This paper introduces a robust approach, integrating a Virtual Inertia Controller (VIC) with a modified demand response controller for an islanded Multi-Microgrid (MMG) system, accommodating high levels of Renewable Energy Sources (RESs). In these MGs, the low inertia in the system has an undesirable impact on the stability of MG frequency. As a result, it leads to a weakening of the MGs overall performance. A novel fractional derivative virtual inertia is integrated into the VIC loop to address this issue. This enhancement aims to fortify the MG’s stability and robust performance, particularly when facing contingencies. Furthermore, a modified demand response controller has been incorporated into the proposed inertia control technique to mitigate the frequency fluctuations and reduce stress on the energy storage system (ESS). Fractional Order Proportional Integral Derivative (FOPID) controllers have been employed to regulate the active power output of the biodiesel generators and the Geothermal station in the MG. The hybrid sparrow search and mountain gazelle optimizer algorithm (SSAMGO) optimizes the parameters for the three-loop controller. Time-domain simulations assess the effectiveness of proposed controllers in enhancing system frequency stability. SSAMGO’s performance was comprehensively evaluated, comparing it to various optimization algorithms in diverse scenarios. The results obtained from the MMG system demonstrate that utilizing the proposed controller technique, optimized with hybrid SSAMGO parameters, yields notable improvements in settling time by 24.68%, 46.20%, 7.52%, and 61.01%, steady-state error values by 72.56%, 98.18%, 98.73%, and 6.67%, undershoot by 105.76%, 144.23%, 19.23%, and 7.69% compared to other state-of-the-art algorithms presented in the literature. Finally, the proposed control technique’s effectiveness and robustness are assessed in comparison to conventional inertia control across various system scenarios. These scenarios encompass random load demand fluctuations, real-time changes in RES, and a wide spectrum of system operations, including situations with reduced damping and inertia and high levels of load variation.