As long as the towel has a stitch able area that is large enough. I think it would be really cute on a towel. The below mentioned towel says the stitching areas is the standard 3" and the Friends kit says the finished design is 2.5" round. Would think it would fit on the towel.

https://www.everythingcrossstitch.com/kitchen-mates-hemmed-towel-15x25-mrp-p3375.aspx?k2=c198y3


ECS has more towel choices. Navigate to Products > Stitchable Items > Towels to see the others.