For Windows Phone 7 devices factory reset is done automatically by Blancco Mobile Diagnostics and Erasure when the device is connected. After the factory reset the user is required to start the camera application.

For other Windows Phone devices factory reset has to be done manually by the user. Factory reset can be done from device settings or using a button combination.

Please refer to manufacturer documentation on resetting the device, for example:
http://www.windowsphone.com/en-us/how-to/wp8/settings-and-personalization/reset-my-phone