I created a logo for my friend’s company for free, what can they do with it?

If you were working for them when you made the logo for them, they would own it: companies own the intellectual property of employees created in the course of employment. (Or if you were not an employee, but were an independent contractor for them, they would likely own it as a "work for hire.")

If you "gifted" them the logo, they would also own it--once something is gifted (given to) another, the other owns that thing, including intellectual property.

If you were neither working for them nor gifted it to them, then, though, it may be the case that they have no right to use it without your permission. Copyright inures, or comes into being, in the act of creation; and copyright includes the right to make derivative (or modified, like color-modified) versions of the work. If  you created a logo not in the course  of employment, you would own the copyright in it; if  you did not give it to another, you would still own it; and if you own it, others may not use it, adapt it, or modify it without your permission.

If the last situation above is the one that applied, you may have the right to stop them from using the logo, which right you could use to attempt to negotiate payment. In this case, you should consult with an attorney with intellecutal property experience to evaluate your situation and rights in greater detail.