> What can my friend do in this situation?

Your friend can treat the owner's daughter as he would any other employee. If that includes some sort of discipline, then he must do the same.

If your friend is that worried about the situation with the owner+daughter, your friend could talk to the owner first, explain the situation, then explain what he plans to do and why.

If the owner indicates that such discipline can't happen, then your friend needs to either suck it up and do what the owner requires, or find another job then leave.