"Nearby friends" on facebook is an important feature as it will allow you to see your nearby friends until unless they have turned on this feature from their side.
To turn on this option you need to follow these steps.
1- Go to the menu bar which is on the right top corner of app.
2- There you can see an option of "Nearby Friends"
Click on it and you will see the next page where all details are mentioned about nearby friends. If you want to turn it on the click on the blue button which is at the bottom right. If you do not want to turn on then click on "Not Now".
Once you have turned it on you will start seeing nearby friends if and only if they have also turned this feature on.