Friend Points (or FP) are points that you can trade for experience. To gain FP you need to defeat enemies while in a team together with one or more friends. For every monster you kill you will earn an amount of FP.
FP can be traded at several NPC's (Alvin, Jeremy, Pablo, Fungarf) for EXP. Each friend points earns you one experience point. At the top of your friend list is a bar that shows you the amount of FP that you currently have.
Alvin can be found in the Archers Range near the left teleporter. he is the Reclusive Old Man.