By Laura Sanicola

PHILADELPHIA (CNN) — The latest entry into the fast food value wars is a real hot potato.

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Starting on January 25, Taco Bell will begin selling $1 nacho fries in a limited release.

The fries will feature “bold Mexican seasoning” and include a side of nacho cheese dipping sauce, according to the company.

Taco Bell been beefing up its dollar menu as it competes with other fast food chains for penny pinching customers.

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Last month it added the $1 “Stacker,” a quesadilla-like egg sandwich, to its Dollar All Day menu, and says it plans to add 20 new $1 items this year.

Chains such as Taco Bell and Jack in the Box have been in a dollar menu war of sorts to compete with the behemoth — McDonald’s — which has been aggressively lowering its prices.

Some experts say restaurants don’t make much money from heavily discounting fast food prices in the face of food inflation.

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But the restaurants can profit if the discounts lure customers to higher-priced items, or bundles of low cost items offered at restaurants like Burger King,
Wendy’s and KFC.

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For Taco Bell — which offers $5 combo boxes that include mix-and-match menu items and a drink — food bundles have been a win.

The company said it sold $1 billion worth of its bundles in 2017.

The Tex-Mex fast food chain, owned by Yum Brands, has been eying fried potatoes as a way to innovate its menu.

It announced a new $2 “California Loaded Fries Burrito” last month and was teasing French fry offerings throughout last year.

CNNMoney’s Aaron Smith contributed reporting.

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