I like the idea of talking to your friend and about the place you are in. Just as we would have to report a case of child abuse if we knew about it, there is an element of this story that is almost the same since it isn't just about the situation being against the law it is about whether the situation is safe for all the children. Ideally the complaint would come from your friend but barring that a complaint from someone not in the situation would also help to save relationships for those involved as in no hard feelings. Just hoping it doesn't damage the relationship you have with your friend.

I may be wrong but I'll bet compared to other daycares in the area the price is extremely reasonable at this daycare. I could charge less per child too if I had more of them. Price so often dictates where a parent puts their child and not whether that is the best place for them.