Step 1: Heat the Oven and Prepare the Dish - Preheat your oven to 350°F. Grease a 9 by 13 inch baking dish with butter or nonstick cooking spray, making sure to coat the bottom and corners. This casserole has plenty of cheese, so a well greased dish makes serving and cleanup much easier. I usually set the prepared dish beside my cutting board before I start mixing so everything is ready when the potatoes are sliced.
Step 2: Whisk the Creamy French Onion Sauce - Add the condensed French onion soup, onion soup mix, heavy cream, sour cream, Worcestershire sauce, garlic powder, and black pepper to a large mixing bowl. Whisk until the sour cream is fully incorporated and the mixture looks smooth and evenly colored. Take a moment to scrape around the bottom of the bowl because dry onion mix likes to hide down there. You want those seasonings distributed throughout the sauce so every layer of potatoes gets the same savory flavor.
Step 3: Stir in the Cheese Blend - Add the Gruyère, Swiss, 1½ cups of the sharp cheddar, and all of the Parmesan to the sauce. Stir until the shredded cheese is evenly coated. The mixture will be thick, and that is exactly what you want. As it heats, the potatoes release a little moisture and the cheeses melt, loosening the sauce enough to settle between the slices without turning watery.
Step 4: Slice the Potatoes Evenly - Peel the Yukon Gold potatoes and slice them about ⅛ inch thick. A mandoline makes this quick, but a sharp knife works well when you take your time. Even slices matter more than absolute perfection because potatoes of similar thickness will finish cooking together. If some slices are very thick and others are paper thin, you may end up with a few firm pieces mixed into otherwise tender layers.
Step 5: Build the First Potato Layer - Arrange one third of the sliced potatoes across the bottom of the prepared baking dish. Slightly overlap the slices so there are no large empty spaces, but do not press them into a tight brick. Spoon one third of the cheese sauce over the potatoes and gently spread it toward the corners. It does not have to look flawless. The sauce will melt and move as the casserole bakes.
Step 6: Repeat the Creamy Layers - Add another third of the potatoes, followed by another third of the sauce. Repeat once more with the remaining potatoes and sauce, ending with the creamy cheese mixture across the top. Try to cover the upper potato slices as completely as you can. Any exposed edges may brown faster, while the covered slices stay moist and tender.
Step 7: Cover and Bake Until Nearly Tender - Cover the baking dish tightly with foil and bake for 70 minutes. The tight cover is important because it traps steam, and that steam helps cook the potato slices all the way through. When the time is up, carefully pull back one corner of the foil and test a potato near the center with a fork or thin knife. It should be nearly tender but may still offer a little resistance.
Step 8: Add the Cheddar Topping - Remove the foil and sprinkle the remaining ½ cup of sharp cheddar evenly over the casserole. Return the dish to the oven without the foil and bake for another 10 to 15 minutes. During this time, the top will begin bubbling and the sauce around the edges will thicken. Check the potatoes again before moving to the final topping. They should now be completely tender.
Step 9: Finish with Crispy Fried Onions - Scatter the crispy fried onions over the melted cheddar and bake for about 5 more minutes. Keep an eye on them because they are already cooked and only need enough oven time to warm and deepen in color. When the top is golden, the cheese is bubbling, and a knife slides easily through the center potatoes, the casserole is ready.
Step 10: Rest Before Serving - Remove the casserole from the oven and let it rest for 15 minutes. I know that is difficult when everyone is already asking when dinner will be ready, but the resting time gives the sauce a chance to settle and thicken around the potatoes. Sprinkle chopped parsley over the top, then serve warm with a wide spoon or flexible spatula that can reach through all those creamy layers.