The Folium documentation is incomplete at this time: https://folium.readthedocs.io/en/latest/
According to the index of the incomplete docs Legends and Layers are, or will be supported. I've spent some time looking for examples on the web but have found nothing so far. If anyone has any idea how to create these things, or can point me to a document or tutorial I would be most grateful.
Folium now has a way to add an image easily with version 0.15.
from folium.plugins import FloatImage
image_file = 'image.PNG'
FloatImage(image_file, bottom=0, left=86).add_to(mymap)