"Friendly-looking" is correct (if a bit archaic), as "friendly" is an adjective, not an adverb. Most "-ly" descriptors are adverbs, and it is indeed incorrect

"Friendly-looking" is correct (if a bit archaic), as "friendly" is an adjective, not an adverb. Most "-ly" descriptors are adverbs, and it is indeed incorrect to compound "-ly" adverb-adjective combinations with a hyphen. (For example, "finely-chopped garlic" is incorrect). But adjectives that end in "-ly" can be hyphenated. ("Friendly," "elderly," "dastardly," "squirrelly," "burly," "lovely," "ghastly," "deadly," and so on). These days writers often choose not to hyphenate them, as compound-hyphenation in general is dying out in contemporary usage. It often feels old-fashioned and fussy in informal writing. But there is no rule prohibiting the compound-hyphenation of adjectives with "-ly" endings.