the Registrant's Form S-18 registration
       statement (SEC File No. 33-7290-FW).

(2)    Incorporated by reference to the Registrant's Form SB-2 registration
       statement (SEC File No. 33-78814).

(3)    Incorporated by reference to the Registrant's Form 8-K/A dated as of June
       1, 1993 (SEC File No. 0-15227).

(4)    Incorporated by reference to the Registrant's Form 10-K for its fiscal
       year ended December 31, 1993 (SEC File No. 0-15227).

(5)    Incorporated by reference to the Registrant's Schedule 13D of Donald J.
       Dwyer, dated May 4, 1989, filed May 9, 1989 (SEC File No. 0-15227).


                                       22
<PAGE>

(6)    Incorporated by reference to the Registrant's Form 8-K dated as of May
       14, 1994 (SEC File No. 0-15227).

(7)    Incorporated by reference to the Registrant's Form 10-KSB for its fiscal
       year ended December 31, 1994 (SEC File No. 0-15227).

(8)    Incorporated by reference to the Registrant's Form 10-KSB for its fiscal
       year ended December 31, 1996 (SEC File No. 0-15227).

(9)    Incorporated by reference to the Registrant's Form 8-K dated as of July
       31, 1997 (SEC File No. 0-15227).

(10)   Incorporated by reference to the Registrant's Form 10-KSB for its fiscal
       year ended December 31, 1997 (SEC File No. 0-15227).

(11)   Incorporated by reference to the Registrant's Form 8-K dated as of July
       24, 1998 (SEC File No. 0-15227).

(12)   Incorporated by reference to the Registrant's Form 8-K dated as of July
       31, 1998 (SEC File No. 0-15227).

(13)   Incorporated by reference to the Registrant's Form 10-KSB dated as of
       March 29, 1999 (SEC File No. 0-15227).

(14)   Incorporated by reference to the Registrant's Form 10-QSB dated as of
       July 30, 1999 (SEC File No. 0-15227).

(15)   Incorporated by reference to the Registrant's Form 10-KSB for its fiscal
       year ended December 31, 2000 (SEC File No. 0-15227).

(16)   Incorporated by reference to the Registrant's Form 10-KSB for its fiscal
       year ended December 31, 2001 (SEC File No. 0-15227).

(17)   Incorporated by reference to the Registrant's Form 10-KSB for its fiscal
       year ended December 31, 2002 (SEC File No. 0-15227).

----------


                                       23
<PAGE>

SIGNATURES


         In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Waco and the State of Texas on this
31st day of July 2003.


THE DWYER GROUP, INC.


By:               /s/ Thomas J. Buckley
         -----------------------------------------------------
         Thomas J. Buckley
         Vice President, Chief Financial Officer and Treasurer


         In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities and
on the date indicated.


<Table>
<Caption>
Signatures                                           Title                                                Date
----------                                           -----                                                ----
<S>                                                  <C>                                                  <C>
  /s/ Theresa Dwyer                                  Chairperson of the Board                             July 31, 2003
---------------------------                          of Directors and Director
Theresa Dwyer

  /s/ Dina Dwyer-Owens                               President, Chief                                     July 31, 2003
---------------------------                          (Principal Executive Officer)
Dina Dwyer-Owens                                     Executive Officer, and Director


  /s/ Robert Tunmire                                 Executive Vice President                             July 31, 2003
---------------------------                          and Director
Robert Tunmire

  /s/ Thomas J. Buckley                              Vice President, Chief Financial                      July 31, 2003
---------------------------                          Officer and Treasurer
Thomas J. Buckley                                    (Principal Financial and Accounting Officer)

  /s/ Donald J. Dwyer, Jr.                           Director of International Operations                 July 31, 2003
---------------------------                          and Director
Donald J. Dwyer, Jr.

