About 50 Bermudians will lose their jobs when McDonald's closes on August 31, says the owner of the local franchise.

Mr. Gene Colley, president of the Colley Group in North Salem, New York, said he appealed to Government for permission to keep the restaurant on the US Naval Air Station open, but "we don't qualify.'' It was not the lack of a majority Bermudian investor, but the Island's prohibition against franchises that was cited, he said.

Mr. Colley, who has a condominium in Bermuda and owns dozens of McDonald's restaurants around the United States, said he would take a major loss on the franchise.

Having paid for the building, equipment, and landscaping, "it goes back to zero,'' he said.

Asked if he would be moving the equipment off the Island, Mr. Colley said he was still investigating that. "No one knows for sure,'' he said.

The restaurant, which has been open for ten years, employed about 50 people, nearly all of them Bermudians, he said.

Finance Minister the Hon.

David Saul said yesterday Mr. Colley's contract was with the American authorities and had "nothing to do with Bermuda at all.'' As to whether McDonald's could one day re-open, "we'll have to wait and see what applications are made.'' A 60 percent Bermudian-owned company was needed, and "then you're by definition no longer a franchise,'' he said.

A franchise agreement is one in which the franchisor -- in this case US-based McDonald's -- offers consultation, promotional assistance, financing, and/or other benefits in exchange for a percentage of sales or profits.

Dr. Saul said he had "an open mind'' about a McDonald's restaurant in Bermuda.

It was not clear yesterday whether McDonald's would allow a restaurant to operate in other than a franchise arrangement.

"Anyone who thinks that something is going to be popular in Bermuda is welcome,'' he said. "As long as it's legal, I would support it.'' In recent months, the McDonald's on the soon-to-close Base has been open to Bermudians on Mondays, Wednesdays, Saturdays, and Sundays.