As you are running Factory Recovery, you should have made your REcovery Disk set in case it failed when run from the Recovery Partition on the HD.
There are a few things you can try. Failure at this stage of install can be a driver hanging during setup. Try using this method to enter the Device Manager during install to uninstall any drivers showing in error - in particular the Display driver is the usual culprit. This may let the install complete so you can update the driver from the desktop.
Device Manager - Access During Windows 7 Installation
If this fails, you'll need to order your Recovery Disk set from Acer Tech Support, or find a Win7 installer for your version to clean reinstall using the Product Key on the COA sticker: Reinstalling Windows 7