how do I reset an Apple watch given to me by a friend who forgot his apple id

You can't reset it,your friend has to follow these steps in order to remove the activation lock;

What to do before you sell, give away or trade in your Apple Watch, or buy one from someone else – Apple Support

And if he can't remember his apple id that set the watch up then the watch is of no use to you.

About Activation Lock on your Apple Watch - Apple Support