  /s/ Burton D. Cohen                                Director                                             July 31, 2003
---------------------------
Burton D. Cohen

  John P. Hayes                                      Director                                             July 31, 2003
---------------------------
John P. Hayes

  /s/ Donald E. Latin                                Director                                             July 31, 2003
---------------------------
Donald E. Latin
</Table>


Signature Page


<PAGE>

                               INDEX TO EXHIBITS


<Table>
<Caption>
Exhibit
  No.      Description
-------    -----------
<S>        <C>
  3.1      Certificate of Incorporation, as amended (1)

  3.2      Certificate of Amendment of Certificate of Incorporation filed
           June 12, 1987 (2)

  3.3      Certificate of Amendment of Certificate of Incorporation filed May
           8, 1988 (2)

  3.4      Certificate of Amendment of Certificate of Incorporation filed
           July 30, 1993 (2)

  3.5      Bylaws (1)

  4.1      Form of Representative's Warrant Agreement, including
           Representative's Warrant (2)

  4.2      Warrants to Purchase Common Stock issued to Norcross Securities,
           Inc. (2)

 10.1      Stock Option Plan, as amended, and form of Employee Stock Option
           Agreement (1)

 10.2      Form of Rainbow International Carpet Dyeing and Cleaning Co.
           License Agreement (2)

 10.3      Form of Mr. Rooter Corporation Franchise Agreement (2)

 10.4      Form of General Business Services License Agreement (2)

 10.5      Form of Aire Serv Corporation Franchise Agreement (2)

 10.6      Certificate of Registration of Service Mark "MR. ROOTER" (1)

 10.7      Certificate of Registration of Service Mark "QUICK-AS-A-WINK" (1)

 10.8      Certificate of Registration of Mr. Rooter logo (1)

 10.9      Certificate of Registration of Service Mark "Super Kleens" logo
           (1)

 10.10     Certificate of Registration for Service Mark "America's Trouble
           Shooter" (1)

 10.11     Certificate of Registration of Trademark "MR. ROOTER" issued by
           Office of Consumer and Corporate Affairs in Canada (1)

 10.12     Lease Agreement between Donald J. Dwyer and Mr. Rooter
           Corporation, dated December 20, 1991 (2)

 10.13     Lease Agreement between Donald J. Dwyer and Rainbow International
           Carpet Dyeing and Cleaning Training Center, commencing January 1,
           1993 (2)

 10.14     Lease Agreement between Donald J. Dwyer and Rainbow International
           Carpet Dyeing and Cleaning Waco Franchise, commencing January 1,
           1993 (2)

 10.15     Lease Agreement between Donald J. Dwyer and General Business
           Services, dated August 31, 1993 (2)

 10.16     Lease Agreement between Donald J. Dwyer and Rainbow International,
           dated September 1, 1993 (2)

 10.17     Lease Agreement between Donald J. Dwyer and The Dwyer Group, Inc.,
           dated February 18, 1994 (2)

 10.18     Agreement and Plan of Reorganization and Share Exchange (3)

 10.19     Agreement for Purchase and Sale of Assets of National
           Manufacturing & Supply Corporation (4)

 10.20     Franchisee Financing Agreement dated July 2, 1993, with Addendum
           dated December 23, 1993 (4)

 10.21     Shareholders' Voting Proxy and Stock Sale Agreement, between
           Donald J. Dwyer, Sr. and Vernon Lee Russell and wife, Sylvia
           Russell, and the Company (5)

 10.22     Stock Purchase Agreement between Donald J. Dwyer, Sr., Vernon Lee
           Russell and Sylvia Russell (5)

 10.23     Stock Option Agreement between the Company and Donald J. Dwyer (5)

 10.24     Incentive Stock Option Agreement between the Company and John
           Appel for 25,000 shares of the Company's Common Stock (4)

 10.25     Incentive Stock Option Agreement between the Company and Douglas
           C. Holsted for 12,500 shares of the Company's Common Stock (1)

 10.26     Incentive Stock Option Agreement between the Company and Dina
           Dwyer-Owens for 2,500 shares of the Company's Common Stock (1)

 10.27     Incentive Stock Option Agreement between the Company and Robert A.
           Tunmire for 50,000 shares of the Company's Common Stock (1)

 10.28     Employment Contract between the Company and Donald J. Dwyer (1)

 10.29     Guaranty Agreement, executed December 1, 1982 by Rainbow
           International Carpet Dyeing and Cleaning Company (2)

 10.30     Guaranty Agreement, executed May 1, 1984 by Rainbow International
           Carpet Dyeing and Cleaning Company (2)

 10.31     Promissory Note, executed January 7, 1993, by and between Pride
           Venture Capital, Inc. and GTL Services, Ltd. (2)

