Denise,

I still think you should go for it. I would work up a couple of different ideas as to what this could look like, associated budgets and present them to your friend. Two quick thoughts:

One way to minimize up front investment is "Go High End": Don't have 50 prints of the same photo in different sizes. Make things seem more exclusive. Pick 20 of your favorite prints. Print each only once or twice (or maybe once per size). But create a sense of exclusivity, that if they don't buy it it now it could be gone. Pick your most "artsie" prints, and pick printing styles with some flair. In other words, sell art, not pictures. BTW, art is expensive. I wouldn't be thinking "%" mark ups, I would be thinking 2-3x the cost mark ups.

The other thought would be to have a service associated with your booth. At least in New England, lots of mother/daughters, friends go to these fairs..it is often an "event". Have a mini studio set up where you could take a picture of their group and have the prints delivered. Capture their moment. If you are worried about charging for the service, set it up where you have a laptop there and they only be charged if they like the photo and order prints/jpg file.

Just some thoughts...but it sounds like a good opportunity to me.

Good luck,
Brant