The COVID-19 outbreak has significantly affected the business activities of the national, regional, and global economies. In the Philippines, the government had to impose an Enhanced Community Quarantine (ECQ) to contain the spread of the virus. This domestic response caused immediate business closure and limitation of business operations, especially among Micro-, Small and Medium-sized Enterprises (MSMEs). The food service sector was among the severely impacted business sectors and was considered to face a high risk of closures and job disruptions. The aim of the study was to develop a business strategy that would potentially mitigate the challenges faced by the MSMEs of the foodservice sector. One hundred and sixty-four respondents answered the online questionnaire consisting of 35 questions regarding the factors that influence the recovery of the food service MSMEs amid the COVID-19 pandemic. The obtained results from the Structural Equation Modelling (SEM) identified that working capital, customer footfall, and cash reserves have a direct impact on business continuity. In addition, the developed business strategy and policy recommendations would enhance the resilience and business sustainability of the food service MSMEs.