 10.32     Form of Affiliate Transactions Agreement (2)

 10.33     Stock Purchase Agreement dated May 14, 1994 by and between The
           Dwyer Group, Inc., Co Data AG and Central Data BV (6)

 10.34     Irrevocable Stock or Bond Power, Note and Security Agreement,
           dated May 25, 1994, by and between Christian Mission Concerns, as
           lender, and the Company, as borrower (2)

 10.35     Mutual Release by and between General Business Services, Pride
           Venture Capital and GTL Services Ltd., effective June 10, 1994 (2)
</Table>


<PAGE>

<Table>
<S>        <C>
 10.36     Assignment of Judgments and Claims, executed by and between
           General Business Services, Inc., Pride Venture Capital, Inc., and
           GTL Services, Ltd., dated June 10, 1994 (3)

 10.37     Promissory Note, executed June 8, 1994, by and between the Company
           and NationsBank of Texas, N.A. (2)

 10.38     Promissory Note, executed June 9, 1994, by and between the Company
           and Central National Bank (2)

 10.39     Certificate of Registration of Service Mark "Aire Serv", dated
           Jan. 25, 1994 (7)

 10.40     Stock Purchase Agreement dated September 14, 1994, by and between
           E.K. Williams & Co. and Service Station Computers Systems, Inc.
           (7)

 10.41     Stock Option Agreement by and between the Company and James
           Sirbasku for 10,000 shares of the Company's Common Stock (7)

 10.42     Stock Option Agreement by and between the Company and John Hayes
           for 10,000 shares of the Company's Common Stock (7)

 10.43     Stock Option Agreement by and between the Company and Anthony
           DeSio for 10,000 shares of the Company's Common Stock (7)

 10.44     Incentive Stock Option Agreement by and between the Company and
           Matthew Michel (7)

 10.45     Mutual Release by and between General Business Services, Inc., and
           Paul Woody effective June 30, 1996 (8)

 10.46     Consulting Agreement by and between General Business Services,
           Inc., E.K. Williams & Co., and Paul Woody effective July 1, 1996
           (8)

 10.47     Stock Option Agreement by and between the Company and Paul Woody
           for 25,000 shares of the Company's Common Stock (8)

 10.48     Agreement dated as of June 1, 1993, between the Company and the
           personal representatives of Mr. Donald J. Dwyer, Sr., his Estate
           and the Dwyer Family Trust regarding cancellation of 340,300
           Escrow Shares (9)

 10.49     Form Of Stock Option Agreement by and between the Company and Don
           Latin for 10,000 shares of the Company's Common Stock (10)

 10.50     1997 Stock Option Plan and Form Of Employee Stock Option Agreement
           (10)

 10.51     Form Of Warrant Agreement and Warrant issued to V. Lee Russell
           (10)

 10.52     Form Of Warrant Agreement and Warrant issued to David B. Duck.
           (10)

 10.53     Form Of Stock Option Agreement by and between the Company and
           Target Enterprises, Inc. for 28,500 shares of the Company's Common
           Stock. (10)

 10.54     Form Of Stock Option Agreement by and between the Company and John
           Hayes for 11,420 shares of the Company's Common Stock. (10)

 10.55     Asset Purchase Agreement dated July 24, 1998, by and among The
           Dwyer Group, Inc., Glassmarks, Inc., Glass Doctor Corporation and
           Barton G. Tracy. (11)

 10.56     Stock Purchase Agreement dated July 24, 1998, by and between The
           Dwyer Group, Inc., Barton G. Tracy and Glassmarks, Inc. (11)

 10.57     Asset Purchase Agreement by and among Century Business Services,
           Inc., General Business Services, Inc., General Tax Services, Inc.,
           Edwin K. Williams & Co., GBS Acquisition Corp. and The Company.
           (12)

 10.58     Form of Stock Option Agreement dated December 23, 1997, by and
           between the Company and Tom Buckley for 64,205 shares of the
           Company's Common Stock. (13)

 10.59     Form of Stock Option Agreement dated August 25, 1998, by and
           between the Company and Tom Buckley for 15,000 shares of the
           Company's Common Stock. (13)

 10.60     Form of Stock Option Agreement dated January 28, 1998, by and
           between the Company and James Sirbasku for 10,000 shares of the
           Company's Common Stock. (13)

 10.61     Form of Stock Option Agreement dated August 25, 1998, by and
           between the Company and Donald E. Latin for 5,000 shares of the
           Company's Common Stock. (13)

