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McDonald's golden arches have been tarnished by more than a tainted food scandal in China as the malaise has spread throughout the organization. Source: Flickr via Mike Mozart.

It's not so much McDonald's (NYSE:MCD) reporting dreary earnings yet again that sends chills down the spines of investors, rather it's that the disappointment was so broad across all of its divisions and geographies. The burger joint isn't just in a funk; it's on the cusp of becoming a damaged brand spiraling out of control.

The fallout from the tainted food scandal continues to take its toll, causing comparable-store sales in the region to plunge 10%, leading to 56% of its operating income evaporating.

As bad as that is, Europe, which, until last quarter had been a reliable performer, has now joined in on the decline, dropping comps 1.4% from the year-ago period, which comes on top of a 1% decline in the second quarter. Operating income on the continent was also down 2%.

And, of course, the U.S. remains in deep trouble, with comps in its biggest demographic market tumbling 3.3%, more than double the decline of last quarter, and marking the fourth straight period in which same-store sales fell.

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Coffee doesn't seem to be enough anymore to get customers coming in the door. Source: Flickr via Mike Mozart.

It's been something of a tenet of faith that the burger joint has owned the breakfast daypart in no smart part because of its McCafe line of coffee. Technomic previously asserted nearly one in every three customers went to McDonald's for breakfast, which accounted for 20% of its total revenues.

But competitors like Taco Bell, White Castle, and even Starbucks saw the daypart as a particularly lucrative opportunity to steal share, and for all intents and purposes, it appears their strategies are working.

When Taco Bell owner Yum! Brands (NYSE:YUM) reported its earnings at the beginning of the month, it offered a hint of what investors could expect at McDonald's. While it's also been suffering from the tainted food scandal (comps at its China division plummeted 14%), it also noted the Mexican cantina was witnessing some surprising results.

Same-restaurant sales were up a somewhat lackluster 3% in the quarter, but that was being driven by a 6% increase in breakfast sales following the launch of a new breakfast menu. It suggests Taco Bell was slipping a bit in the lunch and dinner dayparts, but eating up large swaths of turf in the mornings.

Taco Bell's morning takeover coming as as McDonald's was giving away its coffee to lure customers in and blunt the damage caused by the competition makes it even clearer: The burger joint is hurting. And all of which ignores the regular rivalry served up by Wendy's (NASDAQ:WEN) and Burger King Worldwide (NYSE:BKW), both of whom has been pushing their own menu innovations.

The fact is, McDonald's is swimming against the tide -- and is about to be swept out to sea.

Fast-casual dining juggernaut Chipotle Mexican Grille (NYSE:CMG) continues to, well, eat the burger joint's lunch, posting comps that blow everything else out of the water. They surged 20% in the third quarter, leading to a 57% jump in net profits.

In short, McDonald's image has been tarnished overseas, while here at home, it finds itself up against the changing tastes of consumers and reinvigorated rivals looking to steal market share.

McDonald's stock held up pretty good over the past year against a backdrop of toughening conditions, but the complete breakdown across all markets tears the mask off the underlying problems affecting the burger slinger -- and it's a scary sight to behold, one that may send investors running from the room screaming.

Follow Rich Duprey's coverage of all the restaurant industry's most important news and developments. He has no position in any stocks mentioned. The Motley Fool recommends Chipotle Mexican Grill, McDonald's, and Starbucks. The Motley Fool owns shares of Chipotle Mexican Grill and Starbucks. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.