Gentle desensitization with increasing exposure is the only way to truely handle allergies.You can use meds, but, personally I dont like allergy meds.
I am highly allergic to cats, but I have 6 indoor, well 11 now with the mama and her kittens.
My allergist told me dont get rid of them just cause I am allergic to them, cause they give me so much pleasure and love that I would be lost without them. But he did warn that if I ever got away from them for a few months, my body would have to re-desensitize.
Allergies are a tough thing. All I can suggest in your case in particular is cleaning your place thoroughly before your friend visits and bathing your pooch very thoroughly.
Dog allergies are rare, your friend should be tested for possible unknown allergens.
t~~~