 10.62     Form of Stock Option Agreement dated January 28, 1998, by and
           between the Company and John Hayes for 10,000 shares of the
           Company's Common Stock. (13)

 10.63     Form of Stock Option Agreement dated April 29, 1999 by and between
           the Company and Don Latin for 5,000 shares of the Company's Common
           Stock. (14)

 10.64     Form of Stock Option Agreement dated June 29, 1999 by and between
           the Company and Don Latin for 10,000 shares of the Company's
           Common Stock. (14)

 10.65     Form of Stock Option Agreement dated June 29, 1999 by and between
           the Company and Mike Bidwell for 16,000 shares of the Company's
           Common Stock. (14)

 10.66     Form of Stock Option Agreement dated June 29, 1999 by and between
           the Company and John Hayes for 10,000 shares of the Company's
           Common Stock. (14)

 10.67     Form of Stock Option Agreement dated April 29, 1999 by and between
           the Company and Tom Buckley for 10,000 shares of the Company's
           Common Stock. (14)

 10.68     Form of Stock Option Agreement dated June 29, 1999 by and between
           the Company and Tom Buckley for 2,000 shares of the Company's
           Common Stock. (14)

 10.69     Form of Stock Option Agreement dated January 27, 2000 by and
           between the Company and Tom Buckley for
</Table>


<PAGE>

<Table>
<S>        <C>
           5,000 shares of the Company's Common Stock. (15)

 10.70     Form of Stock Option Agreement dated September 1, 2000 by and
           between the Company and Mike Bidwell for 5,000 shares of the
           Company's Common Stock. (15)

 10.71     Form of Stock Option Agreement dated September 1, 2000 by and
           between the Company and Don Latin for 10,000 shares of the
           Company's Common Stock. (15)

 10.72     Form of Stock Option Agreement dated September 1, 2000 by and
           between the Company and John Hayes for 10,000 shares of the
           Company's Common Stock. (15)

 10.73     Form of Stock Option Agreement dated June 22, 2001 by and between
           the Company and Don Latin for 10,000 shares of the Company's
           Common Stock. (16)

 10.74     Form of Stock Option Agreement dated June 22, 2001 by and between
           the Company and Don Latin for 10,000 shares of the Company's
           Common Stock. (16)

 10.75     Form of Stock Option Agreement dated June 22, 2001 by and between
           the Company and John Hayes for 10,000 shares of the Company's
           Common Stock. (16)

 10.76     Form of Stock Option Agreement dated October 30, 2001 by and
           between the Company and Jim Sirbasku for 10,000 shares of the
           Company's Common Stock. (16)

 10.77     Form of Stock Option Agreement dated October 30, 2001 by and
           between the Company and John Hayes for 10,000 shares of the
           Company's Common Stock. (16)

 10.78     Form of Stock Option Agreement dated October 30, 2001 by and
           between the Company and John Hayes for 10,000 shares of the
           Company's Common Stock. (16)

 10.79     Form of Stock Option Agreement dated June 22, 2001 by and between
           the Company and Jim Sirbasku for 10,000 shares of the Company's
           Common Stock. (16)

 10.80     Form of Stock Option Agreement dated June 22, 2001 by and between
           the Company and Tom Buckley for 25,000 shares of the Company's
           Common Stock. (16)

 10.81     Form of Stock Option Agreement dated February 28, 2002 by and
           between the Company and Don Latin for 5,000 shares of the
           Company's Common Stock. (16)

 10.82     Form of Stock Option Agreement dated February 28, 2002 by and
           between the Company and John Hayes for 5,000 shares of the
           Company's Common Stock. (16)

 10.83     Form of Stock Option Agreement dated February 28, 2002 by and
           between the Company and Mike Bidwell for 5,000 shares of the
           Company's Common Stock. (16)

 10.84     Form of Stock Option Agreement dated February 28, 2002 by and
           between the Company and Tom Buckley for 5,000 shares of the
           Company's Common Stock. (16)

 10.85     Form of Stock Option Agreement dated April 29, 2002 by and between
           the Company and Burt Cohen for 40,000 shares of the Company's
           Common Stock. (17)

 10.86     Form of Stock Option Agreement dated September 5, 2002 by and
           between the Company and Burt Cohen for 10,000 shares of the
           Company's Common Stock. (17)

 10.87     Form of Stock Option Agreement dated September 5, 2002 by and
           between the Company and Don Latin for 10,000 shares of the
           Company's Common Stock. (17)

 21.1      List of Subsidiaries (17)

 23.1      Consent of Independent Certified Public Accountants related to S-8
           filing (17)

 99.1*     Certification by CEO pursuant to 18 U.S.C. Section 1350, as
           adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 99.2*     Certification by CFO pursuant to 18 U.S.C. Section 1350, as
           adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
</Table>


* Filed herewith.

