It won't allow you to reset the device if it is rooted. You would have to unroot it first. Then you would be able to do a reset.
I know of two apps that should be able to help with unrooting a device. Others may know of more or other ways, as I am really not a fan of rooting, so not my expertise.
The two apps, which should be able to be found at the Google Play Store are "SuperSU" and "ES File Explorer". I think "SuperSU" is free but I don't know about "ES File Explorer".
How to unroot Android: Using SuperSU
- Download, from the Google Play Store, and install "SuperSU".
- Launch the app and go to “Settings”.
- Scroll down and locate, and tap, “Full unroot”.
- It will ask you to confirm that you really want to unroot your device. To start, tap continue.
- When it is done, the app will automatically close and then restart your device.
- When it is done, and the device restarts, it should be fully unrooted.
- Uninstall "SuperSU" and you are done.
How to unroot Android: Using ES File Explorer
- Download, from the Google Play Store, and install "ES File Explorer".
- Launch the app and tap "Menu".
- Scroll to locate “Tools”. Tap that and then turn on “Root Explorer”.
- Now you will have to grant it "root privileges", if prompted.
- Go back to your home screen and then navigate to your device’s root folder. It should found as “/” in explorer.
- From root, navigate to “system” and then “bin”.
- Find, and delete, the “busybox” and “su”. If you can’t find them, move on to step eight.
- Navigate back to “/” and open the “app” folder.
- Delete superuser.apk.
- Restart your Android device. Your device should reboot unrooted.