Wendy's announced plans Wednesday to sell 640 of its company-owned restaurants in the United States and Canada.

The sales are a part of the burger chain's plan to reduce the number of company-owned locations.

The company hopes to sell the restaurants to franchisees. Wendy's stock rose 7% on the news.

It intends to sell 380 restaurants this year and another 260 in 2016. The company is working with a private equity group to manage the sale, which will be directed at existing Wendy's franchise owners.

At the end of 2014, Wendy's had a total of 6,515 restaurants worldwide.

Related: McDonald's CEO promises better food

CEO Emil Brolick said the goal is to "drive further growth opportunities for expanded restaurant ownership to strong operators." He expects the deal to generate up to $475 million in cash.

Wendy's (WENDY) is also selling its bakery in Zanesville, Ohio, where it makes buns.

Related: Upstart burger chains are eating McDonald's lunch

The news came as Wendy's reported first-quarter financial results that topped Wall Street's expectations.

The company said sales rose 3.2% at both franchise and company owned stores. However, earnings fell 40% to $27.5 million, though it beat analysts' estimates.