----------

(1)    Incorporated by reference to the Registrant's Form S-18 registration
       statement (SEC File No. 33-7290-FW).

(2)    Incorporated by reference to the Registrant's Form SB-2 registration
       statement (SEC File No. 33-78814).

(3)    Incorporated by reference to the Registrant's Form 8-K/A dated as of June
       1, 1993 (SEC File No. 0-15227).

(4)    Incorporated by reference to the Registrant's Form 10-K for its fiscal
       year ended December 31, 1993 (SEC File No. 0-15227).

(5)    Incorporated by reference to the Registrant's Schedule 13D of Donald J.
       Dwyer, dated May 4, 1989, filed May 9, 1989 (SEC File No. 0-15227).


<PAGE>

(6)    Incorporated by reference to the Registrant's Form 8-K dated as of May
       14, 1994 (SEC File No. 0-15227).

(7)    Incorporated by reference to the Registrant's Form 10-KSB for its fiscal
       year ended December 31, 1994 (SEC File No. 0-15227).

(8)    Incorporated by reference to the Registrant's Form 10-KSB for its fiscal
       year ended December 31, 1996 (SEC File No. 0-15227).

(9)    Incorporated by reference to the Registrant's Form 8-K dated as of July
       31, 1997 (SEC File No. 0-15227).

(10)   Incorporated by reference to the Registrant's Form 10-KSB for its fiscal
       year ended December 31, 1997 (SEC File No. 0-15227).

(11)   Incorporated by reference to the Registrant's Form 8-K dated as of July
       24, 1998 (SEC File No. 0-15227).

(12)   Incorporated by reference to the Registrant's Form 8-K dated as of July
       31, 1998 (SEC File No. 0-15227).

(13)   Incorporated by reference to the Registrant's Form 10-KSB dated as of
       March 29, 1999 (SEC File No. 0-15227).

(14)   Incorporated by reference to the Registrant's Form 10-QSB dated as of
       July 30, 1999 (SEC File No. 0-15227).

(15)   Incorporated by reference to the Registrant's Form 10-KSB for its fiscal
       year ended December 31, 2000 (SEC File No. 0-15227).

(16)   Incorporated by reference to the Registrant's Form 10-KSB for its fiscal
       year ended December 31, 2001 (SEC File No. 0-15227).

(17)   Incorporated by reference to the Registrant's Form 10-KSB for its fiscal
       year ended December 31, 2002 (SEC File No. 0-15227).

----------


<PAGE>

                      CERTIFICATION PURSUANT TO SECTION 302
                        OF THE SARBANES-OXLEY ACT OF 2002


         I, Dina Dwyer-Owens, President and Chief Executive Officer of The Dwyer
         Group, Inc., certify that:

         (1)      I have reviewed this Amendment No. 1 to the Annual Report on
                  Form 10-KSB of The Dwyer Group, Inc.;

         (2)      Based on my knowledge, this report does not contain any untrue
                  statement of a material fact or omit to state a material fact
                  necessary to make the statements made, in light of the
                  circumstances under which such statements were made, not
                  misleading with respect to the period covered by this report;

         (3)      Based on my knowledge, the financial statements, and other
                  financial information included in this report, fairly present
                  in all material respects the financial condition, results of
                  operations and cash flows of the registrant as of, and for,
                  the periods presented in this report;

         (4)      The registrant's other certifying officer and I are
                  responsible for establishing and maintaining disclosure
                  controls and procedures (as defined in Exchange Act Rules
                  13a-14 and 15d-14) for the registrant and we have:

                           a)       designed such disclosure controls and
                                    procedures to ensure that material
                                    information relating to the registrant,
                                    including its consolidated subsidiaries, is
                                    made known to us by others within those
                                    entities, particularly during the period for
                                    which this report is being prepared;

