This video explains in easy step-by-step instructions how to perform a factory reset on a JBL XTREME 2 (also XTREME 1) wireless Bluetooth speaker.
When the speaker is turned on, simply press and hold the VOL+ and the PLAY/PAUSE buttons simultaneously until the unit powers itself down.
After hearing the power down jingle, just turn on the speaker again as normal.
You can tell that the factory reset was performed successfully when the speaker immediately turns on the Bluetooth pairing mode. Check out the video to hear the sound jingle that indicates this mode.