The aim of this paper was to research the impact of the pandemic on the food and beverage services sector in the County of Istria. The analysis was performed using the Altman Z- score model in order to analyze and test the negative effects the COVID-19 pandemic has had on the companies within the mentioned sector. The result will also indicate the number of companies with a potentially high risk of bankruptcy in the next few years. The research was conducted on a sample of 60 micro and small companies in the period from 2018 - 2020. Descriptive statistics methods were used in the analysis while the hypothesis was tested using the Student t-test. The results of the research indicate a significant deterioration of the c companies business operations due to the impact of the pandemic in 2020. A significant statistical deviation was determined in the analysis, precisely a significant decrease in the values of the indicators in 2020 compared to the previous two years. The research also indicates that there are companies resistant to the negative effects of the pandemic and that resistance can be attributed to a continuously responsible performance of business operations. The results of the research can also be used with certain reliability to predict bankruptcy in the next two years and indicate that more than half of the companies were classified in a high-risk zone of bankruptcy. Finally, the supporting measures introduced by the Government were the key to maintaining the continuity of business operations of the sector helping the reduction of negative effects of the pandemic and the imposed restrictions.