                           b)       evaluated the effectiveness of the
                                    registrant's disclosure controls and
                                    procedures as of a date within 90 days prior
                                    to the filing date of this report (the
                                    "Evaluation Date"); and

                           c)       presented in this report our conclusions
                                    about the effectiveness of the disclosure
                                    controls and procedures based on our
                                    evaluation as of the Evaluation Date;

         (5)      The registrant's other certifying officer and I have
                  disclosed, based on our most recent evaluation, to the
                  registrant's auditors and the audit committee of registrant's
                  board of directors (or persons performing the equivalent
                  function):

                           a)       all significant deficiencies in the design
                                    or operation of internal controls which
                                    could adversely affect the registrant's
                                    ability to record, process, summarize and
                                    report financial data and have identified
                                    for the registrant's auditors any material
                                    weaknesses in internal controls; and

                           b)       any fraud, whether or not material, that
                                    involves management or other employees who
                                    have a significant role in the registrant's
                                    internal controls; and

         (6)      The registrant's other certifying officer and I have indicated
                  in this report whether or not there were significant changes
                  in internal controls or in other factors that could
                  significantly affect internal controls subsequent to the date
                  of our most recent evaluation, including any corrective
                  actions with regard to significant deficiencies and material
                  weaknesses.


By:      /s/ Dina Dwyer-Owens
   -----------------------------------------
Dina Dwyer-Owens
Chief Executive Officer
July 31, 2003


302 CERTIFICATION - CEO


<PAGE>

                      CERTIFICATION PURSUANT TO SECTION 302
                        OF THE SARBANES-OXLEY ACT OF 2002



         I, Thomas Buckley, Vice President and Chief Financial Officer of The
         Dwyer Group, Inc., certify that:

         (1)      I have reviewed this Amendment No. 1 to the Annual Report on
                  Form 10-KSB of The Dwyer Group, Inc.;

         (2)      Based on my knowledge, this report does not contain any untrue
                  statement of a material fact or omit to state a material fact
                  necessary to make the statements made, in light of the
                  circumstances under which such statements were made, not
                  misleading with respect to the period covered by this report;

         (3)      Based on my knowledge, the financial statements, and other
                  financial information included in this report, fairly present
                  in all material respects the financial condition, results of
                  operations and cash flows of the registrant as of, and for,
                  the periods presented in this report;

         (4)      The registrant's other certifying officer and I are
                  responsible for establishing and maintaining disclosure
                  controls and procedures (as defined in Exchange Act Rules
                  13a-14 and 15d-14) for the registrant and we have:

                           a)       designed such disclosure controls and
                                    procedures to ensure that material
                                    information relating to the registrant,
                                    including its consolidated subsidiaries, is
                                    made known to us by others within those
                                    entities, particularly during the period for
                                    which this report is being prepared;

                           b)       evaluated the effectiveness of the
                                    registrant's disclosure controls and
                                    procedures as of a date within 90 days prior
                                    to the filing date of this report (the
                                    "Evaluation Date"); and

                           c)       presented in this report our conclusions
                                    about the effectiveness of the disclosure
                                    controls and procedures based on our
                                    evaluation as of the Evaluation Date;

         (5)      The registrant's other certifying officer and I have
                  disclosed, based on our most recent evaluation, to the
                  registrant's auditors and the audit committee of registrant's
                  board of directors (or persons performing the equivalent
                  function):

                           a)       all significant deficiencies in the design
                                    or operation of internal controls which
                                    could adversely affect the registrant's
                                    ability to record, process, summarize and
                                    report financial data and have identified
                                    for the registrant's auditors any material
                                    weaknesses in internal controls; and

                           b)       any fraud, whether or not material, that
                                    involves management or other employees who
                                    have a significant role in the registrant's
                                    internal controls; and

         (6)      The registrant's other certifying officer and I have indicated
                  in this report whether or not there were significant changes
                  in internal controls or in other factors that could
                  significantly affect internal controls subsequent to the date
                  of our most recent evaluation, including any corrective
                  actions with regard to significant deficiencies and material
                  weaknesses.


By:      /s/ Thomas J. Buckley
   -----------------------------------------
Thomas J. Buckley
Vice President and Chief Financial Officer
July 31, 2003


302 CERTIFICATION - CFO