In the old part of the town, which is the most atmospheric part of town to stay.
We booked ahead by phone. We were given a relatively small room away from the main courtyard, around a smaller courtyard which was nice as it was very quiet. The bathroom was very basic but good with both a western and iranian style toilet.
The restaurant is in the nice courtyard next to the big fountain; you can eat on regular chairs and tables or lie down on the iranian style beds around the fountain. A lovely place to spend a few hours lounging in the shade.
We had lunch here one day and the other day we had lunch in the Silk Road hotel, which wasn't as good.
The contact we had with the hotel receptionist and his brother was great! He reminded me of the energetic receptionist of the "Best Exotic Marigold Hotel"!!
Don't forget to visit the roof top for a great view over the old town.