could it also be:" do they have another friend?"
No, because "Sie" is capitalised.
A little confused, why is it "Haben" and not "Hat"?
'Sie' is 'you' in a respectful way, and with 'Sie' the conjugation of haben is haben. Could have said 'Hast du' where du is more informal.
Got it, thank you.
why it is not "Do you have an another friend?"
In English, you can't say "an another".
have they got an other friend?
It can't be "they" because "Sie" is capitalised.