It's a big risk working for a friend. By that, I mean working in a position where your friend would be the one who has to let you go/fire you if something went bad. Working with friends can be great though you still have to be careful.

Since you have other options, I would pass on working for your friend. If he asks why you went to work for someone else, tell him the truth - that you didn't want to risk the friendship.

There is an exception to this rule: If your friend is in real need and you're willing to sacrifice to help him out, that's different.