Restoring to factory defaults causes you to lose all custom settings you entered when you first turned on your unit. You'll have to start from scrarch.
The loss of favourites is NOT due to that but because the mapsettings.cfg file in the map folder (that's where all your favourites, recent settings, home location) is stored got overwritten with the new map upgrade.
Copy the file from a backup up (hopefully) previous map folder to the new map folder using Explorer. Then connect to Home-->Mange Favourites--> and make a change to one of them...add one, delete one, edit one, doesn't matter. Disconnect the unit PROPERLY from Home and restart. you should be ok now.
Because of the lloss of favourites with new map upgrades, many choose to make a custom ov2 file of favourites instead.
See this
link for a 'how to'