
You have to decide whether you want to make your stand money and more, otherwise you could end up out of pocket, not only because you don't make the stand money, but also because you will have forked out for the ingredients and packaging for the baking products. I'm afraid, for me, I'd go for the event that I would be guaranteed to sell the most, if she's a good friend, she will understand that you can't just pay for the pleasure of being somewhere (actually, maybe you can??) - perhaps you can donate a few cakes for them to sell instead, to calm the waters.
Events and fairs I go to require PLI insurance for anyone selling food for human consumption, they're less stringent about arts and crafts, bric a brac type of stuff, but you may be asked if you're selling food.