It is always best to make your point of view known to him rather than lead him on. Tell him honestly that you just don't feel the same way about him. How offended he gets is ultimately up to him but it will be best for both of you in the long run.
Never friendzone a guy who you know likes you. Tell him straight, it is kinder and like ripping off a band-aid. Make guy friends with those that don't like you that way because you are tugging their heart along if you are friendzoning them. Girls think it is the nicer thing to do because we are worried about hurting feelings, but we are really doing is dragging them along with little pin pricks to the heart.
A friend zone will always hurt his feelings no matter what so you might as well tell him you don't like him at all because he will probably not want to talk to someone he sees no chance of hanging out with anymore