It's an e-reader , WiFi 7" screen, factory reset and therein lies the problem. The setup wizard won't proceed beyond attempting to login to their servers which no longer support this older device. Accordingly, this Reddit post says you'll have to download the last update from a web archive site and side load via a USB connection to your computer.
https://www.reddit.com/r/kobo/s/MMpq3WUx5F
The archived update can be found on the Way back Machine website.
Kobo Arc 7 (Bog Gate TW10)
This offer has been gifted to someone and is no longer available.