Not really hanging, but if you like interesting pretzels, try Squabisch on Solano Ave in Berkeley. They also sell them at Trumer Brewery if you prefer your pretzels with beer in a taproom setting.
Has it to be a hanging pretzel (I have to admit that being from Germany, I hadn’t heard about hanging pretzels before) ? - if you are OK with “just” the pretzel than I would recommend Hahdough (go to the Konditorei on Fell Street, not the small shop/window on Laguna which only has a very limited selection) which is the place to go for any kind of German cakes/cookies/franzbroetchen etc. Easily beats many konditoreis in Germany)
80 percent sure Das Bierhaus in MV has them. The large number of tables outside are a good draw. The food I think is B+. They have a new location in DT RWC (a bustling spot), but I don’t know if they have the hangers there. It’ll be a good location on a warm day.
I am certain I’ve had pretzels with hangers somewhere even more recently, but struggling to place them.
I think my favorite german pretzels and beer (peninsula south) have been Stein’s. Made fresh that day and risen, run out at some point. They switched from the classic pretzel to more of a small shape, which I think isn’t as good. Notable other german food / beer combos include Ludwigs (MV), Gourmet Haus Staudt (RWC), Wursthall (San Mateo). Overall, I think you can’t beat Staudt for a combination of german food and beer on the peninsula.
Esther’s on the Los Altos / Moutain View border (near Dittmer’s) has solid baked german stuff. Fred’s (MV) has a selection of german beer (owned by a german) but no food.
If we go slightly outside german, you’d get to Fieldwork (Pretzels and Pizza, not much more, I’m thinking San Mateo but I bet the other locations are similar), Refuge (SC).
Slightly more common these days is becoming the Empenada and beer combo, such as Out of the Barrel, or Bare Bottle.
On a very slightly related tangent, the new Monk’s Kettle in Rockridge served me a very haunting Okonomiaki Tots a few weeks ago. It was a chef special on a monday night, and they’re open late (late night menu from 10p to 12 mid). Hmmmm.
They retired and sold their restaurant to former employees. Unfortunately, the food quality took a deep dive and is horrible now. In addition, they don’t bake anything anymore but get it delivered or have it completely stopped, e.g. breads
The beer selection at Staudt is great and the food decent but if you look for much better German food try Bistro Mitte in San Carlos (their beer selection is just decent)
Try the Kartoffelpuffer (potato pancakes), beef liver, kaesespaetzle, Koenigsberger kloepse (meatballs), cucumber salad (with dill and yoghurt), beef rouladen or pork shank - perhaps with the exception of Suppenkueche the closest you will get to these dishes compared to the fatherland