Start by melting the butter with the olive oil in your large skillet over high heat. Add the finely chopped onion and cook for about 3 to 5 minutes, until it becomes soft and golden. Then, add the sliced mushrooms and continue to cook for another 2 to 3 minutes, stirring occasionally until they have released their moisture and started to brown.
Now, stir in the cubed chicken pieces and the minced garlic. Season them generously with salt and pepper. Cook everything together, stirring only once in a while, for about 5 minutes. You're looking for the chicken to turn white on the outside; it doesn't need to be fully cooked through at this stage, as it will finish cooking with the rice.
Add the uncooked rice and all of the seasonings from the blend (garlic powder, onion powder, thyme, paprika, and cayenne) to the skillet. Stir constantly for about 2 minutes. This step toasts the rice and spices, which deepens their flavor and adds another layer of complexity to the final dish.e
Reduce the heat to medium and sprinkle the flour over the contents of the skillet. Stir constantly for one minute to cook out the raw flour taste. Slowly whisk in half of the milk until the mixture is smooth, then add the rest of the milk, followed by the chicken broth, whisking continuously to prevent any lumps from forming.
Bring the mixture to a gentle simmer. Once it's bubbling lightly, cover the skillet with a lid, reduce the heat to medium-low, and let it cook for 10 to 12 minutes. After this time, remove the lid; the rice should be tender and most of the liquid absorbed. Quickly cover the skillet again and remove it from the heat to let it stand for 10 minutes. This resting period is critical for the rice to finish steaming and absorb the remaining liquid perfectly.
Uncover the skillet and stir in half of the shredded Cheddar cheese until it's melted and combined. If you want an extra creamy texture, this is when you would gradually stir in the optional heavy cream. Smooth the surface of the mixture, sprinkle the remaining cheese on top, cover the skillet for a minute or two until the cheese is beautifully melted, and then serve hot, garnished with fresh parsley and a dollop of sour cream.