Is there a chip that can be worn onthe colar to find my dog

Never heard of such a device. Note that you need a LOT more than just a "chip". You need a device which can connect to a network connection (so either a wifi device or something that can subscribe to a 3G wireless carrier's service), and you need a power supply for the device. The device and remote app for tracking it must also both have access to the same service that provides the network location services (with iOS devices that is Apple through its iCloud servers).

Find my friends app ONLY works between appropriatly configured iOS devices. So you could buy an iPhone for the dog and put it on their collar? But, seriously, you would need something like that on the collar to get that sort of network location & tracking feature.

No, dogs cannot be tracked by an implanted chip. They can be identified by a chip, when someone with the scanner device has a hold of the dog and can pass the scanner right over the skin where the chip is. But the chip is just a passive RF device (it needs to be stimulated by a low power radio frequency field and it then sends a very, very weak signal back to the scanner - typically the scanner must be within at most a few centimeters of the chip to stimulate it and read back the return data).

But the chip has no power source and is wholly inert except when stimulated by a scanner in close proximity to it and transmitting at just the right excitation frequency.

This is the same technology used in automatic toll booth scanners in cars. The device is inert, but when stimulated by the proper excitation radio frequency, it blips out a brief identification code in a quick, very weak signal that is only detectable at very short ranges. The device then sits inert until another blip of stimulation energy hits it.

P.S. for collar type GPS tracking devices, google for "lovmypetsGPS" or "Pet GPS safety collars" - they do exist (although I do not know about iOS apps for the devices) but they are not cheap. Some are network dependent too - eg the lovemypets one uses Sprint's network, but they do not mention a phone app at all, just tracking via a computer web tool.