Can't restore iPhone 4S running iOS 7.0.3 via iTunes?

In the summary screen for my iPhone in iTunes, there is no option given to restore the iPhone to its factory settings.  Also, under "back ups," I am able to back up the information on my phone to my computer, but the "restore back up" option is grayed out.  I was told by AT&T yesterday when I paid out of my cell contract with them that I needed to back up my phone and then restore it to jailbreak the phone so that I could go with a different provider.  Does anyone have advice for me on this?  Thank you!

Hello Sabina,
Try to restore your iPhone by taking it in Recovery Mode, but make sure you have turned off Find My iPhone before Restoring your iPhone to Factory settings.
To Turn of Find My iPhone, go to Settings> iCloud> Turn off Find My iPhone and if prompted for password enter your Apple Id Password.
Now follow the steps below to take your iPhone in Recovery Mode and then Restore it.
Make sure you have Latest Version of iTunes (11.1.3) Downloaded and Installed on your Computer, if not then you can download the latest version of iTunes from the Link below. http://www.apple.com/itunes/download/Now once you have the Updated version of iTunes installed on your computer follow the below steps to get your iPhone in Recovery Mode and Then restore it to factory settings Open iTunes Application on your computer and then start the process step by step
1>Disconnect your device from the computer (if connected). The process won’t work if you start with the iPhone connected to the computer. Leave the cable connected to the iPhone, as you will be reconnecting the iPhone to the Computer later in the process.
2>Power down your device. Turn off your device by holding down the Power button ( On Top right corner of iPhone). When the power slider appears, slide it to the right. Wait for your device to completely shut down before continuing.
3> Press and hold the Home button (Home Button is located at bottom of your iPhone screen/display). With the Home button held connect the device to your computer with the USB cable. When reconnected, your device should turn on. (If the low battery screen appears, charge your device for a few minutes and try the process again.)
4> Continue holding the Home button. After a few moments, you will see the "Connect to iTunes" screen on your device. This screen is a picture of an arrow pointing from a USB cable to the iTunes logo. When you see the screen you can release the Home button.
5> iTunes will display a message stating that a device in recovery mode has been connected. From there you can proceed to restore your iOS device. Once you see this message click on OK and then click on Restore Once you click on Restore iTunes will download the Latest available version of iPhone software (ipsw file) in your computer and after the download is completed the same will be restored in your iPhone . You will see the Download process and Restore process on top of your iTunes screen. Once the restore is completed your iPhone will automatically restart and you will see a message that iPhone has been Restored and will connect after restart. Now you will have to follow some steps on your iPhone to Customize your iPhone for First Use. Hope this process will help you

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