Whisk together eggs, milk, honey, vanilla, and orange zest until smooth. Make sure no lumps remain. This custard is the key to the fluffy, flavorful inside.
Dip each thick slice of challah in the custard, letting it absorb for about 5 minutes. Flip halfway to coat both sides. Older bread soaks longer, giving a richer custard texture.
Heat butter and oil in a pan over medium heat. Fry soaked slices 2–3 minutes per side until golden brown and crisp at the edges. Avoid overcrowding for even cooking.
Immediately sprinkle the hot French toast with cinnamon sugar. This sticky coating gives it that churro-like crunch and flavor.
Beat cream cheese, powdered sugar, and milk until smooth. Drizzle generously over the warm French toast. Adjust milk for thickness as needed.