The good news is that you automatically own the rights to your designs under U.S. copyright law.
The only exceptions are a) you’re working as an actual employee (not a freelancer) for someone in which case that person or company usually owns the rights or b) you have a contract specifically stating that you’re transferring the rights. Otherwise he only has the implied right to use or print the work as is.
The bad news is that you now have to decide if it is worth damaging your friendship over.
Good luck!
I’m into photography. Even if hired for a shoot I own the copyright for the product under copyright law. Ethical printers will not print without a release. Watermarks, visible or otherwise, protect my product.