Thanks everybody.Quite a range of perspectives in this thread.
Could be the bike shop screwed up, could be the hanger was damaged some other way, could be bad shifting and stuck chain on the hills we were riding caused the damage. All I can say for certain is my buddy did not wreck in any way that could have damaged the hanger between the time the shop worked on the bike and our ride. But it was an intense ride with one major climb ride and several other hills in the first 25 miles so poor shifting could be at play.
It certainly will be interesting to see how the shop responds. Its a small and growing chain in an area with a number of other shops. My buddy had taken the bike to the location near his work rather than the the one in our neighborhood. He is now dealing with the neighborhood one, which is dealing with the other location on his behalf. The shop is not a Trek dealer, so a any kind of discount on a replacement Trek frame is probably not an option. But I would be surprised if the shop goes with the “user error” option and offers nothing by way of compensation given that its a crowded marketplace around here and mechanic error is at least a possible contributor to the problem.