Gus Fring, is one of the most iconic villains in TV history,
with his monster methamphetamine empire
run under the front of Los Pollos Hermanos,
a local favorite.
In Breaking Bad, Jessie would reveal that
Gus could be pulling upwards of $96 million in revenue
over a three-month period.
But this was after decades of growth
and only lasted a few months.
So, how much money did Gus Fring,
make over his entire career?
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Well, starting off,
let's take a look at his legal business,
Los Pollos Hermanos.
Similar businesses generally pull in a few million dollars in revenue
per store per year.
For example, KFC has hovered in the 900's
for much of the past 15 years.
Chick-fil-A on the other hand,
rakes in over $4 million per store annually.
One of the main reasons that KFC has significantly lower revenue numbers is that,
KFC, like many other fast-food chains, has overextended,
leading to more restaurants with lower revenue per restaurant.
Given that, Los Pollos Hermanos is an up-and-coming brand
that has been quickly expanding up to 14 stores,
It's safe to assume that they're generating 1-2 million dollars in revenue annually,
per store.
Let's just say $1 million each, to be conservative,
which would mean $14 million in revenue from Los Pollos Hermanos.
Gus has been in business for about 20 years.
And, let's assume that the majority of the profits made in the first 15 years
were reinvested into business
adding locations, trucks, marketing, and so on and so forth.
As a result, we will say that Los Pollos Hermanos
has been a stable regional chain
for about five years.
The average restaurant profit margin is 3 to 5%.
So, assuming a 4% profit margin,
Los Pollos Hermanos
would have generated $560,000 in profits per year,
or $2.8 million over five years.
And, we can use this figure to estimate
the total valuation of the business including all of its assets.
During this time period,
the average P/E ratio for restaurant chains
was about ten to fifteen.
This is based on the P/E ratio
of Yum Brands during the time period,
who owns a variety of restaurants, including KFC, Taco Bell, and PizzaHut.
The P/E ratio, or Price to Earnings ratio
is just a ratio between a company's yearly earnings, and its valuation.
As Los Pollos Hermanos makes
$560,000 in profits per year,
with the p/e ratio of 12.5,
Los Pollos Hermanos could be worth $7 million.
But this is not all Gus's.
It is clear that Madrigal
has some sort of significant ownership in Los Pollos Hermanos.
Some people suggest that it is the parent company,
while others insist that Gus is still majority owner.
So, we'll just say that
Gus and Madrigal are 50/50 owners.
Given all of this, over Gus's career,
Los Pollos Hermanos has given him
$3.5 million in net worth,
and about $1.4 million in income,
or about $5 million in total.
Moving on, let's take a look at his drug empire,
most of which, was with the cartel.
Badger tells Jesse, that street grade meth
has a market price of about $1700 per ounce
or about $27,200 per pound.
When Walter was cooking for Gus,
we know that Gus was moving 200 pounds per week.
But this was after Gus took over Hector Salamanca's territory.
So, originally, when he was working under Juan Bolsa,
let's say that he was handling, on average, 100 pounds per week.
First of all, out of his revenue, Gus would have to pay the cartel,
who handles the production of the substance.
Let's say, their cut is 30%.
Next, we have the Mules
working across Gus's distribution network,
getting the products to the dealers.
Mike reveals that their pay is 20%.
Let's also say, that the dealers cut is 20%.
Finally, let's say Mike and Gus's other right hand men, get 10%.
This sounds low.
But you have to remember that 10%
is split among just a handful of people,
as opposed to the 20 or 30%,
which is split between hundreds of people.
This finally leaves Gus, with 20% of the revenue.
This makes sense, as it would assume the cartel makes the largest portion,
followed up by Gus, who is taking on the risk of a distribution network.
So, with 100 pounds per week,
Gus would have been making $544,000 per week
or about $2.2 million per month
and $28 million per year.
With 20 years in the business,
this would add up to $565 million.
We knew that Gus lived well below his means
driving old Volvo, and owning a modest house.
We can assume, that his living expenses were well under his Los Pollos Hermanos income.
So, all of this drug money
was just pure net worth.
Let's just take off another $65 million
or about 11% as unexpected issues.
Maybe they had production issues, or they had to scale back for a little bit.
Anyways, before Walter, and the lab,
Gus had made at least $500 million from the drug trade.
The math is pretty much the same after Walt enters,
with just a few differences.
Gus no longer has to pay the cartel 30%
as he has his own production means.
He now also controls Hector's territory
leading to 200 pounds per week,
and the meth itself now sells for
$2,500 per ounce.
Instead of the cartel,
Gus has to pay Lydia and Chao, 20%, for the chemicals,
and Walter and Jesse $1 million per month.
The amount he pays Walter and Jesse,
works out to about 3.9%, even with the upgrade
of $15 million a year.
Let's just call them 5%.
And then, of course, there is the cost of the lab,
which is estimated to be $8 million
but, let's just call it ten.
However, that's just a one-time cost.
So, overall, Gus's profit margin increases to about 25%.
So, Gus isn't really making all that much more
in terms of percent,
compared to when he was working with the cartel.
But the key difference, is that he now has full control
and has a higher market price.
Given that this setup continues for about six months,
Gus would roughly make $52 million
over that time period.
So, at the time of Gus's death,
he was making about $100 million per year
But as he dies,
he only gets to about $50 million
minus the $10 million lab cost.
This means that Gus conservatively made
a total of $540 million from his empire.
Combined with Los Pollos Hermanos,
Gus was worth about $545 million at the time of his death.
But, that's just conservative.
Gus may have been peddling 200 pounds the entire time,
and his restaurant chain
may very well be worth double what we originally estimated.
So, Gus could be worth up to $1.05 billion.
The real number however,
was probably right in the middle
at $795 million.
Or, about $800 million
plus or minus $100 million.
So, unfortunately, Gus, likely never reached
a billion dollar mark, in terms of net worth.
But, his drug business would have been worth
1 to 2 billion dollars
given his yearly income.
However, you can't really sell this business
to Apple or Google, given, the nature of their business.
So, that figure is basically meaningless,
and wouldn't add on to his net worth.
But, hey, Gus did run a unicorn meth Empire.
However, as Jesse said, "Is a meth Empire really something to be that proud of".
And, given that Gus lived so modestly,
maybe he should have just stuck to Los Pollos Hermanos
as he would have lived a much longer life
and wouldn't have worked so hard,
just to end up giving it all, to Uncle Sam.
Anyways. If you guys thought this video provided
in-depth analysis of Gus's income and net worth,
then make sure to drop a like.
And, consider subscribing to see more questions logically answered.
But until then, I'm Hari,
and I'll see you guys on the next one.