The franchise issue is dead and Government must move forward and tackle the problems facing the country, the Premier said last night.

On Friday the Prohibited Restaurant Bill was passed by a 23-16 vote as the "People's Five'' joined forces with the Progressive Labour Party to defeat Government.

But last night Dr. David Saul said the vote was a "foregone conclusion'' and that the whole issue of McDonald's and franchises was now dead.

"As far I am concerned that is behind us. The country as a whole is far more interested and concerned about drugs, crime, education and the economy,'' said the Premier.

It appears the vote could now lead towards a healing of the rifts within the UBP and it is believed the "Five'' are unlikely to face any disciplinary action, despite voting against Government.

In addition it is unlikely to stop former Premier Sir John Swan setting up shop at the airport -- but he will have to find an alternative to McDonald's.

Although the Bill passed on Friday, it cannot go before the Senate and officially become law until next June.

However Dr. Saul said effectively the Bill was now law and the rules of the House of Assembly meant Government could not produce any other legislation on the issue, although the Bill could face amendments in the future.

He also said the Bill did not nullify the report of the Franchise Committee which recently recommended that fast food franchises should be allowed, although heavily disguised.

"The report is there for the record. It is an exceedingly logical report and sometime in the future the Government could re-examine the issue,'' said Dr.

Saul.

"But it is a dead issue now. It is off the order paper and we as a Government are committed to concentrating our efforts on dealing with the issues that are the central concerns of the people of this country,'' added the Premier.

The Bill is aimed at "restricting the operation in Bermuda of restaurants which are associated with overseas restaurants''.

It seeks to make it an offence for any person to operate such a restaurant, although provision is made to allow restaurants already open, like Kentucky Fried Chicken, to continue to operate in "substantially the same manner''.

Any franchise operation opened after May 10, this year, will effectively be illegal and the person behind the business will be liable to six months in prison, a $5,000 fine or both.

The Bill has caused a wide split within the Government ranks with the `People's Five' -- Anne Cartwright DeCouto, Trevor Moniz, C.V. (Jim) Woolridge, Dr. David Dyer and Dr. Clarence Terceira -- refusing the toe the party line.

Under recent changes in the UBP's constitution they could face disciplinary action for Friday's vote, although Dr. Saul said he believed that was unlikely.

Last night Mrs. Cartwright DeCouto said now there could also a be a healing of the UBP's internal wounds.

"Naturally I am happy with the result of the vote, it has been a long road and I am pleased it is over,'' said Mrs. Cartwright DeCouto.

"I was disappointed that at the end of the day other UBP MPs did not support the Bill. I had hoped they would.

"However, I certainly hope things will settle down now. I would hope that with this behind us we can get on with important matters facing the Country,'' said Mrs. Cartwright DeCouto.

Sir John, whose company Grape Bay Ltd has been recommended for the airport food and drinks concessions, has already warned of the Bill's far-reaching effects.

He has said in the past that any local restaurateur who opened an overseas branch would be forced to close the local operation.

The former Premier has also said it could affect liquor stores, hotels, airlines and cruise ships and existing restaurants with foreign links like Four Star Pizza.

Last night Sir John was staying tightlipped over the future of McDonald's and the airport concessions -- although it is thought he could still open up a shop, but not a franchise.

"I will have to sit down and take a look at our options and assess the situation,'' said Sir John.

Premier David Saul RESTAURANT EAT