While you could increase your rate, I feel it's fair as your friend company is billing his client for the entire period. For me it feel like your are employed by your friend company. 1.25x is really low then. If he just introduced you to the client then it's not his company who should bill the client but yours. In this case it's your client and your friend just get a commission, 25% seems then pretty high. I usually give 15%. But what I understand is that the business relationship is between the client and your friend, it's not your client.