Good Morning, Taco Bell

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Is that the Taco Bell Chihuahua about to greet early diners with a buenos dias and a morning paper? The Yum! Brands (NYSE: YUM) subsidiary and the country's largest Mexican fast-food chain is testing a breakfast menu at a few California locations and hopes to roll it out through the rest of the country next year.

Taco Bell for breakfast? It's not all that far-fetched of a concept. McDonald's (NYSE: MCD) and Sonic (Nasdaq: SONC) are already serving up breakfast burritos, so why shouldn't the company that rolls more burritos than anyone else miss out on the scrambled-egg party?

That party is getting pretty crowded, now that Wendy's (NYSE: WEN) will be going national with its breakfast offerings in a few months and Starbucks (Nasdaq: SBUX) has been ordering up TurboChef (Nasdaq: OVEN) ovens to test out some baked breakfast eats.

As a consumer, you may appreciate the wider slate of alternatives as you gear up for your morning commute and need sustenance to go, but what will become of the established players? Breakfast is a major driver at fast-food giants McDonald's and Burger King (NYSE: BKC). The growth at Wendy's, Starbucks, and Taco Bell is going to have to come at their expense unless the breakfast market expands, and that seems unlikely. With so many locations, all it may take is just one hit morning sensation at any of the breakfast newcomers to really make a dent in the two burger giants.

Investors don't necessarily need to worry at the moment. Burger King is making some serious strides in its turnaround strategy, and shares of Mickey D's are trading at a seven-year high. They will respond when the time is right. However, watch the comps as rivals expand their operations. Weakness there may ultimately derail one or the other from its happy tracks.

For more related Foolishness, check out:

• McDonald's Appetizing Quarter
• Sonic Stays Fresh
• It's Good to Be the King

Starbucks is a Motley Fool Stock Advisor recommendation. Take a gulp of Tom and David Gardner's market-beating newsletter service free for 30 days.

Longtime Fool contributor Rick Munarriz tends to go for the breakfast burrito at McDonald's over the other menu items, so he will be curious about what Taco Bell has to offer. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. T he Fool has a disclosure policy.