Cook bacon in a large saucepan over medium heat until crispy.

Use a slotted spoon to transfer bacon to a paper towel lined plate.

Set aside.

Pour off all but 2 tablespoons drippings from saucepan.

Cook onion in drippings, stirring occasionally, until tender, 4 to 5 minutes.

Add flour and cayenne pepper; cook and stir 1 minute.

Stir in milk and broth.

Bring to a boil over high heat, stirring occasionally.

Reduce heat and simmer for 5 minutes, stirring occasionally.

Remove from heat and stir in 1 1/2 cups cheese until melted.

Ladle into bowls and top with reserved bacon and remaining cheese.