Preheat oven to 350 degrees.

Slice potatoes with a sharp knife - making a thin slice, but do not cut the potato all the way through - leave them connected at the bottom of the potato.

Crisp bacon in an ovenproof pan. Set aside.

In a medium-size saucepan, melt butter over medium heat. Add the shallots to the pan and cook 3-4 minutes until softened.

Mix the flour and salt and stir into pan with a whisk for one minute.

Whisk in milk.

Cook until flour and milk mixture has thickened.

Stir in 1 cup of cheese, and continue stirring until melted, about 30 to 60 seconds.

Place the sliced potatoes in the pan and spoon the cheese sauce over the potatoes.

Top with 1/2 cup of shredded cheddar cheese and bacon.

Cover with foil.

Bake 45 minutes to an hour, until cheese is bubbling, and potatoes are soft.

Remove foil, and bake additional 20-30 minutes, until cheese has browned slightly and potatoes crisp.

Serve and enjoy!