The current RS Germany guide states that there is a dearth of family-owned hotels in Erfurt, but I would like to share an excellent one I found in the city last fall. Hotel Domizil is owned by a mother-son team and has around 10 rooms. The son has excellent English; the mother has good English. The hotel is located just off Domplatz, the city's main square, so the location cannot be beat (especially for events on the square like Oktoberfest [when I was there] or Erfurt's Christmas market). It's a 15-minute walk from the train station (or take the tram to Domplatz).
The hotel is decorated very attractively. I reserved a room with a view of the cathedral and was very pleased with it -- definitely worth the small additional charge for the view. The bed was extremely comfortable and the room was set up nicely. Breakfast is spectacular. As I recall, the son has training as a chef, and the presentation of the breakfast buffet (along with the taste of the food!) reflects that. The breakfast room is on the ground floor and has a huge window that allowed me to enjoy my coffee while watching the city come to life in the shadow of the city's impressive cathedral.
It's a great place to stay. Obviously, I highly recommend it.